Two trends will play a significant role in the Indian economic landscape. First is the rise of start-ups in the country. Start-ups are enterprises promoted by first time entrepreneurs and are relatively recent in origin. What differentiate a start-up from a small business is the strategy and the objective to scale up the business in an unconstrained manner.
A growing millennial population is the second trend that is bound to have a tremendous impact on how work is organized. Millennials are the largest cohort in history. These people born between 1980s and early 2000s are bound to bring changes in the existing job market.
A number of surveys conducted in the West, point towards the growing trend of millennials wanting to work with start-ups. However, how Indians respond to these new age organizations is yet to be seen. To gain insights about the perceptions millennials hold towards start-ups, a survey was conducted to identify the factors that attracted candidates towards a start-up and those that prevented people from taking up such employment.
Is there a methodology?
An exploratory study was done to gather insights about the perceptions of millennials regarding employment in start-ups. An attempt was made to uncover the factors that make new ventures an attractive place to work. At the same time, factors that discourage people to work in start-ups were also explored.
The study involved identifying all job related factors that one considers while evaluating the suitability of a particular job offer. This list of factors was derived from an extensive review of available literature as well as through collection of primary data. Primary data was gathered through semi-structured interviews with people belonging to Generation Y. Sixty respondents were chosen from various B-Schools. Their ages varied from 22 years to 28 years. They were asked about factors that they kept in mind while choosing an employer. A thematic analysis of the responses was done to derive those factors that seemed most important to people in this cohort.
Based on the analysis of the responses to interview and the literature review, a questionnaire was designed to assess the perceptions regarding work in a start-up. The questionnaire consisted of 16 items. Apart from the demographic information, each item consisted of a statement describing working in a start-up. The statements were framed both negatively and positively to avoid any biases in responding. Such statements regarding positive and negative factors were alternated. Each item describing perceptions about employment in start-ups had to be ranked on a five point Likert scale (where, 1=Strongly disagree; 3=Neutral & 5=Strongly agree).
Once the questionnaire was designed, a purposive sample was selected. All the respondents were Management students. 138 participants answered a questionnaire regarding employment in start-ups. The respondents belonged to three age groups; 18-21 years (25%), 22-25 years (54%) and 26-29 years (21%). 51% were males, while 49% were females. Forty nine percent of the people had prior work experience with 18% having previously worked with a start up.
To identify the factors that attract and those that discourage individuals from working in a start-up, weighted average was used. Here the rating on the five point scale given to each statement was multiplied by the corresponding frequency of that particular response given to the statement. This was divided by the total number of respondents.
Peep into the perceptions of millennials
Through the survey, it was possible to delineate the factors that are instrumental in attracting people to start-ups and those that dissuade individuals from taking employment in these organizations.
The factors that attract millennials to start-ups:
- Opportunity to get insights
An important factor cited by the respondents was the opportunity to develop in-depth knowledge about the business. Start-ups usually have a simple structure with multiple cross-functional teams. Everybody gets to work in multiple domains. Only when the organization reaches maturity, does the question of role specialisation arise. For most people who have just started their career, the chance to try their skills in all domains and then finally settle for one they are best suited is a great way to discover their expertise.
- Use of niche skills
At a time when niche skills are sought after, the working population looks for a chance to exhibit these skills and improve them further. Working in an environment that provides freedom to use technical expertise to scale up the business is indeed a powerful motivator to join a start-up. One has to constantly use and upgrade one's skill to remain relevant in the competitive business environment.
- Recognition for individual effort
One of the most important factors was found to motivate people to work with start-ups was the recognition for individual effort that one receives when working with a small organization. Typically, in such organizations jobs are designed in a manner that each individual's work contributes to the organizational outcomes in a significant manner. The successful completion of a task enhances one's feelings of self-efficacy. This also addresses the issue of task significance and task identity, increasing the motivating potential of a job.
- Autonomy in decision making
Many new age organizations do not impose the same boundaries on employees that traditional companies do. The rights and the power one possesses depend on the qualifications rather than a diffuse, difficult to comprehend criteria such as seniority. This paves way for autonomous decision-making. The absence of red tape not only provides an environment for efficient functioning of an organization, but also helps the individual learn to take independent decisions, build leadership skills by taking responsibility and develop expertise in an area. All these skills sets are much in demand in the corporate world and at the same time allow individuals to focus on their need for development.
- Reasons that discourage millennials to work with start-ups
Though the learning in a start-up is exponential, not everyone is looking for a challenging job. In India, where regular and secure employment is difficult to come by, the promise of a fat salary is good enough to attract top talent. In the survey, it was found that the single most important factor that stopped Generation Y from working with a start-up was the concern regarding the insufficiency of remuneration and benefits that one would be offered by a start-up.
- Concerns regarding compensation and benefits
Like all previous generations, millennials are concerned about the pay and benefits they would get from their job. Since most of the productive hours are spent in the workplace, it is only natural to desire a well paying job. An individual's sense of equity would discourage one to work in a start-up, if the pay level is not competitive. On comparing oneself with one's counterparts in larger organizations, one may find that those peers enjoy higher pay, greater level of job security and better quality of life by expending lesser effort at the work place. As one observes that tangible material benefits of working in a start-up are much lesser than those compared to working in a large organization, one becomes less likely to accept such a job.
- Lessons for start-ups
Any organization whether large or small, has to do its best to attract talent if it is to remain competitive in a dynamic environment. New firms find it hard to get the best talent due to multiple reasons. However, branding the organization in a manner that appeals to the work preferences of the Millennials can go a long way in building an excellent talent pool for the organization, which can finally be instrumental in scaling the business of the organization. Intrinsic motivation often acts as a magnate for talent. A job provides intrinsic motivation when an individual is applauded for his success, is able to develop his capabilities and is provided with meaningful tasks that are in line with one's agenda of self development. Including these elements in a job are indeed an economical way of maintaining a talented workforce.