/How startup founders are compensating employees for lack of job security

How startup founders are compensating employees for lack of job security

When Anuraj Poopathy set up DreamBig, a printing startup in 2015, the first thing he did after landing a customer was buy health insurance for his employees and their families. “They joined me on pure faith. I don’t want them to be burdened with worries about their children’s education or family’s health. The business pays for their children’s education too,“ he says. About 15% of the company’s profits are distributed among employees.

Signing up with a startup can be a leap of faith -the company could be the next unicorn or could go under before the year is out. The hours are long, and every resource is stretched to the limit, so some founders try to compensate in other ways -from helping find employees accommodation to paying fees for courses.

Giving employees a share in the profits, and helping them realise their dreams is one way for startups to retain staff as well as build a company culture. When Ranjith Sivalin gaiah joined Bengaluru-based Campus Sutra as an accountant, he was surprised that the founders offered him a share in the profits. His salary was Rs 15,000 a month, and even with his father’s pension, Sivalingaiah knew he couldn’t afford a house for his parents. Four years on, Sivalingaiah has not only built them a house, but also manages the company’s entire operations and earns more than Rs 60,000 a month.

Finding accommodation for employees, a benefit corporates usually offer new staff, can be difficult for early-stage startups.When the Goodbox team was setting up in Bengaluru and planning the roll-out of its app for small businesses in 2015, there were just 12 people on board. Co-founders Mohit Maheshwari and Anand Kalagi namani allowed some of the early employees to stay in their houses for a few months. “Finding separate houses would have been expensive since we were just starting. We hadn’t raised our first round of funding,“ says co-founder Abey Zachariah.They found paying guest accommodation for women employees near the office and paid for it.

Taking care of employees’ personal needs is an old practice in India, says R U Srinivas, founder of Chennai-based food business Idli Factory. “Traditional business houses built entire towns for their staff. They practically adopted the entire family and the employee stuck on for 20 to 30 years. The longevity and stability of an employee far outstrips the monetary cost involved,“ he explains, adding that he’s always provided housing for his employees. “They take turns to cook and take breaks.I’ve found they focus better on work when other things are taken care of,“ he says.

In some cases, the founders act as mentors. Vikas Mishra joined ride-hailing platform Grab in 2013 for a salary of Rs 4,000 a month after he failed class 12. The founders encouraged him to take the exam again, and after he passed, paid his fees for an undergraduate degree. “I was then keen to learn Tally, so they paid the fees. In 2014, they shifted me from the dispatch team to the accounts team and taught me basic computer skills,“ says Mishra. He now earns 10 times what he did when he joined Grab and is preparing for MBA entrance exams.

At food-tech startup DesiVDesi, in-store brand promoters are all women, many from underprivileged backgrounds.“We do goal-setting exercises for them and encourage and help them pursue higher education.They are first-generation learners,“ says Nidhi Pant, co-founder, DesiVDesi. The founders have developed interactive training sessions to build and refine their skill sets. “We train them in communication and time and stress management,“ she says.

Several founders have stepped up to provide loans and other help. Nidhi Agarwal, founder of online clothing company Kaaryah, says she began providing interest-free loans of Rs 1 lakh to Rs 1.5 lakh to staff after she realised employees were taking loans at 10% interest. “This is a company we are building together. No employee will ask for help unless he or she really needs it. It’s important to have empathy,“ she says.

Managing staff in a startup is different from managing employees of a 500-1,000-person company, says Sapna Vedagarbham, human resources director at Furlenco, a Bengaluru-based furniture rental company. She’s worked at larger organisations and says the difference is that startups don’t usually have defined policies.

As a company grows, it discovers what employees need and provides the required benefits, she explains. Furlenco, for instance, doesn’t cap sick leave for employees. “We’ve had a case of an employee being out of the office for three months due to a medical problem. We do not cut back on salaries in such cases,“ she says.

“Customers as well as people who buy into your vision and become part of your team are the ones who make your business and are integral to your success. It’s important to be conscious of it always,“ says Vijay Anand of The Startup Centre, a Chennai-based accelerator.

(inputs from Shalina Pillai)

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