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How cash-strapped startups can attract good employees

Whether they run a financially strong blue chip or a cash-strapped startup, most CEOs in Africa cite talent as one of their biggest hurdles. Attracting and retaining skilled staff is, however, a particular challenge for startups and small and medium enterprises (SMEs).

Myles Lutheran, a director at  Eco Fuels Kenya

Myles Lutheran, a director at Eco Fuels Kenya

Myles Lutheran is a director at social enterprise Eco Fuels Kenya. The company produces organic fertilisers and biofuels from its base in central Kenya.

Lutheran tells How we made it in Africa there is not a large talent pool in the area because most people lack academic qualifications and those who are qualified are already employed by institutions such as banks. The rest of the population, he explains, prefer to work in agriculture where there is more money and less risk compared to being involved with a startup. He adds that “people who are married with kids are less likely to work with a startup” because of its risky nature.

Lutheran says he uses personal connections to attract people who have a good reputation and can be trusted. Since the growing company cannot offer employees a lot of financial incentives, getting staff to see the bigger picture is important.

“The candidates have to recognise the opportunity. It is not about day to day operations, it is about what the company will become in the future,” says Lutheran. “If things go well in a couple of years they will be a mid-level manager… and have expertise that other people don’t.”

Kenyan entrepreneur Joanne Mwangi agrees, adding that getting one’s team to buy into the vision of the company increases the chances of employees staying put, even when on low salaries.

When she started her business 19 years ago, Mwangi did everything from cleaning the floors, to running errands and pitching to clients. As her marketing firm PMS Group began to flourish, she hired the “most important person in my business” – a messenger.

“Once I had a messenger it freed up perhaps 50% of my time to do what I was good at,” she says.

Mwangi advises small businesses with limited resources to hire people who have “got the right skills, the right attitude but not the experience and then grow with them”.

Arielle Sandor, co-founder of SMS-based job matching service DUMA Works, says startups and SMEs can position themselves as a good place for fresh graduates to gain skills and experience. However, employers should not expect to get away with poor pay, especially when they hire university graduates.

According to Sandor, “employers should not neglect the importance of training because it is a good incentive for young employees not to quit since they are still amassing skills”.

Innovative staff retention strategies

Veronica Anam-Waiyaki, a partner at Kenyan-based Human Capital Synergies Africa, says employers need to be creative and innovative when hiring and handling staff.

She reckons that the HR problems SMEs face are compounded by the fact that entrepreneurs often do not have training or experience in dealing with people. Often, employees do not live up to the expectations of the employer.

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