Why employee engagement and employee retention are crucial in a start-up

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These start-ups have not only accelerated the pace of innovation in providing solutions but have also offered alternative career-growth paths to a lot of people. The efficiency in the functioning of organisations, however, depends on a workforce that’s driven and engaged.

Once considered the turf of experienced and seasoned professionals, the corporate world is now metamorphosing. Entrepreneurs with their diverse out-of-the-box business ideas are driving this change and the explosion in the start-up ecosystem has been great to see. These start-ups have not only accelerated the pace of innovation in providing  solutions but have also offered alternative career-growth paths to a lot of people. The efficiency in the functioning of organisations, however, depends  on a workforce that’s driven and engaged.

Sometimes, workforce engagement gets neglected due to factors such as  limited cash flow, crazy work hours, investor pressure and high stress.. A large part of the resources  is deployed into research and development, besides marketing, for the start-up to maintain a competitive edge. This race often leads to employee wellbeing initiatives getting short shrift, in turn  causing  disengagement, burnout and high attrition.


Why is employee engagement so critical in a start-up?

Employee retention is not only contingent upon, but also closely knit with, employee engagement. Start-ups, understandably, have a lot on their plate right from the start, but actively engaging the workforce should also be a big  part of it. Employees are the main resources of any organisation. The success of any organisation depends upon the mindset of its employees.

A well-engaged workforce boosts operational efficiency, which  drives results. The responsibility of nurturing a motivated and meaningfully-engaged workforce lies  with the leadership. Employee engagement does not end with offering monetary benefits or perks to the employees, but involves the deployment of various methods through which employees remain satisfied and happy.

Here’s where the challenges arise. As mentioned earlier, a lot of the funds are diverted towards product development and marketing, after which resources for employee engagement activities become scarce. However, neglect of the same isn’t a smart move either. The larger picture becomes pleasing only if investments are made towards ensuring employee welfare and job satisfaction.


Benefits of investing in employee engagement:

  • Employee Retention: Fast-growing start-ups are perpetually in a race against time, and they are constantly harrowed by one thing - hiring. Every organisation looks to hire the best talent for running the show, which means HR leaders are under constant pressure to onboard the right people for the business. However, a lack of effective human resource management often drives the employees away. A lack of recognition is also one of the reasons why employees become disinterested in their work and look for alternatives. US-based Founders Circle Capital surveyed 25 large hyper-growth start-ups aka ‘unicorns’ valued at over  $1 billion and found that one in four employees quit within one year of joining. That translates into a massive attrition rate of 25%. This is nearly two times the average industry attrition rate of 13%, as reported by LinkedIn. Appreciation of work and acknowledgement of the value added go a long way in keeping employees happy. Employees reciprocate the gestures by being loyal and diligent.It also projects the employer in a good light, which is key for a start-up scouting for top-notch talent.
  • Improved Productivity: Handsome pay packages are not enough to keep employees motivated. They only create the impression of ‘work more to earn more’, which isn’t a great way to make your personnel happy. Employee-engagement practices need not be large conclaves or team-building exercises. Timely appreciation and performance-based rewards do an equally good job of motivating employees to strive for results. If each employee were to give their best to the job, the organisation would grow by leaps and bounds.
  • Work Culture: The work culture in any organisation plays a key role in determining its success and Employees must feel aligned to the goals of the business, not only as individuals but also as a  team. Employee-engagement activities also come in handy in instilling a sense of belonging. Employees also adhere to work ethics when they feel responsible for the reputation of the employer.
  • Employee Advocacy: Employees themselves are the best advocates of the brand or the organisation they work with. The voice of the employees is a critical piece of the puzzle in building a strong brand identity. When their own personnel vouch for the organisation, it creates a climate  of trust in the employer. It contributes significantly on three fronts – onboarding talent, attracting new customers and building relationships with new clients.
  • Employee Experience: British businessman Richard Branson once said, “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.” An employee’s experience starts on his/her first day on the job and employers must leave no stone unturned in ensuring that it is smooth and hassle-free. All events participated in, and all milestones achieved constitute the employee experience and they fall under the umbrella of workplace engagement.


Engagement programs are of paramount importance to the sustainability of businesses in the long run. They save employees from the toxic feelings of dissatisfaction, demotivation and burnout.

Original Article: https://www.peoplematters.in/article/employee-engagement/why-employee-engagement-and-employee-retention-are-crucial-in-a-start-up-31353

Founded in 2017 in Cape Town, South Africa, Olympia Engage provides companies with a highly advanced, yet simple to use performance management system to help engage, inspire and reward their people. Get everyone performing at their best and reap the rewards with Olympia Engage!
Olympia Holdings
The Vineyards Office Estate, Manor House, 99 Jip De Jager Road, Bellville, Cape Town, 7530, South Africa
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