The Layoffs Ghost in Startups

Layoffs are not a new phenomenon, and in the Industrial dispute act there is a section (2kkk) defines it. The compliance is predominately imposed on large businesses and PSU’s. The Startups however enjoy Labor law exemptions for 3 years perhaps a reason why layoffs stories are now found to be contagious with many startups. When the boat starts to dwindle, the employees become soft targets for many organisations as compensations and benefits are part of the cost in their profit-loss statements.  Instead showing them the door and acts as cannibals, the Startups must learn to think and act differently towards their employees. A no layoff policy though can be a courageous move but can be rewarding in the long run. It can provide a quantum leap of faith for the employees and make them more responsible and sensible towards the enterprise. The role of the entrepreneur is vital in terms of setting his/her priorities and decide on the human resource policies and practices. Selections must not always focus on percentage rise in salaries rather the attitude towards remaining in the organisation. Opportunities to act as meaningful contributors, scope of learning and career growth, mutual respect, flexibility and fun at work can be a part of the employee development agenda. At the same  time the employees must realise that a journey in a startup is more like a roller coaster where there is unapprehended excitements and shocks waiting for you. VC’s may pull out, competition tightens thus leading the entrepreneur think to  leave the boat is more wise than remain in it. The decisions are hard yet evident and in most cases the axe falls on the employees first to readjust the balance sheet. But it results into a significant trust erosion which subsequently grips other startups and make them vulnerable. It possess great challenges others to attract talent. Many B-schools blacklisting startups is a symptom of the phenomenon.  A startup is more like a tribe and in a tribe the members are not left behind when there is a threat or adversity rather they are taken to confidence to face it.