HR Challenges of Jordanian Startups

HR CHALLENGES OF JORDANIAN START-UPS

November 2019

PARTICIPANTS PROFILE

87 Responses

Industry of Business Education

9%

Fintech

8%

SaaS

10%

Retail

5%

Manufacturing

13%

HealthCare

8%

F&B

6%

Other

Number of Employees 54%

23%

41%

Is this your first venture?

9%

6%

Growth Projections for 2020

8% 51.7% Yes 36%

18.4%

No 64%

1 to 10

11 to 30

31 to 50

51 to 100

More than 100

0 -10%

13.8%

11 - 30%

31 - 50%

16%

>100%

HR CHALLENGES

1

HIRING AND RETAINING TALENT MAIN DRIVERS OF GROWTH FOR COMPANIES:

According to the majority of entrepreneurs, PRODUCT is the main key driver for the company’s growth, followed by the TEAM.

Product

70%

Team

66%

Co-founder

60%

Access to markets

50%

Access to finance

50%

HR CHALLENGES

2

HIRING AND RETAINING TALENT

Around 85% of interviewed start-ups are planning to hire talent in the near future.

Yes

85%

No

5%

Maybe

11%

HR CHALLENGES

3

HIRING AND RETAINING TALENT ENTREPRENEURS AGREE THAT EMPLOYEE REFERRALS ARE THE BEST SOURCE OF HIRE, FOLLOWED BY SOCIAL MEDIA.

Referrals

79%

Social media

63%

Online recruitment

38%

Links to universities

28%

Support organizations

21%

Job fairs

18%

Agencies

17%

HR CHALLENGES

4

HIRING AND RETAINING TALENT MORE THAN 80% OF THE INTERVIEWED COMPANIES CONDUCT REFERENCE CHECKS WHEN RECRUITING NEW STAFF MEMBERS.

Reference checks allow a recruiter to get independent insight about a candidate’s previous on-the-job performance.

It verifies the information provided by the candidate on their resume and during the interview.

Yes

82%

No

18%

HR CHALLENGES

5

HIRING AND RETAINING TALENT

The most common tests used by Jordanian entrepreneurs are the job skills test & personality tests.

PRE-EMPLOYMENT ASSESSMENTS ARE BEING USED IN ALL ASPECTS OF THE BUSINESS WORLD TODAY. MANY COMPANIES UTILIZE TESTS IN THE HIRING PROCESS TO AID IN THE SELECTION PROCESS, LONG-TERM RETENTION, AND BETTER JOB FIT.

Job skills test

70%

Personality test

51%

None of the above

18%

Other

17%

Basic literacy & math skills

14%

HR CHALLENGES

6

HIRING AND RETAINING TALENT MORE THAN 90% OF THE COMPANIES FIND IT CHALLENGING TO HIRE QUALIFIED STAFF

Yes

93%

No

7%

HR CHALLENGES

7

HIRING AND RETAINING TALENT MOST CHALLENGING SENIOR & JUNIOR POSITIONS TO RECRUIT FOR ARE BUSINESS DEVELOPMENT & SALES RESPECTIVELY.

Senior positions

Junior positions

47%

55%

65%

73%

HR

Finance

IT

Marketing

75%

Business Development

29%

39%

63%

Finance

HR

Marketing

67%

Operations

75%

Sales

HR CHALLENGES

8

HIRING AND RETAINING TALENT

Entrepreneurs believe that lack of motivation and attitude, and lack of soft skills are the main challenges in finding qualified staff.

Motivation & attitude

64%

Lack of soft skills

48%

High salary expectations

44%

Level of work ethic

41%

Demand for talent > supply

34%

Lack of culture fit

34%

Do not want a job at a start-up

25%

High competition

16%

Restrictive labor laws

10%

Lack of advertising channels

3%

Willingness to travel

1%

HR CHALLENGES

9

HIRING AND RETAINING TALENT

Entrepreneurs find it extremely hard to retain talent due to high salary expectations & lack of clear career development plans.

Salary & benefits

64%

Career development

38%

Opportunities outside of Jordan

35%

Work-life balance

30%

Relationship with supervisor

21%

Work environment

18%

Working schedules

16%

Started own business

14%

Boredom of millenials

13%

Persuit of education

13%

Conflict with colleagues

8%

Family responsibility

8%

Other

6%

HR CHALLENGES

10

HIRING AND RETAINING TALENT

If entrepreneurs got the chance to recruit talent from any county in the world, the majority would hire from Jordan, followed by Egypt, India, & USA.

Jordan

18%

Egypt

9%

India

9%

USA

9%

UK

6%

Others

49%

HR CHALLENGES

11

HR SYSTEMS

Less than one-third of the interviewed entrepreneurs believe that their HR function is “very effective�.

Entrepreneurs believe that the absence of HR department within their company is not affecting the performance of their business

60% of the companies do not have an HR department

Yes

41%

Yes

30%

No

60%

No

70%

HR CHALLENGES

12

HR SYSTEMS

Most start-ups have job descriptions in place. Salary scales & appraisals are less commonly found.

Job descriptions

72%

Salary scale

48%

Employee appraisal

42%

Employee handbook

40%

Travel policy

37%

ESOP

33%

HR information system

31%

Incentive system

31%

Satisfaction surveys

25%

Gender diversity

24%

Competency framework

13%

Incentive for working moms

12%

None of the above

8%

HR CHALLENGES

13

HR SYSTEMS

Around 60% of start-ups believe that they have clear career paths for their employees.

Yes

60%

No

40%

HR CHALLENGES

14

HR SYSTEMS

The majority of entrepreneurs believe that people join start-ups for both the founder and the business itself.

The company

28%

The founder

7%

Both

65%

HR CHALLENGES

15

CULTURE

Two of the biggest challenges pertaining to HR issues are hiring qualified staff and maintaining the culture of the company.

Hiring qualified staff

76%

Maintaining culture

51%

Retaining staff

43%

Performance evaluation

37%

Compensation & benefits

34%

Labor laws & regulations

30%

HR CHALLENGES

16

CULTURE

Salary & benefits, work environment & career development are the 3 key drivers for retaining talent.

Salary & benefits

81%

Work environment

64%

Career development

55%

Leadership development plans

31%

Relationship with colleagues

30%

Working hours

21%

Location

12%

Performance management systems

9%

Gender diversity

5%

On-boarding program

2%

HR CHALLENGES

17

CULTURE

More than 50% of interviewed entrepreneurs believe that the CEO sets the office culture.

CEO

60%

Team

24%

HR Manager

9%

Other

8%

HR CHALLENGES

18

CULTURE

The majority of start-ups support their employees' professional development & career growth through local training programs, coaching & mentoring and on-the-job learning.

Local training programs

72%

Coaching & mentoring

72%

On-the-job learning

72%

Promotions

51%

Leadership programs

39%

Global training programs

37%

Executive Education programs

10%

Other

2%

HR CHALLENGES

19

CULTURE

The majority of start-ups encourage risk taking.

Yes No

If employees fail to meet their targets, CEOs predominantly reflect with them about their mistakes.

82%

Reflect with them about their mistakes

85%

Warn them

13%

18% Fire them

2%

HR CHALLENGES

20

CULTURE

Companies celebrate success predominantly through recognitions and bonuses.

Recognition

81%

Bonuses

67%

Retreats

30%

Gifts

30%

Days off

27%

HR CHALLENGES

21

LABOR REGULATORY ENVIRONMENT IN JORDAN

Social Security payments are the most challenging aspects regarding labor regulatory environment.

MOST IMPORTANT ASPECTS OF THE LABOR REGULATORY ENVIRONMENT THAT IMPACTS THE ABILITY OF COMPANIES TO OPERATE AND SCALE:

Hiring foreign talent

67%

Social security

61%

Flexible & part-time work

31%

Firing

22%

Minimum wage

21%

Compensation

15%

Maternity leave

15%

Childcare regulations

8%

HR CHALLENGES

22

CONTACTS Endeavor Jordan 7 Kamal Junblat St. ,5th Circle, Amman Tel: +962 6 5939 160 endeavorjoinfo@endeavor.org Connect with Endeavor

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