xto10x, a scaling platform for growth-stage startups, surveyed over 50,000 employees across 150+ startups in a detailed culture study titled Startups Employees Love (SEL).
The study sought to understand what makes employees fulfilled at work, what their organisations excel at, and what is needed focus/improvement. The study revealed some interesting trends regarding organizational culture and eNPS (employee Net Promoter Score®) across startups in India.
Varying degrees of employee happiness!
The SEL survey revealed a wide range in the key measure of employee happiness: employee Net Promoter Score (eNPS). eNPS is a way of measuring how employees feel about their company and the organisational culture on a scale of 1 to 10. High eNPS scores are an indication of high levels of employee satisfaction.
The SEL survey found that eNPS ranged from 97 to as low as -3, showing that while some have cracked the secret to employee happiness, there is still some work to be done within the ecosystem. The study also showed that:
Roughly, only 15% of the companies surveyed scored over 70 on eNPS. The majority of startups surveyed had an eNPS score averaging 50-60, an indication that startups are headed in the right direction but there is scope for improvement.
A company’s greatest asset, and its strongest competitive advantage, are its team members. However, as organisations scaled beyond 100 employees, their eNPS scores dropped – indicating a crack in the culture due to a disconnect with the company mission and added layers of hierarchy leading to subcultures.
There are, however, exceptions to this rule at some startups. Legality, a document infrastructure platform for Indian businesses achieved the highest eNPS of all startups surveyed: 97! They achieved this despite a 1.7x growth in size, by focusing on performance management, manifestos, and rewards.
Some key areas emerged from the study that are important drivers of the eNPS:
Managers matter:
The study measured the impact of the Managers Recommendation Index (MRX) – a metric that checks how likely an employee is to recommend their manager to their friends – on overall eNPS. It found that the eNPS falls with the decline of MRX
20% of managers had a negative MRX score Issues like not valuing opinions, unfair treatment, lack of technical competency and empathy were the major reasons behind a low MRX score.
A sense of pride amongst employees:
97% of employees surveyed were proud to be associated with their organizations because they resonated with the problems they were solving. Furthermore, 95% of employees trust their teams – showing a culture of support and growth.
On the flip side, a decline in the “sense of pride” was also observed as startups scaled. There are a number of reasons for this, including an inability to help employees visualize the impact of their roles, a lack of unique organizational identity, a lack of inclusivity, and stagnant career development paths.
Work, Life, and Mental Health:
In recent years the line between work and life has blurred further, making employee wellbeing – both physical and mental – a top priority. The SEL survey found that:
Over 20% of startup employees feel that they completely lack work-life balance. Additionally, the lack of work-life balance negatively impacted their mental health, according to a majority of respondents
When employees feel physically and mentally fatigued, their productivity levels drop significantly. Moreover, they are not happy at work, resulting in high attrition rates.
The SEL study found that high work volumes, inefficient working methods, and unsatisfactory implementation of leave policies are common culprits in this problem.
Women in power:
Companies that have more than 40% women in their leadership teams had a better eNPS on average eNPS among women employees was a stark 18 points lower than men
Greater representation of women led to more inclusive policies, and more role models for women in the system, and signaled a lack of gender bias up the ladder.
Performance Management and Compensation:
The good news is that close to 80% of startup employees felt adequately compensated for their efforts and contribution. Approximately 70% lauded the people-friendly benefits at the workplace Startups that didn’t score highly in this area typically had outdated hike policies, poor ESOPs planning and communication around rewards, and a lack of hygiene benefits like reimbursements and insurance.
Employee interests over that of the Company:
Employee-first policies have been found to contribute greatly to improving employee morale, whether it’s allowing team members to work from anywhere or allowing them to take afternoon naps. Nearly 85% of employees surveyed feel their organizations have employee-friendly policies that motivate them, but about 11% of employees in the ecosystem do not.
The survey found that:
Flexible policies prevent employees from becoming disgruntled. There is a lack of internal parity of policies in startups. Different teams have different policies. Even logically designed policies that appear unfair on the surface can cause internal turmoil
Fast and Autonomous: The Efficient Decision-Making Machine
Over 15% of employees feel their organizations have ineffective decision-making systems and 14% feel that they do not have the autonomy to make decisions. Startups that rated low in this area threw up issues like slow decision-making processes, opaque decisions, prioritising short-term outcomes, and lack of empowerment.
Neeraj Aggarwal, Co-founder, and COO, xto10x, said Our daily conversations with startups reveal that organizational culture is not taken seriously enough. For a company to be resilient and stand the test of time, it needs a strong organisational culture as one of its key foundational pillars.*
He further added The SEL survey reveals key aspects companies must not ignore when building a strong organizational culture. Our aim is to highlight the impact of a strong organizational culture.