Startups are creating jobs, but that’s not enough [Report]

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While the majority of the surveyed workforce in the Middle East and North Africa (MENA) perceive working at a startup as a good career move, very few said they themselves are willing to work for one.

Findings such as these, from Wamda Research Lab’s latest report, Access to Talent for MENA’s Entrepreneurs, explores the processes, strategies, and barriers to talent recruitment and retention facing MENA’s entrepreneurs.

Published today in partnership with the International Finance Corporation (IFC), Bayt.com, and Beirut Digital District (BDD), the report also presents the workforce’s perspective on what they look for in a potential job, and their views on working at a startup.

The research builds on WRL’s previous report, Next steps: breaking the barriers to scale for MENA’s entrepreneurs which found that 24 percent of entrepreneurs cited building a team as their top challenge to scaling their company.

On competition

While MENA’s ecosystem has been growing at an accelerating rate over the past decade, the question remains whether entrepreneurship has diffused through the general population, and is impacting their perception of startup credibility, and job-risk appetite.

The study finds that 64 percent and 41 percent of the respective workforce would rather work for a large corporation, and the government than at a startup. Of those who previously worked at a startup, around one quarter left their job to work for a large corporation due to a higher salary.

Since startups can’t always compete with the salaries of large corporations, founders try to lure talent by offering them various non-salary benefits that are in line with the startup culture, such as equity, opportunities to innovate, and flexible working hours. But the study finds that the workforce cites non-wage benefits, such as health insurance and vacation days, in line with what large companies or governments typically offer, as more valuable than what startups are offering.

On satisfaction

The study also finds that, with the exception of the GCC, entrepreneurs are largely satisfied with the talent they have been able to find, and most are hiring locally. Entrepreneurs in Lebanon, Egypt, Tunisia, and Palestine are the most satisfied with their local talent.

Entrepreneurship can be a daunting wall to climb. (Image via Harvard Business Review)

At the same time, startup founders reported certain hard and soft skills are scarce within their local talent pool. Most notably, they expressed challenges in finding motivated and independent employees with sales and business development skills.

These obstacles can be partly explained by the fact that entrepreneurs are not diversifying their hiring channels. With over a third of them using their professional network to find new team members, and just under 7 percent relying on universities to source talent. This might be a missed opportunity for entrepreneurs as universities have a large talent pool of educated candidates eager to enter the workforce.

On job creation

The research shows that entrepreneurs intend to grow their teams within the next year, but the workforce has several reservations about job security if they were to take on these jobs.

If entrepreneurs do not offer attractive incentive packages for potential employees, then the chances of scaling their teams will be diminished. Additionally, policy makers, and universities as well as the media have an important role to play in promoting entrepreneurship culture for general population.

To download the full report, please scroll up and click on the green box to the right.

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