Motivation of employees in start-up projects in current conditions in Kazakhstan

Summary: The article describes difference in motivation factors between employees in start-up companies and workers employed in traditional spheres (e.g. production). The research is based on the questionnaire of more than fifty employees and tries to show the key factors of motivation except financial bonuses.

As the general tendency of population growth in Kazakhstan continues to progress in positive direction (reaching 18.1 million people by February 2018) [1], age structure undergoes significant changes. In 2018 labor age will be reached by the generation born in the 1990s, the time of demographic decline and sizeable outflow of the population, see chart 1.

Chart 1. Kazakhstan population age structure [2] 

At the same time due to significant share of shadow economy where material portion of population is engaged as well as incompatibility of the levels of qualification/education demanded by market; slow urbanization rate and certain distance related restrictions (in cope with logistical issues) in recent years about 25 % of the population of Kazakhstan is inactive, see chart 2 [3].

Chart 2. Population of the Kazakhstan in the context of employment, million people [3]

Inactive portion of the population comes due to reasons reflected in the chart 3. As seen in the chart, most part of the inactive population contribute students of the daily form of education, however their proportion is continuously declining [3].

Chart 3. Inactive population of the Kazakhstan (15-64 years old), thousands people [3]

Consequently, currently there has been a halt in the growth of the working-age population (15-64 years old) affecting the total size of the workforce, consisting of the employed and unemployed population, see chart 4.

Chart 4. Halt of the working-age population in Kazakhstan, million people [3]

Employed population consists of wage labor (74 %) and self-employed population (26 %). Wage labor population is 6.4 million and in comparison with 2007, their share has increased by about 10 pp to 75 % corresponding to a decrease in the proportion of the self-employed population [3]. As per the annual analytical report of the Kazakhstani labor market conducted by the recruiting company Antal Kazakhstan, 43 % of the surveyed employees (wage labor market) are either looking or plan to look for the new job opportunities, see chart 5.

Chart 5. Job searching plans by the wage labor market employees [4] 

Among surveyed employees, only 49 % are satisfied with the workload-reward ratio, while 23 % are neutral and 28 % being satisfied [3]. At the same time 75 % report to be satisfied with company culture.

In that matter, when significant part of the employed population (43 %) is willing to change their employer and halt of the working-age population in the country, how start-up projects may compete in attraction and retention of the employees?

In this paper, we will study how employees of regular companies and start-up projects similar and different to each other in terms of their demographic profile, and what is more important, in terms of their motivation factors.

Disclaimer: the survey has been conducted among companies (both regular and start-ups located in Almaty only), in that matter reader may wish to narrow its results from national to Almaty only.

Demographic profile of the employees in regular and start-up projects: similarities and differencies

Survey was conducted among 51 employees, among them 28 people work in start-up projects and the rest in the regular companies operating in trading, banking, pharmaceutical, production and other spheres. All regular companies are in the market for more than 10 years, all private, both local and international. All surveyed employees must me full-time permanent employees of their companies. Start-up projects whose employees participated in the survey are projects less than 5 (in most cases 3) years since launch, operating in spheres as IT services, robotics; online legal, education and logistics services. There has been no quota set for such parameters as age, gender, level of education or time working for the employer. Further, start-up employees will be marked as SUE, and regular companies’ employees as REE.

Summary of demographic, education and other parameters are reflected in the Table 1.

Table 1

Summary of demographic, education and other parameters

Average monthly wage of SUE is significantly lower than REE. At the same time 78 % of SUE believe their wage is in line with market anchor, rest noting it to be below and 0 % choosing “above market anchor”; while 61 % of REE believing their wage is in line with market anchor, 17 % thinking it is above and 22 % - below.

Source of information about future employer for both groups is reflected in сhart 6 and 7.

Chart 6. Source of information about employer, SUE

Chart 7. Source of information about employer, REE

Interestingly, that 22 % of REE have found their current employer via recruiting agency, while for SUE this source comprises only 4 %, at the same time SUE more often use digital platforms (such as Head Hunter.kz etc) to find job compared to 13 % by REE.

Table 2

Motivation factors analysis

Job satisfaction index (I) is calculated with following formula [5]:

Overall, SUE tend to be more satisfied with their companies, than REE. Mostly, SUE are satisfied with relationship with management and independency employer is providing them. This could be explained by the fact that start up teams usually smaller in size and organizational structure is rather flat compared to regular organizations.

Lowest satisfaction index SUE showed on wage satisfaction (1,06), which supports the wage comparison, where SUE average monthly wage is 46 % lower than REE. At the same time SUE list wage among top three most important job factors.

Table 3

SUE and REE

SUE are significantly more often satisfied with diversity of their job tasks compared to REE (I_SUE = 1,59; I_REE = 0,83), way of problem solving (efficiency) and correspondence of work to personal abilities (I_SUE = 1,79; I_REE = 1,18).

Both groups similarly evaluate their current work productivity with SUE slightly higher rate it at 73 % (out of 100 %) and REE at 71 %.

Conclusion

In general, profile of SUE is different to regular companies: start ups usually higher younger mostly BA degree holders. With the demographic structure change, where generation of the 1990s will reach working age, this could mean intensification of competition for young professionals among employees.

To attract and retain talented employees start ups are recommended to pay special attention to:

- amount of wage, as SUE list this factor among three most important. However, the work done has revealed the need for further research. In particular, it is necessary to study how much wage of young employees (recent graduates) differs in regular companies from start-ups;
- although, diversity of task is rated significantly higher among SUE, it is important for start up owners and managers to keep their employees in track of their professional development. As such factor as “development opportunities” are rated almost the same among both groups, while wage in in startup companies is significantly lower than in regular ones;
- lastly, as usually start up companies are smaller in size (which provides additional benefits such as diversity of their job tasks and relationship with management) career opportunities are relatively limited. In that matter, it is recommended for startup owners to investigate and engage employees on how company development may affect career opportunities for its employees.

References

1. Ministry of National economy of the Republic of Kazakhstan. Statistics Committee, Population as of March 1, 2018. Available at: http://stat.gov.kz/faces/homePage;jsessionid=iDO-3inV98KzCjH-JGCVhNzfHGu5KGyyjf6byN5MFKp748X99_Hm!-271889599!-1554912078?_afrLoop=8185566359685551#%40%3F_afrLoop%3D8185566359685551%26_adf.ctrl-state%3Dd89n0ys9y_4  (was available on April 13, 2018).
2. US Central Intelligence Agency. The World Factbook. Kazakhstan (was available on April 13, 2018) (accessed 13 April 2018).
3. Halyk Finance. Kazakhstan Labor Market Review 2018, January 2018. Available at: http://www.halykfinance.kz/ru/site/index/research/report:110421 (accessed 13 April 2018).
4. Antal Kazakhstan Recruiting Agency. Labor market research and review of payroll Kazakhstan 2017. Available at: https://antalkazakhstan.kz/upload/medialibrary/8d8/pervye-rezultaty-issledovaniya-rynka-truda_2017_kz_infografika_rus.pdf.pdf (accessed 13 April 2018).
5. Kibanova A., compiler, Human Resource Management. Moscow, Infra-M, 2003, p. 215.

 

Материал поступил в редакцию 16.06.2018
© Аскаров Д. Т., Белеуханова А., 2018