FOUNDATIONS OF ENTREPRENEURSHIP

1. FOUNDATIONS OF ENTREPRENEURSHIP CLASS SEVEN: ATTRACTING AND MANAGING HUMAN RESOURCE CAPITAL ElikemNutifafaKuenyehia Management Consultant and Corporate Lawyer

2. Class 8 Outline • Hand in mid-semester assignment • Mid-term assessment of Class & Lecturer • Recap of Class 7 • Attracting & Managing Human Capital • Laws Affecting Human Capital • Labour Law • Social Security & National Trust Law • Workmen Compensation Law • Factories, Offices and Shops Act

3. Attracting & Managing Human Capital • Ability to attract and retain human capital is one of the hallmarks of successful entrepreneurship • Resources must be spent in identifying, attracting and retaining talent • Dual focus of attracting & retaining • Expensive to replace a lost employee • Ability to so attract & retain depends in part on entrepreneurial leadership

4. Entrepreneurial Leadership • Entrepreneurial Leadership is inspiring and motivating people. It involves: • Setting a vision for the enterprise • “selling' that vision to key stakeholders (incl. employees) • Influencing & Inspiring others to work with the entrepreneur to achieve the vision • Challenge employees, empower them and give them freedom to achieve results • Must balance empowerment with controls

5. To hire or not to hire? • Many start up entrepreneurs want to avoid a wage bill and therefore do everything themselves • Risk is that entrepreneur may not have the relevant skill set to perform some of the roles • Should therefore strike balance between need to save cost and the importance of getting people with right skill sets to perform the relevant roles • Be creative if you cannot afford to hire F/T employees

6. Creatively filling Human Capital needs • Hire Part-time employees. Could be people working elsewhere or students (e.g. University students or students doing professional exams) • E.g GIJ students writing for magazine; NVTI students helping out as trainee chefs at restaurant • Outsource certain tasks especially research to university students working under marketing lecturers • Risks include: • Potential lack of commitment • Potential loss of confidentiality

7. Shortfalls of entrepreneurs in attracting & retaining human capital • Do not consider wide enough talent pool • Lack of rigorous selection/interview process • Solo decision making without consultation • Micro-manging employees • Could lead to frustration and lack of creativity • Important to have controls & pro-actively manage/monitor • BUT should give some room for creativity & initiative especially in case of highly skilled experienced professional

8. Attracting & Retaining Human Capital • Demonstrate entrepreneurial leadership • Create a set of beliefs and passionately pursue them • Set the right examples for employees to follow. Be accountable to same standards as you hold employees • Behave with integrity at all times • Respect and support employees • Constant Communication • Celebrate success • Encourage creativity amongst workers • Maintain sense of humour

9. Hiring & Firing • Don't just hire people you know/are related to • Invest time to find and interview the right people • Design an organogram, each role with a job description & profile of kind of employee required • Shortlist a few candidates to interview • Shortlist based on job description & potential risks • May decide to headhunt. But take references

10. Interviewing • Should put thought and effort into interviewing • Ensure relative standardization of interview Qs to ensure apple-to-apple comparison • Also, have interview evaluation sheet • Ask questions that will give insight into candidate's qualification, experience & character • Ask open ended questions • Ask for examples/scenarios to determine whether he can do the job • If straight out of school, evidence of leadership etc

11. Interviewing Stages • Preliminaries • Aim is to relax candidate so as to get best out of him/her • Describe the role & company • Questions • Ask detailed questions relating to candidates experience • Wrapping Up • Give candidate opportunity to ask questions • Reiterate key highlights about role/company – 'Sell Company”

12. Labour Law • A person employed for six months or more must be given a contract of employment • Should express rights & obligations of the parties • Required by law to provide written statement signed by parties of key terms • Should include pay, holidays, sick pay (if any), pension etc • Act guarantees fifteen working days' leave with full pay for every calendar year of continuous service

13. Social Security Law • Applies to every employer of an establishment and every worker employed in the establishment • Self employed persons (those who have no other employee but themselves) may opt in • Employers required to deduct 5% of worker's pay and to contribute 12.5% of workers pay • This amount cannot be deducted from workers pay