Talent acquisition in startups in India: the role of social capital

The purpose of this paper is to explore the talent acquisition practices adopted by startups and understand how small entrepreneurs leverage social capital to address the talent acquisition challenges faced by them, and; identify some of the unique parameters adopted by startups in talent acquisition.

This study uses a multiple case study method to explore the talent acquisition practices in startups in India. The study included six case studies on startups in Hubli city of North Karnataka in India.

This paper finds that startups (especially in smaller cities) face challenges such as lower quality of talent pool, absence of a brand name, inability to provide competitive salary and other benefits as per industry standards and locational disadvantages in talent acquisition. Thus, entrepreneurs leverage their social capital for talent acquisition by handpicking talent on the basis of familiarity or credible networks and recommendations. Incubation centres provide institutionalized sources of social capital to help them attract good talent. This study finds that employee-culture fit and trust play important role in acquiring talent in startups.

The study has implications for startup entrepreneurs, recruitment service providers, incubation centres, trainers, policymakers, etc. The study provides useful insights to the startups with regard to their recruitment practices.

This study contributes to the literature in the domains of talent acquisition, startups and social capital by describing hiring challenges faced by startups and exploring the mechanisms used by them in overcoming such challenges.