In Africa’s technology start-up scene, one of the most difficult challenges is attracting and retaining talent. The tools used by Silicon Valley, London, and Paris to hire top talent — namely stock options — seldom work in Africa. With limited exit opportunities via initial public offers (IPOs) and acquisitions, smart young people understand that stock options rarely bring a big payday. Thus begins a cycle of frustration in Africa’s tech sector around the ability to hire and retain the right team.
Africa has a limited talent pool, particularly in technology fields. In some parts of the continent, universities struggle to stay open due to incessant strikes and riots. And the same infrastructure challenges derailing some countries’ economies are also evident in the schools, which are often burdened with poor learning facilities or nonfunctioning utilities like electricity and water. While graduate unemployment is very high, companies struggle to find new hires with the right skills. Across the continent, there are complaints that African graduates are poorly prepared for the workplace. Unlike multinational companies in other parts of the world, the option of importing foreign talent or African diasporas is not always feasible.
The talent problem is further exacerbated by the global entrepreneurial revolution, which has caused many talented job seekers to think that starting their own company is the ultimate path to success. According to the research report “Accelerating Entrepreneurship in Africa,” 57% of survey respondents in major African economies considered becoming an entrepreneur a desirable career choice. With the cost of starting digital companies low, local governments stimulating entrepreneurship, and venture capitalists expanding operations, graduates are seeking to become their own bosses right out of college. But with the talent pool stretched, even founders struggle to find partners or staff.
The few talented individuals that want to work for others deservedly go for the highest bidders for their services. Usually, they choose foreign-funded start-ups that pay better and offer great work environments. With the cost of wages inflated as companies compete for talent, the under-funded local start-ups struggle to build teams. Some have even designed illegal contracts that make it difficult for workers to leave. Indeed, most promising local start-ups in Africa collapse or struggle because of talent hiring and retention issues; a World Bank report notes that “enterprises in Africa struggle to fill open positions.”
Consider these examples: During a workshop organized by Omidyar Network and Legatum for finalists of Africa Awards for Entrepreneurship a few years ago, an eastern African founder explained how losing staff after training has become so cyclical that he decided to hold off expansion plans. And last year, a business partner of mine in northern Nigeria closed his company when he lost many of his core technical staff – even though the Nigerian government had provided him money to expand through its entrepreneurship support program. He invested in training his staff, but that backfired as those individuals then became more marketable and moved on.
As a local technology company owner in Nigeria with pan-African operations, here are a few suggestions for mitigating talent challenges in Africa’s technology start-up ecosystem:
Be an expert: A company founder needs to be skilled in his or her area of business. It is a core continuity management strategy in a market scarce on technology talent. Even with a highly committed partner, a company owner needs the ability to confidently lead the firm – and do necessary work – in the event that there’s a sudden departure of key talent. Most people know start-ups are risky places to work, but the failure of a product prototype because you lacked the ability to deliver it properly could make your next great hire look elsewhere.
Emphasize passion: You may not win a wage-bidding war, but you can attract great talent if what your business does inspires passion. When I was setting up my firm, I became Facebook friends with many members of my core, pioneering technical team. I observed their interests. With this in mind, I was able to recruit them more effectively. For example, someone that liked electronics development likely wouldn’t jump for an administrative job in a bank with marginal pay difference. With passionate enthusiasts matched to the right job, our team is largely stable.
Nurture your workers: Never miss paying a salary, and never agree to pay what you cannot afford. In Africa, where owing salaries can be common, simply paying on time is an important retention strategy. Be generous with business titles, and do not ignore the usual perks of networking events, paid vacations, and small end-of-year bonuses — no matter how small. Once in a while, after a great success, share profits. Think carefully about your pension strategy in countries like Nigeria, Angola, and Ghana since the continuous currency devaluation and high inflation rate make them risky. We pay the minimum required by law and give the remaining cash to team members.
Be exciting: You can’t allow your start-up to be dull. Come up with new ideas and business models to energize your team. Inspire them with the company’s big picture. With governments offering individuals financial incentives to become entrepreneurs, you must find ways to encourage your team to lend their new ideas internally, instead of leaving to start their own ventures. You need to be re-recruiting them even when they are already working for you.
Focus on culture fit: A great talent may not worth the trouble if the person can’t fit into the culture of the company. They can alienate colleagues and cause problems with clients and partners. You must learn to fire fast — even as you hire slowly.
Relocate: When I lost some key team members to other jobs in Lagos I decided to move to a smaller city of Owerri. This location has meant my key design team is not as easily accessible by headhunters. You can keep a marketing team anywhere, but keeping your design or technical teams out of the usual tech hubs can help keep them focused on your company.
Finally, no matter what your strategies are, you can expect that after all the training, nurturing, and motivation, talented people will always quit. Be prepared for that possibility and never show malice — that is part of doing business. To overcome these talent gaps, African entrepreneurs can lead by truly understanding their region’s specific challenges. Our continent’s talent problem is an opportunity that can’t just be left to governments to fix.
Ndubuisi Ekekwe is a founder of the non-profit African Institution of Technology. He recently edited Nanotechnology and Microelectronics: Global Diffusion, Economics, and Policy