How Ringelmann Effect negatively impacts the growing startups?

The company can run successfully only with a good and positive team performance. But this may also have a negative influence if the size of the team grows. The Ringelmann effect is defined as the diminishing performance of an individual due to the increase in the size of the team. This is a phenomenon that is also known as social loafing in the startups.

What is social loafing and how does it impact growing start-ups?

This is a phenomenon that defines low performance and reduced productivity in any startup business. This is the effect of an individual’s performance that declines gradually when he is in a group but is highly productive when he is alone. According to social loafing, when there are many people engaged in doing a particular job, the tendency is to assume that someone else will take the responsibility and as a result the work is not done accurately.

It has been researched that the diffusion in responsibility is mainly due to the decreased pressure of an individual in large group. The theory of group development is only effective when the approach of the people to do the task depends solely upon the relationship with each other. In companies where there is cohesiveness, social loafing will be ineffective.

When should startups expand their team?

1. The startups need to expand their team only when they have ample resources. This is smart move and their major focus should be on the roles or employees that would help them to strengthen their business in both internal as well as external relationships.
2. When you decide to extend team, it is important to keep in mind the culture of your company and then fill in the right positions. Usually money is a bit tight for any startups and hiring more talent will be risky. So it is advisable not to hurry through this process.
3. You have to make sure that the people you hire to increase the head count should be aware of the specific needs of the company. It is mandatory for the employees to possess special qualities like for instance they need to be passionate about their work, should be flexible and be trustworthy.

What are the major challenges faced by startups and does outsourcing help?

The competition that is faced by startups in today’s world is risky and so they need to focus more on the operations of the business solely. The startups should be careful in taking tasks and should never compromise on quality and accuracy. The idea to outsource is good because it is an excellent way to connect with expert team who not only has the knowledge but also the skill to handle multiple tasks.

How can outsourcing help budding start-ups?

The startups should choose outsourcing for various valid reasons but it is important to be strategic in your approach. The areas where outsourcing can be beneficial have been listed below:

• Administrative duties:The areas that can be outsourced are the administrative duties. This means you are passing the responsibilities like taking notes and answering emails to outsourced workers. This will make you more confident as the outsourced assistants will keep your company organized and communicate promptly.
• IT Services:The other area is the IT services where you can keep your company more competitive. You are then basically working with a talent pool when you hire developers for startup and the IT outsourcing providers emphasize more on cutting-edge technology that is supportive to highest quality products.
• HR and Payroll:The other critical area where startups use outsourcing is the payroll. This will provide accuracy and it will protect you and your staff from any kind of legal punishments.

So what is the overall benefit of outsourcing?

We can sum up by saying that the startup owners can be successful only if they are able to utilize cost-effective solutions to build their business. By outsourcing certain areas of work to dedicated software development team, they can actually focus more on their core business, as well chalk out better plans of getting new customers or retaining old ones which is the key to business growth. This is how they can be actually functional, satisfy their consumers and avoid the critical errors that may damage the reputation of their brand. We at Dreamztech are here to extend our helping hand to all promising startup companies. Having helped more than 100 startups in the last one decade, we are all set to be your tech partner too. To get a better insight read our previous blogs, “How to hire custom software development agency for startups?” and, “Find & Hire Developers for Your Startup [2021 Guide]”