Hiring to depend on projects, additional fundings and expansion strategies
Having secured Series A and Series B funding with well-capitalized, 80.49% of the 300 startups surveyed are actively seeking to hire new talent.
While startups are planning to expand their workforce, a substantial portion, 31.92% anticipate an increase in hiring by over 30% while 28.08% of companies plan to expand their teams in the 11-20% range, according to the survey by FICCI in partnership with Randstad India, one of the leading organizations in the HR services industry,
But 92% of these startups stated that their hiring decisions will primarily be driven by new project orders, additional funding raised from investors and expansion strategies, says the survey released 28 Mar 2023.
Sectors like Agri/Agritech, AI/ML/Deeptech, Automotive, and E-commerce/delivery services are expected to increase hiring in the 11-20% range, while Aerospace & Defense, Energy, and Healthcare startups are expected to increase their hiring activities by over 30%.
Overall, sectors depicting the highest intent to hire include healthcare (13%), IT/ITes (10%), agri/agritech (8%), AI/ML/DeepTech (7%), Fintech (7%) and Manufacturing (7%).
The Agri/agritech and automotive sectors will focus more on senior level C-suite hiring, while hiring will primarily occur at the junior and mid-levels.
Approximately 37.97% of startups have indicated that they intend to recruit more junior-level employees, while 27.27% of respondents are planning to focus on mid-level hiring.
The survey further indicates that 54.38% of startups attribute the high attrition rate in the industry to factors such as better pay packages offered by larger corporations, as well as concerns over job security in a startup.
Other factors contributing to attrition in startups include a lack of clarity around career progression and credibility.
Interestingly, 57.28% of the surveyed startups believe that ESOPs (Employee Stock Option Pool) have the potential to serve as an effective instrument for retaining employees.
Furthermore, 41.49% of surveyed startups have already implemented ESOPs as a retention strategy.
In terms of hiring challenges faced by startups, the primary factors include a deficit in requisite skills, mismatches in salary expectations, and a reluctance among potential candidates to join a startup due to concerns over risk perception.
“Startups create a large range of jobs as they grow and mature,” said Rohit Bansal, Chairman – FICCI Start-up Committee, and Co-founder, AceVector Group & Titan Capital.
“The dynamic working environment in startups provides the ideal training ground for aspiring entrepreneurs who then move on to create their own startups.
“This creates a virtuous cycle of growth, with each successive cohort adding jobs and enterprises. With their pan-India footprint, startups create jobs and economic opportunities beyond just the top cities and are key partners in India’s growth story,” said Bansal.
Startups are rapidly emerging as significant players in India’s employment landscape, added Viswanath PS, MD & CEO, Randstad India.
With the emergence of several new-age innovative organizations across sectors, the Indian start-up ecosystem will be a significant contributor to India’s economic growth over the next few years.
“More importantly, these startups will eventually go on to create unique employment opportunities and career paths, innovation and competitive dynamics in the world of work,” he said.
Startup recruitment trends
Permanent vs Gig Workforce
57.76% of startups are looking for permanent recruits
Only 42.24% are looking to hire temporary and gig workers
Hyderabad and Pune are emerging as the frontrunners in senior-level hiring, reflecting strong intent among startups in these regions.
Additionally, middle-level hiring is expected to be prominent across cities such as Kolkata, Bengaluru, Mumbai, Chennai, Pune, and Delhi/NCR.
A considerable proportion of hiring activity across startups is expected to occur at the junior level, with Delhi/NCR, Bengaluru, Mumbai, and Hyderabad being the prominent cities in this category. fiinews.com
