Almost 80% Of Early-stage Startups Are Looking To Hire In 2023: Report
Around 92 per cent of these startups stated that their hiring decisions will primarily be driven by new project orders, additional funding raised from investors and expansion strategies
Despite the current trend of layoffs among larger corporations, the survey highlights that a significant proportion 80 per cent of early-stage startups, those with a current workforce of fewer than 20 employees, are actively seeking to expand their workforce in 2023.
Notably, these startups have secured Series A and Series B funding, are well-capitalised and are actively seeking to hire new talent. around 92 per cent of these startups stated that their hiring decisions will primarily be driven by new project orders, additional funding raised from investors and expansion strategies.
While startups are planning to expand their workforce, a substantial portion, 31.92 per cent anticipate an increase in hiring by over 30 per cent. About 28.08 per cent of companies plan to expand their teams in the 11-20 per cent range.
Sectors such as agritech, deeptech, automotive and ecommerce and delivery services are expected to increase hiring in the 11-20 per cent range, while aerospace and defence, energy and healthcare startups are expected to increase their hiring activities by over 30 per cent.
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 study also states that hiring will primarily occur at the junior and mid-levels. Approximately 37.97 per cent of startups have indicated that they intend to recruit more junior-level employees, while 27.27 per cent of respondents are planning to focus on mid-level hiring. However,
The agritech and automotive sectors will focus more on senior-level C-suite hiring.
The survey further indicates that 54.38 per cent 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 per cent 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 per cent 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.
Presenting insights from the startup hiring trends survey, Viswanath PS, MD and CEO, Randstad India said, “Every large corporation once started as an early-stage company and navigated its way through several challenges to reach where they are today. 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."
Rohit Bansal, Chairman - FICCI startup Committee and Co-founder, AceVector Group and Titan Capital commenting on the survey said, “Startups create a large range of jobs as they grow and mature. A multiplier impact on job creation is seen in the growth and expansion stage when operations expand and various initiatives mature. The dynamic working environment in startups provides the ideal training ground for aspiring entrepreneurs who then move on to create their own startups. 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.”
Startup recruitment trends
a. Permanent vs Gig Workforce
● 57.76 per cent of startups are looking for permanent recruits
● Only 42.24 per cent are looking to hire temporary and gig workers
b. Geography in Focus
● 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.
c. Qualifications in Demand
● 45.21 per cent of startups are looking to hire semi-skilled employees, while 41.49 per cent of startups are seeking highly skilled professionals.
● In terms of campus placements, a majority of startups, (67.55%) are focusing on private MBA and engineering colleges, as well as state universities, as these institutes offer quality talent at affordable salary packages.
● Only a small proportion (9.16%) of startups are opting for premier institutions such as IITs and IIMs for their campus placements.
The Federation of Indian Chambers of Commerce and Industry (FICCI) in partnership with Randstad India, one of the leading organizations in the HR services industry, has launched their exclusive survey on startup hiring trends. Over 300 startups participated in the survey.
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