Indian startups cut hiring by 44 percent in the fourth quarter of 2022 from levels in the first quarter of last year, a survey showed.
The decline was sharper in senior leadership hiring, which dropped 82 percent in the same period, according to a report on ‘Latest Employment Trends in Start-ups’ by CIEL Works, the research and analysis wing of HR firm CIEL.
The study found that 64 percent of startup employees were willing to move to a “stable” job. Of them, 47 percent cited job security as a concern, followed by the absence of work-life balance (27 percent) and better pay (26 percent).
The report is based on an analysis of 60,704 employees working in 60 startups in India. The data was collected using job portals.
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With startups facing turbulent times, attrition continued to be a major hurdle for them. Although attrition rates are high, the average median tenure in startups increased to 1.9 years vis-a-vis 1.7 years about six months ago. Average tenures in other sectors are much longer – ITES (5.8 years), FMCG (4.1 years) and MSME manufacturing (3.6 years).
With funding drying up, startups, including the most well-funded, laid off almost 20,000 employees last year, according to data compiled by Moneycontrol.
“India continues to be the frontrunner of the startup ecosystem despite the current threatening economic uncertainties. This downfall is only for a transient period, it will push the startups to be more serious in their overall operations and set new thresholds,” said Aditya Narayan Mishra, MD of CIEL HR Services.
WFH waning
The report highlighted that startups discourage remote working and almost all their job openings were in-office roles. In the past six months, work-from-office roles rose from 85 percent of the vacancies to 94 percent.
Gender diversity at startups across levels is yet to grow, according to the study. Women’s representation is at 24 percent among startups, with 11 percent representation in leadership positions.
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“Lack of flexibility, shift away from remote working culture, and inadequate support for childcare and eldercare needs continue to be hindrances for women to sustain and progress in the startup ecosystem,” the report said.
Bengaluru remains the hottest destination for startup talent, with 31 percent of the job openings in this region. The National Capital Region was second with 22 percent of the total job opportunities.
Tier 1 cities accounted for 94 percent of the total job openings while tier 2 and tier 3 locations accounted for only 6 percent.
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