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Almost 80% of early-stage startups plan to hire in 2023: Survey

Interestingly, while over 57 percent of startups are looking for permanent recruits, about 43 percent plan to hire temporary and gig workers.

March 28, 2023 / 05:34 PM IST
Representative Image.

Representative Image.

About 80 percent of early-stage startups, with a workforce of fewer than 20 employees, are actively seeking to hire in 2023, at a time when startups and big tech companies continue to lay off in large numbers.

Interestingly, while over 57 percent of startups are looking for permanent recruits, about 43 percent plan to hire temporary and gig workers.

The Federation of Indian Chambers of Commerce and Industry (FICCI) and HR (human resource) services company Randstad India have launched their survey on startup hiring trends in which over 300 startups participated.

Also Read: Jobs: It’s not all gloom and doom; these Indian start-ups are hiring

In a statement, FICCI also said startups that have secured Series A and Series B funding are well-capitalised and are actively seeking to hire new talent. According to the survey, about 92 percent of them stated that their hiring decisions will primarily be driven by new project orders, additional funding raised from investors, and expansion strategies.

“Startups create a large range of jobs as they grow and mature. As this report highlights, the initial opportunities arise as founders onboard the early team to help establish the business. 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,” said Rohit Bansal, chairman of FICCI Startup Committee. Bansal is also the co-founder, AceVector Group and Titan Capital.

Also Read: Microsoft-owned GitHub lays off over 140 employees in India

The survey added that junior and mid-level employees are more likely to get hired. Approximately 38 percent of startups, in the survey, have said that they intend to recruit more junior-level employees, while 27 percent of respondents are planning to focus on mid-level hiring.

Agriculture, agritech, and automotive sectors, however, will focus more on senior-level C-suite hiring, as per the report.

In senior-level hiring, Hyderabad and Pune are emerging as the frontrunners reflecting strong intent among startups in these regions, as per the survey. The report highlighted that middle-level hiring is expected to be prominent across cities such as Kolkata, Bengaluru, Mumbai, Chennai, Pune, and Delhi NCR.

The report also said that while startups are planning to expand their workforce, about 32 percent of startups anticipate an increase in hiring by over 30 percent. Other 28 percent of companies plan to expand their teams in the 11 to 20 percent range.

Where skills are concerned, data and analytics, software development, and engineering are in demand, and close to 70 percent of startups’ active demand centres around experienced talent in these skills. Translated to roles in demand, they include full-stack engineers, senior software engineers, product and program managers.

Hiring trends in sectors

While aerospace and defence, energy, and healthcare startups are expected to increase their hiring activities by over 30 percent, others like agritech, artificial intelligence (AI), machine learning (ML), deeptech, e-commerce, and delivery services are expected to increase hiring in the 11-20 percent range, said the survey findings.

Overall healthcare, information technology, and services, agritech, AI, ML, deeptech, fintech, and manufacturing are sectors with the highest intent to hire, as per the report.

Higher attrition and hiring challenges 

About 54 percent of startups in the survey said the high attrition rate in the industry is due to 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, companies said.

Also Read: 64% of startup employees ready to move to 'stable' job: Report

Startups also shared hiring challenges that included 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.

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Moneycontrol News
first published: Mar 28, 2023 05:34 pm