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Inequity in tech hiring: The big pay-cheque culture could soon put Indian startups in a tight spot

India is witnessing a startup funding boom and many firms are flushed with money but booms and busts usually happen in a cycle. A startup founder explains why standard sustainable hiring practices are imperative to ride through ups and downs in a stable manner.

June 06, 2021 / 12:51 PM IST
Representative image

Representative image

Issues related to hiring and human resource management in the technology sector have been generating quite a lot of buzz of late on social media, founder forums and the like. A recent article in Moneycontrol, which highlighted the case of a 32-year-old tech professional in India bagging a Rs 2-crore pay cheque, the equivalent of a typical Silicon Valley Startup salary, underscored the growing inequities in access to tech talent in the country.

The situation, however, is far from black and white. On the one hand, you have startups kitted out with new funding, paying freshers and young engineers three times more than the market standard. On the other hand, you have employment numbers in a free fall. We witness writers, designers, lawyers, and freelancers from different fields constantly calling out on social media for employment opportunities. What we need is a systemic approach to creating sustainable hiring and employment practices in the tech sector.

First, we need to address the startup funding boom. The year 2020-21 certainly feels like the decade of the Indian startups, going from record new companies being formed to building from India for the world, or from India for India. While it's exciting and heartening to see all the progress, one can't ignore the unsustainable hiring practices of young companies. What happens to your company when you've spent all your VC money on 2-3x market rate for the early employees you hire? What happens to your employees who are left without a job at the end of that cycle and with a salary expectation wildly above market standards for their experience? Booms and busts happen in a cycle. This is why following standard sustainable hiring practices allows you to ride through both in a stable manner, with eyes on continuous long-term growth. There are and will always be edge cases to this. Companies growing at an exponential pace will need to do what it takes to acquire talent rapidly, at any cost, where the math works out long term thanks to how sound the business is.

Also read: Zerodha co-founders Nithin and Nikhil Kamath to get Rs 100 crore annual salary

Talent crunch

Second, tech startups need talent for marketing, sales, products, operations, finance, creative disciplines and more. In India, there is a severe glut in many of these non-engineering, non-programming, humanities-centric skills. To fuel rapid growth, startups can double down on hiring these skill sets from a variety of other fields including journalism, consulting and the professional services industries, where the downside is that the talent available is plenty but often not centred around modern technology. On the upside, this talent comes with fantastic domain knowledge. Startups are likely to find people with excellent experience and knowledge in insurance, finance, real estate, law and many more fields. Young companies should actively look to hire from this pool that is typically paid much below the market rate in the tech sector.

Also read: Startups pay record salaries to all talent amid funding boom

Third, young companies should be relentless in creating training programmes that allow the talent described above to get onboarded into the tech industry. This creates a snowball effect. Once you've cracked hiring from a set of non-traditional domains and their transition into tech, you are tapping into an entirely new pool of talent that is largely undiscovered and underpaid, with the upskilling trump card.

Be diverse, inclusive 

Fourth, focus on diversity and inclusion. Women are leaving the workforce at alarming numbers. The tech sector is notorious for its anti-women and anti-LGBTQ culture. One could extend this argument to an extreme to say it's pro-men for the most part. If you are a startup and you disagree with these comments, perhaps you can focus on the lack-of-talent-access problem you are facing and acknowledge the large pool of 'resources' we have in the country, in women and LGBTQ communities. Create programmes that require hiring women back to work after long maternity breaks. Create programmes focused on requiring mandatory diversity in hiring. Diversity and merit are not mutually exclusive. There are plenty of women and LGBTQ folks in the country who are highly skilled and with the right toolkit, upskilling and programmes can grow the tech-enabled talent pool in the country.

Also read: Zerodha founders’ salary: Let’s cut through the noise

When hiring, cast the net wide

Last but not the least, IITs and IIMs are not the only talent beds in our country. As a founder, I came back to Chennai from San Francisco in the last decade, seeking the talent bed, that is Tamil Nadu. From Coimbatore to Madurai to Chennai, we've built a world-class team of AI experts at MadStreetDen, fast expanding into Bangalore, Mumbai, Pune and many other cities. You can too if you focus on hiring and upskilling freshers from across the country. I would go a tad bit far with this argument to state that sometimes, this in itself, is an advantage to young startups. Companies such as TCS, Freshworks and many others have created long-lasting playbooks with this approach. As founders, we all share the responsibility of growing talent and growing with talent, creating sustainable talent ecosystems in the countries where we operate.

The issue we face today is not as much an issue of rising salaries for coders, as much as an issue of inequities in opportunities for young talent to upskill, grow and be a relevant and significant part of the tech ecosystem.

(The author is the founder & CEO of Mad Street Den, a computer vision and artificial intelligence company. Ashwini returned to India from Silicon Valley after more than a decade to bootstrap her startup that she founded with her husband, Anand Chandrasekaran, a neuroscientist. )
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Ashwini Asokan
first published: Jun 6, 2021 12:50 pm