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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