Indian startups cooled off on hiring new permanent employees by 61 percent in the last 12 months - a time when the startup street stayed roiled with layoffs triggered by a funding winter. The dip in hiring loomed across senior-level positions, especially for chief experience officers (CXO), dropping by 93 percent since October 2021, according to RazorpayX’s report on insights from its payroll management offering.
In a statement on October 31, Razorpay said that meanwhile startups are increasing payouts to existing employees. Payments to gig workers have also seen a growth of over 150 percent since October 2021. The report highlighted that many companies have begun hiring a gig workforce over their permanent employees as well.
Razorpay said that the findings of the report are from the analysis of payroll data from October 2021 to September 2022 of over 25,000 employees across over 1000 Indian startups from more than 20 sectors that use RazorpayX Payroll.
“The data from RazorpayX Payroll indicates that startups have been optimising their workforce by building leaner yet stronger teams, keeping in mind the macro-forces. Moreover, compensating their existing employees for their contribution towards building sustainable runways, in the long run, shows that companies have been looking inwards, alongside the increasing adoption of giggers,” said Shashank Mehta, Vice President and Head of RazorpayX.
RazorpayX is the neobanking arm of Tiger Global and Sequoia-backed fintech Razorpay. It offers current account, payroll management, corporate credit cards, vendor payments, and so on RazorpayX’s customers include startups and other small and medium businesses.
According to the report, salary spending for companies has increased by 64.7 percent since October 2021. However, unlike previous trends, salaries across different salary levels have been rising at an average of 12 percent.
The report also revealed that the rise in salaries is not distributed evenly across genders. While salaries for both males and females grew gradually, growth in salaries earned by males was higher at 29 percent as compared to 22 percent for females.
While the median salary gap between men and women was 46 percent in the last year, the salary gap between the two genders in the 95th percentile salary bracket was a whopping 70 percent, said the report.
This salary gap is accompanied by lower participation of women in the workforce - for every two men that were hired in the last year, one woman was hired.
“The existing gender gap in workforce ratio and pay remains a challenge every startup needs to counter on priority. It is only through equitable participation and pay can we make our workforce truly productive in every sense,” he added.
Hiring in technology seems unfazed with tech jobs slightly increasing their contribution to the overall workforce by 4 percent.
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