Early-stage startups keen on hiring for mid and junior roles: FICCI-Randstad survey

• Startups that have secured Series A and Series B funding are well-capitalised and are actively seeking to hire new talent, says a report by FICCI and Randstad.
  
• Approximately 38% indicated that they intend to recruit more junior-level employees, while 27% plan to focus on mid-level hiring.
  
• The sectors that will be most active will be aerospace & defence, energy, and healthcare startups, which are expected to increase their hiring by over 30%.

Even as the season of layoffs continues unabated, a survey by industry body FICCI and HR services firm Randstad India says that early-stage startups are keen on hiring. About 80% of the early-stage startups – those with a current workforce of fewer than 20 employees – are actively seeking to expand their workforce in 2023, the survey said.

“Notably, these startups have secured Series A and Series B funding, are well-capitalised, and are actively seeking to hire new talent,” the report said. As many as 300 startups participated in the survey.

However, there is another caveat – 92% of the startups surveyed said that their hiring decisions will primarily be driven by new project orders, additional funding raised from investors and expansion strategies.

Most of these jobs will be at junior and mid-levels, the study says – approximately 38% indicated that they intend to recruit junior-level employees, while 27% plan to focus on mid-level hiring. The exceptions are agri/agritech and automotive sectors, which will focus more on senior-level C-suite hiring.

The sectors that will be most active will be aerospace & defence, energy, and healthcare startups, which are expected to increase their hiring by over 30%. Next come agri/agritech, AI/ML/deeptech, automotive, and e-commerce/delivery services, which are expected to increase hiring by 11-20%.

“Every large corporation once started as an early-stage company and navigated its way through several challenges to reach where they are today. The Indian startup ecosystem will be a significant contributor to India’s economic growth over the next few years. These startups will eventually go on to create unique employment opportunities and career paths,” said Viswanath PS, MD & CEO, Randstad India.

Most of the surveyed startups (57.76%) are keen on hiring for permanent job roles, while 42% said they were looking to hire temporary and gig workers.

Attrition, layoffs & job insecurity

Startups have been hit hard by layoffs since the funding winter that set in during the second half of 2022. In the last couple of quarters, funding activity has slowed down by as much as 80%, and startups find their spending power to retain their people severely restrained, the report said.

Startups like Byju’s, Udaan, Oyo, Meesho, Swiggy, Dunzo and more have been laying off employees in the last few quarters. On the other hand, startups also face high attrition rates, due to the job insecurity that comes with working in a startup, which has only risen due to large-scale layoffs.

According to estimates by Analytics India Attrition Study 2022, high-growth startup companies face a high attrition rate of 43.7 % – which is about 1.7x that of typical organisations – despite better pay packages and growth opportunities.

“In our survey, 54.38 % of the startups attributed the high attrition rate to better pay packages by bigger corporates and fear of job security in a startup — besides lack of clarity in career progression clarity and credibility issues,” the FICCI survey said.

Startups also face hiring challenges like deficit in requisite skills, mismatches in salary expectations and a reluctance among potential candidates to join a startup due to concerns over risk perception, the survey added.

To combat these issues, startups are using employee stock options or ESOPs as a retention tool. And, 41.5% of surveyed startups said they already offer them to their employees.

SEE ALSO

Amid layoff doom, hiring outlook remains strong for blue-collar jobs in manufacturing and services: TeamLease