No more joining bonuses as tech start-ups and e-commerce companies face lack of funds
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This also means that these companies, known to hire talents at high costs, have to tighten their moneybags and cut back on joining bonuses.
"Joining bonuses, used to lure quality talent fast, are being offered to about 10% of the staff now from 30%-40% a year ago," Anshuman Das, managing partner at executive search firm Longhouse Consulting, told ET. "Earlier, it could have been about 15% of the CTC (cost to company, or total money an employer spent on an employee including all benefits in a year), but now it has come down to about 6-7%," he said.
"Companies are waiting and operating on budget optimisation principles," Das added.
The list of companies shying away from huge bonuses includes names like Flipkart, Ola, Snapdeal, Uber, and Quikr, all of whom are now willing to link pay to performance.
Experts opine that the pressure on e-commerce companies is also because of investors’ increased focus on profitability.
However, this is said to be a demand supply mechanism. "Companies will still pay a premium and joining bonuses for certain skills and roles like digital marketing or good product managers," said Narayan R Thammaiah, chief people officer at Accel Partners.
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