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Despite odds, startups scout for right talent
Majority of startups rightsizing their employee pyramid in anticipation of funding slowdown and uncertain business prospects this year
Demand Intact
- Visible margin pressure on startups
- Startups focusing on trimming losses
- Funding support declining
- However, demand for talent remains strong
Bengaluru: Startups in India are likely to continue hiring top talent at attractive salaries despite some of these new companies rightsizing their employee pyramid in anticipation of funding slowdown and uncertain business prospects this year. HR experts dealing with many established startups said that the demand for talent remained strong as of now though employees and employers were more realistic in their approaches.
"We have not seen any slowdown in demand for talent. It remains equally strong. What has happened is that now employees are more realistic in their expectations. Similarly, the aggressive chase for top talent through counteroffers that leads to rise in compensation is also coming down," Aditya Narayan Mishra, Director, and CEO of CIEL HR Services told BizzBuzz.
In anticipation of funding slowdown, some of the startups laid off employees in the recent months. Edtech startup Unacademy laid off around 1,000 employees, including on-roll and contractual staff last month. Similarly, ecommerce firm Meesho laid off around 150 employees due to restructuring of its grocery business. Similarly, lifestyle and shopping app Trell reportedly fired more than hundred employees in recent months.
"There is a visible pressure on startups to be profitable by reducing losses as willingness to fund loss-making startups has come down. However, demand for talent remains strong. This (slowdown in talent) may come up with a lag," said V Balakrishnan, Cofounder & Chairman of VC firm, Exfinity Venture Partners and former Chief Financial Officer & board member of Infosys told the Bizz Buzz.
India has the third largest startup ecosystem in the world with 100 unicorns. Unicorns are those privately-held companies with a valuation of more than one billion dollar. However, out of these 100 unicorns, only 23 are profit-making, while the rest are still burning cash to drive the growth.
New age companies like Zoho. Zerodha, Lenskart, Mamaearth, CoinSwitch, Nykaa, FirstCry, BillDesk, and Postman among others are those startups that are profitable among the unicorns. Startups like OYO, PhonePe, Paytm, Flipkart, Udaan, Eruditus, Swiggy, Unacademy, and ShareChat among others remain in the list of loss-making unicorns.
As the fund flow to Indian startups is tightening, many startups are rightsizing their employee pyramid by exiting loss-making activities to reduce the cash burn. However, experts opined that despite rationalisation, demand for talent would remain strong as startups chased new revenue streams.
We have not seen any slowdown in demand for talent. It remains equally strong. What has happened is that now employees are more realistic in their expectations. Similarly, the aggressive chase for top talent through counteroffers that leads to rise in compensation is also coming down
- Aditya Narayan Mishra, Director and CEO, CIEL HR Services
