Indian Startups Are Employing Changes In The Hiring Pattern

Previously, the Indian economy witnessed a startup boom, and now it seems that the startups are having a tough time maintaining their growth. Recent reports indicate that in order to maintain the growth, most Indian startups are engaging in steep hiring cuts along with a dent in the hiring of permanent employees. In fact, the dip is as high as 61%. According to reports by RazorpayX Payroll, the hiring for CXO or chief experience officer witnessed a massive fall of 93% since October 2021. This report indicates that the startup ecosystem is currently experiencing changes in the hiring pattern. 

The Change In The Hiring Pattern In The Indian Start-Up Ecosystem

Even though the overall hiring has reduced in the startups, the salary for the existing full-time employees has increased. The salary increase of the current full-time employees is close to 64.7%. However, this salary increase is unevenly distributed, just like the uneven distribution of the prize money of Dhankesari and Lottery Sambad. A stark difference is visible across gender functioning in the top gender bracket. 

Even though the change in the hiring pattern presents a grim situation at first look, it is not the case. In fact, with the hiring cut, startups are trying to make themselves resilient and more suitable for the current market that is changing drastically. Furthermore, it indicates that Indian startups are focusing on building a leaner workforce that is strong. 

The Impact Of Hiring Pattern Change 

The change in the hiring pattern is visible across all the departments. However, technology-related jobs experienced the most negligible impact of this hiring pattern change. In fact, there is a marginal increase of 4% in technology-related jobs in the overall workforce. However, it is merely 4%, indicating that the hiring trend is slowing down even for tech people. 

Currently, Indian startups are not going big on hiring permanent employees. It is good news for the gig workers who are now getting more preferences from the startups. Since October 2021, the gig workers’ payments saw a growth of a massive 153%. The popularity of gig workers is also visible in that 15% of enterprises have shifted to the semi-gig workforce model. 

There is also a difference in the contribution of different gig workers. For instance, semi-skilled gig workers who generally earn less than INR 20,000 are the most significant contributor to the gig workers pool. The highest growth amongst the gig workers is that of the skilled gig workers who earn anywhere between INR 85,000 to 1,50,000. Interestingly, they contribute least to the overall pool of gig workers. 

Gender-Gap Payments

As discussed above, the salaries are not equally distributed amongst the different gender. However, at the same time, both males and females have experienced gradual growth. The salary growth amongst males is 29% and 22% for females. This salary gap, however, increases as one gets promoted to a higher position. 

In 2020-21, the salary gap between men and women was 46%. Sadly, this has increased to 70% in the current year. Furthermore, the work participation rate of women is suffering too. Only one woman was hired for every two men in the last year. The gender gap in the workforce ratio is a serious issue that needs to be solved. 

Why The Change In The Hiring Pattern?

At present, the funding winter has hit Indian startups strongly. Previously, during the IPO and startup boom in the country, many startups engaged in the rapid hiring of employees. Now, the layoff cycle is at work. However, it is a temporary hiccup for Indian startups and is not bad. 

At present, the market is changing dynamically because of global inflation, the after-effect of the pandemic, and the Russia-Ukraine war. In India, 39 startups laid off 12,058 workers. However, this grim picture is not exclusive to India. Even the startup ecosystem of the United States is following a similar trend. Once the external factors currently governing the market subside, the startup funding shortage will be fixed too. 

When the startups received considerable funds in the previous year, they mostly used it in aggressive hiring. It resulted in a massive cash burn, and further, the inefficiency in the workforce saw an increase. Now, the startups are focusing on using the funds more efficiently to restructure teams, consolidate, and streamline operations. 

Also Read: Culture At A Startup: Why It Matters And How To Build It