Even as layoffs continue to pile up among Indian startups, hiring by the country’s startups fell by 44% during October-December 2022 period compared with the January-March quarter, a CIEL HR Services monthly forecast study reveals. The report titled Latest Employment Trends in Start-Ups comes in the wake of the “funding winter” in the sector, with a lack of capital availability.
Startups also saw a high level of attrition as startup employees preferred stable jobs, higher pay and a better work-life balance, the study noted.
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Of the startup employees surveyed, over 64% wanted to move to a stable job, 47% stated job security as a reason to move to another job, and these were followed by 27% saying they had no work-life balance and 26% seeking better pay in established companies.
Despite high attrition rates, the average median tenure increased to 1.9 years in startups as compared to 1.7 years six months ago. However, it is still not at par with other sectors like ITES (5.8 years), FMCG (4.1 years) and MSME manufacturing (3.6 years), the study stated.
For this study, responses came from 60,704 employees across 60 startups operating in India.
“India continues to be the front-runner of the startup ecosystem despite the current threatening economic uncertainties. This downfall is only for a transient period, it will push the startups to be more serious in their overall operations and set new thresholds. In this context, we see startups preferring onsite work, with 94% of job openings looking for ‘work from office’,” CIEL HR Services Managing Director and CEO Aditya Narayan Mishra, said. He also said that startups are looking for highly productive and skilled talent who can adapt quickly to changes and stay ahead of the curve.
The study further revealed that gender diversity in startups across levels is low, with an overall 24% women representation and a negligible 11% in leadership positions. Bengaluru continues to be a hot destination for startup talent, with 31% of the job openings in this region, according to the study.
Interestingly, Delhi/NCR is a very close second with 22% of the total job opportunities in startups, it stated. Out of the total job openings, tier I cities accounted for around 94% of the jobs, while tier II and III locations accounted for only 6% of the total employment opportunities, it added.
Meanwhile, mass layoffs continue in the global startup ecosystem, with at least 104 technology companies laying off over 26,000 employees in the first few weeks of January, according to layoffs tracking site layoffs.fyi. This means that over 1,600 tech employees were laid off per day on average in 2023 so far, globally, including in India.
Indian startups, including Dunzo, Sharechat, Rebel Foods, Captain Fresh, BharatAgri, Ola, DeHaat, Skit.ai, Coin DCX, LEAD School, Bounce, Cashfree, and Swiggy laid off several hundred employees in the first few weeks of January.