Indian startups are paying nearly double salary increments to retain talent as compared to the overall industry.
Indian startups are paying nearly double salary increments to retain talent as compared to the overall industry. According to global professional services firm Aon’s India Salary Increase Survey 2021-22, salary increment in startups is being projected to grow from an actual average of 15.7 per cent in 2021 to a projected average of 16.9 per cent in 2022. On the contrary, findings in the latest Salary Increase Survey in India showed that in the overall industry, salary hike will grow to a projected average of 9.4 per cent by next year, from actual 8.8 per cent in 2021. Similarly, the survey showed that 14.7 per cent of employees got promoted in startups against 11.6 per cent in the overall industry.
Even as startups score better than the overall industry in terms of salary hikes and promotion, the rate of attrition is also higher in the startups. In 2021, the rate of attrition in startups stood at 23.6 per cent, as against 20 per cent in the overall industry. The survey highlighted that variable pay was 11.4 per cent of the total fixed pay in startups in 2021, as compared to 11.8 per cent in the overall industry.
On the performance front, the aggressive performance culture in new age organisations was driving a left skew in the curve. In the overall industry, more than half (52.8 per cent) of the employees meet expectations, and nearly 28 per cent often exceed expectations. While in startups, 55.3 per cent of employees exceed expectations, and 38 per cent meet expectations. Also, more than double employees far exceed expectations in the overall industry, as compared to startups.
Another interesting thing that this survey showed was 7.3 per cent of employees often didn’t meet expectations in the overall industry, while just 2.5 per cent in startups were often unable to meet the expectations. While not even a single employee working in a startup fell in the category of ‘did not meet expectations’, as against 2.5 per cent in the overall industry.