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Almost 80% Early-stage Startups Looking To Up Their Workforce In 2023: Survey
As per the survey, aerospace and defence, energy and healthcare startups are expected to increase their hiring activities by over 30 per cent
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Despite the current trend of layoffs among more giant corporations, about 80 per cent of early-stage startups (less than 20 employees) are actively seeking to expand their workforce in 2023, as per a survey by FICCI and Randstad India.
Notably, these startups have secured series A and series B funding, are well-capitalised and are actively seeking to hire new talent, the startup hiring trends survey revealed.
"About 92 per cent of these startups stated that their hiring decisions will primarily be driven by new project orders, additional funding raised from investors and expansion strategies," it added.
While startups are planning to expand their workforce, a substantial portion- 31.92 per cent anticipate an increase in hiring by over 30 per cent. 28.08 per cent of companies plan to expand their teams in the 11-20 per cent range.
Sectors like agri, agritech, AI/ML, automotive and e-commerce services are expected to increase hiring in the 11-20 per cent range. In contrast, aerospace and defence, energy and healthcare startups are expected to increase their hiring activities by over 30 per cent.
The study also stated that hiring will primarily occur at the junior and mid-levels.
Approximately 37.97 per cent of startups have indicated that they intend to recruit more junior-level employees, while 27.27 per cent of respondents are planning to focus on mid-level hiring.
However, the agri/agritech and automotive sectors will focus more on senior-level C-suite hiring.
The survey further indicated that 54.38 per cent of startups attribute the high attrition rate in the industry to factors such as better pay packages offered by larger corporations, as well as concerns over job security in a startup.
It added that other factors contributing to attrition in startups include a lack of clarity around career progression and credibility.
Interestingly, 57.28 per cent of the surveyed startups believe that employee stock option pools (ESOPs) have the potential to serve as an effective instrument for retaining employees.
Furthermore, 41.49 per cent of surveyed startups have already implemented ESOPs as a retention strategy.
Rohit Bansal, Chairman, FICCI Startup Committee said, "Startups create a large range of jobs as they grow and mature. As this report highlights, the initial opportunities arise as founders onboard the early team to help establish the business. A multiplier impact on job creation is seen in the growth and expansion stage when operations expand, and various initiatives mature."
Bansal added that the dynamic working environment in startups provides the ideal training ground for aspiring entrepreneurs who then move on to create their own startups. This creates a virtuous cycle of growth, with each successive cohort adding jobs and enterprises.
He also stated that with their pan-India footprint, startups create jobs and economic opportunities beyond just the top cities and are key partners in India's growth story.
Viswanath PS, MD & CEO, Randstad India said, "Every large corporation once started as an early-stage company and navigated its way through several challenges to reach where they are today. It gives me immense pleasure to quote that startups are rapidly emerging as significant players in India's employment landscape."
With the emergence of several new-age innovative organisations across sectors, the Indian startup ecosystem will be a significant contributor to India's economic growth over the next few years, explained PS.
PS added, "More importantly, these startups will eventually go on to create unique employment opportunities and career paths, innovation and competitive dynamics in the world of work."