Despite an approaching downturn in the record-breaking pace of investment, which is expected to lead to cost-cutting and layoffs at several renowned businesses such as Unacademy, Trell, and Lido Learning, founders, recruiting experts, and consultants say startups will continue to be attractive to job seekers.
According to industry insiders, astronomical raises to recruit talent will likely see a correction in the next quarters, but the sector will continue to attract professionals for its wealth generating potential, intellectual stimulation, and as a learning ground for prospective entrepreneurs.
“In the coming months, there will be a tempering of raises – it has already started in some areas such as HR, finance, and sales.” “However, when monetary pay, Esops, and incentives are added together, the overall earning potential is significantly bigger, which is a big lure,” said Ashwin Damera, CEO of edtech unicorn Eruditus.
According to Damera, more companies will revise costs in order to become more sustainable.
Investors would ask harsher questions about profitability, especially in businesses seeking Series C and D funding, he added.
Startups that have already collected a significant amount of money will continue to hire, but “wild wages” will be reduced to more reasonable levels, according to Ashish Sanganeria, senior partner at executive search firm Transearch.
“A certain percentage of talent for which there is a lot of competition will continue to command a premium but for others, there will be tempering. Employee costs have gone through the roof,” Sanganeria said.
The wealth creation opportunity and the sheer number of dollar millionaires that are minted when some of these startups make their public market debuts is not possible at that scale in traditional sectors, he added.
The startup ecosystem in India has felt the chill of lower stock prices of technology companies in the United States and a dip in valuations of those that went public in India last year.
Consistently escalating pay levels have a long-term impact on companies.
“There will be a natural cooling off over a period of time – we have had an overheated job market for some time now (particularly in certain skill segments), it is only normal to expect some easing of that market in the next 3-4 quarters,” said Anandorup Ghose, partner at Deloitte India.
Anuj Roy, managing partner at executive search firm Fidius Advisory, said the over-the-top pay increases will be over except in areas where there is a huge demand-supply mismatch. “But it won’t diminish the attractiveness given that this is a sector which is still offering the most,” Roy said.