80% of early-stage startups are looking to increase their workforce in 2023: FICCI–Randstad Survey

80.49 per cent of the total startups surveyed stated that they plan to increase their manpower hiring in 2023, while 15.78 per cent plan to maintain their existing headcount, the majority being an early stage
80% of early-stage startups are looking to increase their workforce in 2023: FICCI–Randstad Survey

The Federation of Indian Chambers of Commerce and Industry (FICCI) in partnership with Randstad India, one of the leading organisations in the HR services industry, has launched their exclusive survey on startups workforce hiring trends. Over 300 startups participated in the survey.

Despite the current trend of layoffs among larger corporations, the survey highlights that a significant proportion (80 per cent) of early-stage startups, those with a current workforce of fewer than 20 employees, are actively seeking to expand their workforce in 2023. Notably, these startups have secured Series A and Series B funding, are well-capitalised, and are actively seeking to hire new talent. 92 per cent of these startups stated that their hiring decisions would primarily be driven by new project orders, additional funding raised from investors and expansion strategies.

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 Agriculture, Agritech, Artificial Intelligence, Machine Learning, DeepTech, Automotive, and e-Commerce/delivery services are expected to increase hiring in the 11-20 per cent range, while Aerospace & Defense, Energy, and Healthcare startups are expected to increase their hiring activities by over 30 per cent. Overall, sectors depicting the highest intent to hire include healthcare (13 per cent), IT/ITes (10 per cent), Agri/Agritech (8 per cent), AI/ML/DeepTech (7 per cent), Fintech (7 per cent) and Manufacturing (7 per cent).

The study also states 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 workforce, 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 indicates 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. 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 ESOPs (Employee Stock Option Pool) 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.

In terms of hiring challenges faced by startups, the primary factors include a deficit in requisite skills, mismatches in salary expectations and reluctance among potential candidates to join a startup due to concerns over risk perception.

Rohit Bansal, Chairman – FICCI Start-up Committee, and Co-founder, AceVector Group & Titan Capital 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. 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. 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.”

Presenting insights from the startup hiring trends survey, 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. 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.

“Randstad’s survey in association with FICCI reveals that the majority of early-stage startups are exhibiting strong hiring intentions, which is a testament to the strength of India’s diverse talent pool that’s available in the job market today. I believe these early-stage startups and their growth ambitions will fuel the next phase of India Inc.’s emergence as the world’s most attractive employment hub. I am confident that the Randstad-FICCI Start-Up Hiring Trends Survey will provide unique insights into the country’s evolving startup ecosystem, key trends and its immense contribution to socio-economic development and transformation,” Viswanath added.

Startup recruitment trends

Permanent vs Gig Workforce

  • 57.76 per cent of startups are looking for permanent recruits
  • 42.24 per cent are looking to hire temporary and gig workers

Geography in Focus

  • Hyderabad and Pune are emerging as the frontrunners in senior-level hiring, reflecting strong intent among startups in these regions.
  • Additionally, mid-level hiring is expected to be prominent across cities such as Kolkata, Bengaluru, Mumbai, Chennai, Pune and Delhi-NCR.
  • A considerable proportion of hiring activity across startups is expected to occur at the junior level, with Delhi-NCR, Bengaluru, Mumbai, and Hyderabad being the prominent cities in this category.

Qualifications in demand

  • 45.21 per cent of startups are looking to hire semi-skilled employees, while 41.49 per cent of startups are seeking highly skilled professionals.
  • In terms of campus placements, a majority of startups, (67.55 per cent) are focusing on private MBA and engineering colleges, as well as state universities, as these institutes offer quality talent at affordable salary packages.
  • Only a small proportion (9.16 per cent) of startups are opting for premier institutions such as IITs and IIMs for their campus placements.

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