Start-ups reduce hiring; permanent workers fell by 61%: Report

Start-ups reduce hiring; permanent workers fell by 61%: Report

Hiring of new permanent employees dipped 61% since Oct 2021

  • Hiring dip across seniority with CXO hiring seeing 93% cut
  • Payments to gig workers have risen 153%
  • No of enterprises that have shifted to a semi-gig workforce model have gone up 15%
  • Gig workers who earn Rs 85,000-150,000 per month have increased 62%
  • Gig workers earning more than Rs 150,000 grew 69
  • While overall hiring has decreased, salary spends have increased by 64.7%
  • Salaries are rising, but not distributed evenly across genders; growth in salaries earned by men is higher at 29% compared to 22% for women

As hiring of permanent employees has dipped by a significant 61 per cent in the last 12 months in  Indian startups, they are  are going through steep hiring cuts , revelas a RazorpayX , a fintech firm report.

The hiring for chief experience officer (CXO) has decreased by a massive 93 per cent since October 2021.

While hiring across departments has decreased, hiring in technology seems to have been least impacted. Technology-related jobs have managed to marginally increase their contribution to the overall workforce by 4 per cent, while the hiring trend is slowing down in general.

Also read: Vootapalli Ramanaprasad joins Novotel Kolkata as Director – Talent and Culture

“The data from RazorpayX Payroll indicates that start-ups have been optimising their workforce by building leaner yet stronger teams, keeping in mind the macro-forces,” said Shashank Mehta, vice-president and head, RazorpayX. “Moreover, compensating their existing employees for their contribution towards building sustainable runways in the long run shows that companies have been looking inwards, alongside the increasing adoption of giggers.”

Indeed, while hiring permanent employees has seen a fall, gig workers seem to be the preferred option for start-ups. Payments to gig workers have grown 153 per cent since October 2021. The total number of enterprises that have shifted to a semi-gig workforce model has increased by 15 per cent.

Semi-skilled gig workers, who are paid less than Rs 20,000 per month, have the highest contribution to the pool of gig workers being hired by start-ups, followed by those who earn Rs 20,000-40,000. But these sets of workers are among the slowest growing cohorts — at 26 per cent and 52 per cent respectively.

However, skilled gig workers who earn from Rs 85,000 to Rs 150,000, despite contributing the least to the overall pool, have seen the highest growth (62 per cent). Gig workers who earn more than Rs 150,000 grew by 69 per cent in the last one year, suggesting they are gaining precedence among startups over hiring full-time employees.

While overall hiring has decreased, salary spends have increased by 64.7 per cent.

Contrary to previous trends, salaries across different levels have been rising gradually but not exponentially, at an average of 12 per cent. However, salary growth is very different across scales of gig workers. While the median salaries of such workers have increased by only 19.9 per cent, salaries in the 99th percentile of gig workers grew by 58.3 per cent.

There is no parity of salary distribution across genders. The growth in salaries for men is higher at 29 per cent, compared to 22 per cent for women. Moreover, salary gaps have widened, the report added. While the median salary gap between men and women was 46 per cent in the last one year, the salary gap between the two genders in the 95th percentile salary bracket was 70 per cent. This salary gap is accompanied with a lower participation of women in the workforce — one woman was hired for every two men who were recruited in the last one year.

The survey analysed payroll data from October 2021 to September 2022 of 25,000 employees across 1,000 Indian startups and 20 sectors.

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