A significant percentage of early-stage startups are looking to increase their workforce this year, primarily driven by new project orders, additional funding raised from investors and expansion strategies, says a survey.
According to the FICCI Randstad Startup Hiring Trends Survey, 80.49% of the total startups surveyed stated that they plan to increase their manpower hiring in 2023, while 15.78% plan to maintain their existing headcount, majority being early-stage.
Over 300 startups participated in the survey.
“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,” said Viswanath PS, Managing Director MD and CEO, Randstad India.
Around 80% 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 actively seeking to hire new talent, the survey said.
“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,” said Rohit Bansal, Chairman – FICCI Startup Committee.
Overall, sectors depicting the highest intent to hire include healthcare (13%), IT/ITes (10%), agri or agritech (8%), AI/ML/deeptech (7%), fintech (7%) and manufacturing (7%).
The survey further indicates that 54.38% of startups attribute the high attrition rate in the industry to factors like 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.
In terms of hiring challenges faced by startups, the primary factors include a deficit in requisite skills, mismatches in salary expectations, and a reluctance among potential candidates to join a startup due to concerns over risk perception.
