FICCI–Randstad hiring survey: Early-stage startups look to increase workforce in 2023

The survey highlights that 80 percent of early-stage startups — those with a strength 20 employees or fewer — are actively seeking to expand their workforce in 2023. The report also pointed out that these startups have secured Series A and Series B funding, are well-capitalised, and actively seeking to hire new talent.

According to the report, 92 percent of these startups said their hiring decisions will primarily be driven by new project orders, additional funding raised from investors and expansion strategies.

Sectors like agri/agritech, AI/ML/DeepTech, automotive, and e-commerce/delivery services are expected to increase hiring in the 11-20 percent range, while aerospace and defense, energy, and healthcare startups look to increase hiring activities by over 30 percent. Among the sectors with the highest intent to hire were healthcare, IT/ITeS, agri/agritech, AI/ML/DeepTech, fintech, and manufacturing.

As indicated by multiple surveys, hiring will primarily occur at the junior and mid-levels. Nearly 28 percent of startups surveyed by FICCI–Randstad said they intend to recruit more junior-level employees, while 27.27 percent 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.

As per the survey, over 57 percent of startups are looking for permanent recruits, while about 42 percent want to hire temporary and gig workers.

The survey also found that Hyderabad and Pune are emerging as the frontrunners in senior-level hiring, while mid-level hiring is expected to be prominent across cities such as Kolkata, Bengaluru, Mumbai, Chennai, Pune, and Delhi/NCR.

In terms of campus placements, a majority of startups, (67.55 percent) 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 percent) of startups are opting for premier institutions such as IITs and IIMs for their campus placements.

The report said 54.38 percent if startups attribute high attrition rate 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, it added.

Further, over 57 percent of the surveyed startups believe that ESOPs (Employee Stock Option Plans) have the potential to serve as an effective instrument for retaining employees. Meanwhile, 41.49 percent of startups have already implemented ESOPs as a retention strategy.

The report also sheds light on hiring challenges that startups face — deficit in requisite skills, mismatches in salary expectations, and a 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 and Titan Capital, said, “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.”