Indian startups have trimmed their quota of hiring permanent employees and top-level management sharply through last year, as a funding winter has forced some companies to cut costs and also show the door to select employees.
Hiring of CXOs plunged by 93% and new permanent employees have dropped by 61% as compared to October 2021, a report by RazorpayX Payroll said. RazorpayX, the business banking platform of fintech unicorn Razorpay, has over 30,000 businesses on its platform.
The report analyzed payroll data of over 25,000 employees across 1,000+ Indian startups from 20+ sectors who currently use RazorpayX Payroll between from October 2021 to September 2022.
Decoding hiring trends in a year that saw almost 12,000 personnel getting pink slips across the startup ecosystem, the report stated that technology-related fields have been mostly immune. Even as hiring slowed down across the industry, technology related jobs increased their contribution to the overall workforce by 4%.
However, more startups and enterprises are employing more temporary workers. About 15% more enterprises shifted to a semi-gig workforce model, the report said.
Payments to gig-workers grew by 153% since October 2021.
Hiring of semi-skilled gig workers, who are paid less than Rs 20,000 per month grew by 26%. This cohort has the highest contribution to the pool of gig workers hired by startups, followed by workers earning anywhere between Rs 20,000-40,000. The hiring in this category grew by 52%.
The highest growth in hiring was in the cohort of skilled gig workers, which contribute the least to the overall pool. Gig workers who earn between Rs 85,000-1.5 lakh have grown by 62%, while gig-workers who earn more than Rs 1.5 lakh grew by 69% in the last one year, according to the report.
Even as the hiring trend is slowing down, startups are improving the payouts to their existing employees, with salary spends increasing by 64.7% since October 2021. Salary levels rose at an average of 12%, according to the data.
“The data from RazorpayX Payroll indicates that companies have been looking inwards (compensating their existing employees), alongside the increasing adoption of giggers,” Shashank Mehta, Vice President and Head of RazorpayX said.
This increase, however, is not equitable across scales of gig workers and genders. High earning gig-workers' payouts increased more than a median salary in the last year. Salaries grew across both genders. However, growth in salaries earned by males is higher at 29% as compared to 22% by women.
Salary gaps seem to get wider, the higher one goes up the salary bracket.
“While the median salary gap between men and women was 46% in the last one year, the salary gap between the two genders in the 95th percentile salary bracket was a whopping 70%,” the report said.