According to a survey conducted by professional services firm Aon, one in four new offers made by new-age companies was rejected by candidates in the last half of 2021, extending to January this year. The survey, which was wrapped up last month, covered about 700 new-age companies in IT, ecommerce and startup domains.
Attracting and retaining talent has become a significant challenge, especially in the last two quarters as about 100 new-age companies are facing as high as 40% rejection rate by candidates.
According to the survey, as the war for talent intensifies, more and more firms are reaching out to candidates who are serving notice period. “This is a relatively safer bet for companies looking at hiring new-age talent as these candidates are left with lesser time to search for better offers while serving notice period,” said Roopank Chaudhary, partner, Aon.
“Unthinkable hikes” are making it difficult for companies to attract and retain tech and digital talent, said Upgrad cofounder Mayank Kumar. “Retention approach is a mix of career growth opportunities, quality of work, ESOPs or retention bonuses,” said Kumar.
Close to 20% of the companies surveyed are trying to lure candidates with joining bonuses, while 19% are offering to match or exceed counteroffers. The remaining companies are relying on the good old referral-based hiring, increasing the compensation ranges or are sweetening the offers with a higher equity component.
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Counteroffers are the most sought-after tool to retain talent as a third of candidates looking out are retained by their employers, according to Aon. “But in some cases, an altogether new competitor/company is trying to poach the candidate who is in negotiations with another company,” said Chaudhary.
“This is an environment where there is a huge stress on supply chain, and demand-supply mismatches are driving a lot of that escalation in direct costs and cost of wages,” Mphasis chief executive Nitin Rakesh said. Mphasis is also working on skilling employees and building a hybrid workplace culture to retain and attract talent.
The average increment given on top of a counteroffer is 10-20%, according to the Aon survey.
Rapid digital adoption and a more-than-ever dependence on technology by businesses across sectors, especially during the pandemic, have pushed the demand for digital and technology talent through the roof.
As a result, most technology companies are expanding their presence on campuses, including engineering and management schools, to catch young talent. As reported earlier by ET, companies like Amazon, Flipkart, Tata Consultancy Services, Wipro, Infosys, Mphasis, Mindtree and HCL Technologies are hiring in a big way from campuses this year.
Many are also going beyond the metros and large cities for hiring. Over the last two quarters, Tech Mahindra has added more than 8,000 employees from tier-2 cities like Thiruvananthapuram, Vizag, Nagpur and Bhubaneswar, said its global chief people officer, Harshvendra Soin.
According to experts, upskilling is also one of the answers to the problem in the long run. But as it will take time to build these skills, there is immense pressure on the talent supply side.
“In the short run, as companies return to full force working and want to ramp up quickly, they find it easier to buy talent. Covid has disrupted the business models and accentuated the need for digital and tech skills,” said Chaudhary of Aon.
