Unacademy,
Trell and Lido Learning, startups will continue to remain attractive for jobseekers, said founders, hiring experts and consultants.
Industry insiders told ET that astronomical hikes to attract talent may likely see some correction in the coming quarters, but the sector itself will continue to draw professionals for its wealth creation opportunity, the intellectual stimulation it provides and for being a learning ground for aspiring entrepreneurs.
“There will be a tempering in hikes in coming months — it has already started in some areas like HR, finance and sales. However, overall cash compensation, Esops and incentives combined still give a far greater earning potential, and that is a big draw,” said Ashwin Damera, chief executive of edtech unicorn Eruditus.
More companies will revise costs to become sustainable, Damera said.
Investors, especially in startups looking to raise Series C and D rounds, will also ask tougher questions around profitability, he added.
Startups that have already
raised a fair bit of capital will continue to hire but the “crazy salaries” of the past will come down to more realistic levels, said Ashish Sanganeria, senior partner at executive search firm Transearch.
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“A certain percentage of talent for which there is a lot of competition will continue to command a premium but for others, there will be tempering. Employee costs have gone through the roof,” Sanganeria said.
The wealth creation opportunity and the sheer number of dollar millionaires that are minted when some of these startups make their public market debuts is not possible at that scale in traditional sectors, he added.
Last year was an aberration of sorts in terms of crazy valuations, said Chaitanya Ramalingegowda, co-founder of Wakefit.co.
Huge amounts of money went into increments and poaching, which will see some rationalisation in the coming months, he said. Deal cycles may take longer, valuations will be more practical, tougher questions will be asked on real data rather than vanity metrics, he added.
“But talent will still want to work in the sector,” Ramalingegowda said.
“Employee stock ownership plans (Esops) have proven to be wealth creation tools, rather than just paper money. Many want to become entrepreneurs and learn the ropes at startups… there is better learning here, more intellectual stimulation; ideas are executed faster.”
The startup ecosystem in India has felt the chill of lower stock prices of technology companies in the United States and a dip in valuations of those that went public in India last year.
Consistently escalating pay levels have a long-term impact on companies.
“There will be a natural cooling off over a period of time – we have had an overheated job market for some time now (particularly in certain skill segments), it is only normal to expect some easing of that market in the next 3-4 quarters,” said Anandorup Ghose, partner at Deloitte India.
Anuj Roy, managing partner at executive search firm Fidius Advisory, said the over-the-top pay increases will be over except in areas where there is a huge demand-supply mismatch. “But it won’t diminish the attractiveness given that this is a sector which is still offering the most,” Roy said.
