The latest RazorpayX Payroll Report reveals the ambivalence faced by start-ups as CXO hiring’s are cut and gig-workers encouraged – while tech rules as ever
There has been a perceptible shift, of late, in the way Indian start-ups regarded hiring and remuneration. This change has markedly revealed itself in the last one-year period, as India gradually overcame the pandemic-induced lockdown stage and was attempting to resume business as usual. Now, the shift has been conclusively captured in the latest Annual Insights Report by RazorpayX Payroll, the business banking platform of Razorpay – one of the leading solutions providers for day-to-day financial tasks and payroll management for businesses.
The report is based on RazorpayX Payroll data between October 2021 and September 2022 and covers over 25,000 employees across 1000 plus Indian start-ups using RazorpayX Payroll services spanning more than 20 industry sectors.
A mixed bag at a glance
The insights provided by the report reveal the ambivalence faced by start-ups in the post-pandemic scenario, as well as in an increasingly volatile global situation. On one hand, cash-strapped start-ups are cutting-back on astronomically paid CXO hirings, while on the other handexisting employeesare being offeredhikes andpay-outs in a mounting attempt to retain the best talent.Additionally, the scenario for gig-workers looked brighter in comparison to permanent employees.
Following is a bird’s eye view of the salient findings:
- 61% drop in new hires in permanent positions during the period surveyed.
- A downward trend in hiring senior personneloverall.
- 93% cutin CXO hiring during the period.
- 153% rise in payments to gig-workers.
- 15%increase in companies that shifted to a semi-gig workforce model.
- 62%increase of gig-workers who earn between INR85k and INR150k per month.
- 69% increase of gig-workers who earn more than INR150k per month.
- Despite a fall in overall hiring, salary spends have spiked by 64.7%.
- The rise in salary reveals gender inequality, with salary growth for men at 29% andwomen at 22%.
- Although median salary gap between the two genders was 46% during this one-year period, the gap between genders in the 95th percentile salary bracket was as high as 70%.
- The hiring ratio between genders was 2:1 in favour of men, revealing a lower participation of women in the workforce during the period.
Two emerging trends
The RazorpayX Payroll report revealed two distinct trends emerging in the Indian job market, at least for start-ups.
- Tech jobs still rule, and will continue to rule.The report found that while recruitmentshave steadilyfallen across functionsover the last one year, hiring in technology seems to have been impacted the least. On the contrary, technology-related hiring actually increased – although marginally – by 4% in the face of a generally slowdown in recruitments. It looks like tech jobs will continue to drive the start-up job market.
- The gig model could become the start-up standard. Despite a downturn in permanent recruits, the gig-work force appears to be the preferred model for start-ups. Payments to gig-workers have spiked by 153% since Oct 2021. 15%of enterprises have shifted to a semi-gig workforce model during this one-year period. Although the major chunk of gig-workers still comprise semi-skilled employees paid below INR20k per month, that segment is still one of the slowest growing. In contrast, skilled gig-workers earning INR85–150K and above – still a minority group – have witnessed the highest growth in the last one year.
However, variation in salary growth for gig-workers is too wide across scales. While the median range increased by 19.9% through the year under survey, salaries in the 99th percentile shot up by 58.3% during that period.
Speaking on the report to the media, Shashank Mehta, RazorpayX Vice President and General Manager said: “…. The data from RazorpayX Payroll indicates that start-ups have been optimizing their workforce by building leaner yet stronger teams, keeping in mind the macro-forces. Moreover, compensating their existing employees for their contribution towards building sustainable runways in the long run shows that companies have been looking inwards, alongside the increasing adoption of giggers. Coupling this trend with rising salaries across key roles, we will soon see a new era of work among start-ups.”
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