When Prime Minister Narendra Damodardas Modi launched the Make in India campaign on 25th September 2014, he had three key objectives. He wanted to revive and boost the Indian manufacturing sector to make India a global manufacturing hub, present India as a favorable investment destination for offshore companies, and generate plenty of employment opportunities.
Being the quintessential visionary that he is, even Prime Minister Modi would not have imagined that a single initiative like the Make in India campaign would go a long way in reviving the fortunes of a nation that was slowly going down an abyss.
The Make in India campaign encouraged many who wanted to free themselves from the obligation of working for others to start their businesses and be self-employed. It resulted in a spurt of startups across the length and breadth of the country. And if the Make in India campaign in itself was not enough, the Covid-19 pandemic further helped bolster the growth of startups in India. So much so that India is now the third-largest hub for startups globally after the US and China. Among the many benefits that local startups provide is how they drive the talent market in India. And it is precisely what we are going to explore through this post. So, without any further ado, let’s get started.
The Rise of Startups & Their Impact on India’s Talent Market
The GOI’s Make in India campaign and the startup initiative resulted in a flurry of startups, and the number has been growing astronomically ever since. 14,740 startups were registered in 2020, up from 504 in 2016 when the initiative was still in its early days. That’s a whopping 2,825% increase in just 5 years. The number also explains why, despite the Covid-19 crisis, there is still a considerable demand and widespread influx of talent in startups, especially in the retail, eCommerce, logistics, and IT sectors.
That brings us to the question; what do startups do that make them a preferred destination for employment, and how are they driving the talent market in India? The answer, quite simply put, is they are doing plenty. Here’s a list highlighting the top 5 monetary and non-monetary ways startups drive India’s talent market.
1. Higher Salaries
While there is no talent shortage in India, the eventual number of employable professionals is falling behind, creating a considerable gap in the demand and supply of qualified candidates. Startups in India have access to enormous amounts of cash, and the inflow is expected to continue for the next 5-10 years. As such, they are going all-out to woo the best talent at any cost. Startups today are offering up to 2 times more salary than most other large industries, driving the value of Indian talent upwards. And it is not about higher pay packages alone; most startups also offer handsome joining bonuses in the form of cash, bikes or cars, or electronic gadgets.
2. Handsome Incentives and Increments
The scarcity of employable talent poses a significant threat to the existence of startups. Professionals with the required skill set realize this and know they are in the driver’s seat. As such, they are making the most of it. Startups are prepared to go any distance to prevent people from leaving, including offering fat retention bonuses, substantial performance incentives, and massive increments. According to the 2021-22 Aon India Salary Increase Survey, salary increments in startups are expected to grow from an average of 15.7% in 2021 to 16.9% in 2022. The figure is much higher than the overall industry, where the increments are expected to grow from 8.8% in 2021 to 9.4% in 2022.
3. Professional Development
A significant way startups are driving India’s talent market is by providing them an opportunity to reskill and upskill themselves. Policies around learning & development, internal job transfers, rehiring, rewards & recognitions are just a few examples highlighting how startups are going beyond their call of duty to provide all resources necessary for employee growth and development. And the impact these initiatives have is evident in the figures they translate into. According to the 2021-22 Aon India Salary Increase Survey, 14.7% of the employees working in startups get promoted every year, 55.3% exceed expectations, and only 2.5% are unable to meet expectations. These are significantly higher than the overall employment ecosystem, where the figures stand at 11.8%, 28%, and 7.3%, respectively.
4. Employee Wellness
The mental and physical well-being of employees directly impacts a startup’s growth and profitability. Unfortunately, its importance has never been recognized in the Indian employment setup. Employees working in startups, especially those recently incorporated, are expected to put in long hours at work, increasing the number of stress and anxiety-related incidents. Initiatives like free counseling sessions, meditation and yoga classes, etc., are just some of the ways startups ensure their employees stay stress-free, healthy, satisfied, and highly productive. It has helped usher a new trend in the Indian employment ecosystem where employees are finally treated as humans and not machines.
5. Creation of Wealth
You must be wondering why we chose to list ‘creation of wealth’ separately when we have already discussed salaries, bonuses, incentives, and increments. We firmly believe pay packages are temporary. They are gone the moment one loses the job, decides to resign, or the startup fails. On the other hand, the accumulation of wealth is a long-term concept. Most startups offer employees the opportunity to accumulate wealth by providing them ESOPs (Employee Stock Ownership Plan). ESOPs give employees a share in the ownership and can be sold at a premium anytime the employee wants to.
Final Thoughts
Indian talent, no matter how exceptional, has long been undermined and undervalued. Startups are finally giving Indian talent their due and an opportunity to sit across the negotiating table on an equal footing. The factors listed above indicate how startups keep employees happy, satisfied, motivated, and productive and how they have successfully managed to drive the value of Indian talent northwards. With India’s startup culture not looking to die soon, Indian talent is undoubtedly in for some good times.
About Ufinity Ventures
Ufinity Ventures provides talent management and business development solutions for SMEs & startups looking to outsource operations to Asia. Be it pre-hire services or post-hire assistance, we offer end-to-end solutions and work as an extended team for our broad global clientele base, thereby helping them save time and costs while enabling them to gain access to the best local talent.
