Startup hiring: Rationalisation of hiring plans and maturing startup talent pool

By Anish Basu Roy

There are clearly two large trends that are shaping up in the startup-hiring ecosystem and are likely to impact the April-September ’16 horizon. One of those has been the much-publicised trend of either startups laying off talent or postponing their hiring plans. Social media has been abuzz with Flipkart’s decision of delaying the joining of their management trainees and the layoffs done by Zomato, Peppertap, Foodpanda, Snapdeal and the rest.

The other not-so-widely -spoken about trend is the one taking shape amongst talent that is looking to join startups now. Prospective talent looking to join startups now exercises much greater caution and scrutiny of business models before taking the decision to join a startup. This is a great sign of a rapidly maturing startup ecosystem.

Impact of startups revisiting their business models

The Indian startup ecosystem is in that stage where the initial euphoria is now settling down, mindless growth is being seen as vanity and unit economics is being seen as the only sanity. All of this is bound to have a pronounced impact on changing the hiring focus of startups. In light of the same, I see some of the following scenarios playing out from the perspective of the startups in the next few quarters:

1. Startups will very closely examine their decisions to build large on-ground execution teams purely for geographical expansion. The ecosystem has learnt its lessons from the various hyper-local startups such as Grofers and Peppertap expanding into new cities and eventually having to withdraw.

2. There are valuable lessons for the entire ecosystem in the several top-level exits of celebrity hires that have been seen in the last few quarters. I am sure; most startups are consciously trying to ensure the right –fit while hiring top talent. Clearly, you cannot hope that overnight growth will be achieved simply by paying top dollar salaries to some celebrity hire. Every stage of business needs specific type of talent and for a startup being top-heavy is a sure recipe for disaster.

3. The number of startups in India is growing rapidly and is expected to have over 11,200 startups by 2020. As per the NASSCOM report, titled ‘Start-up India – Momentous Rise of the Indian Start-up Ecosystem’ there are already over 4200 startups in India and the total annual funding has exceeded $5 billion. All of this will have a positive impact on the overall hiring numbers of the startup ecosystem.

As per the recent studies released by Teamlease Employment Outlook Repeat, the boosting e-commerce sites and tech driven startups will observe a 23.6 per cent increase in the job hiring, between a small time span between April and September.

Impact of a more mature startup talent pool and growing opportunities

From the perspective of the talent that is seeking opportunities with startups, here are some of the relevant trends:

1. Many startups will be born from the existing set of startups. We already see several former startup employees setting out to set up their own ventures or join even more early-stage startups. Rarely do you see employees of startups going back to a corporate environment or large companies nowadays.

2. Hiring talent isn’t getting any easier these days. Most prospective employees want to understand at length - the business model, expansion plans, unit economics, culture and background of founders before taking the decision to join. A large fundraise is no longer assurance of being able to hire the right talent. It is also a huge positive for startups because employees are joining startups - much better informed and for the right reasons.

3. India’s urban centers present huge challenges in urban services, last-mile logistics and transportation. Several startups depend on on-ground teams to help mitigate this challenge. The urban poor certainly stand to benefit from these employment opportunities tremendously. Nasscom says in a report published jointly with Zinnov Management Consulting, that startups are expected to create over 2.5 lakh jobs in the next 5 years.

In summary, startup hiring in India is clearly entering stage 2.0 in the coming few quarters. It is much better equipped to hire at scale and in a sustainable manner. Past learning has only helped it rationalise and calibrate its hiring plans much sharper. At the same time the maturing talent pool available for startups is much better prepared to handle ambiguity and shorter business cycles of startups.

The author is CEO and co-founder, Shotang.