The pace of recruitment will increase this year, said about 72% of startup founders surveyed by debt fund InnoVen Capital in its annual Startup Outlook Report. Startups operating in logistics, digital media, e-commerce and deep-tech sectors are the most bullish about hiring.
“At the beginning of the festive season in August and September last year, demand came back and the pervasive changes in consumer behaviour also played to the strengths of digital-first consumer-focused business models,” Ashish Sharma, chief executive officer of InnoVen Capital, said in the report.
The Covid-19 pandemic hurt most companies last year, and they had to make tough calls around realigning team sizes and salary cuts, although a few enjoyed immediate tailwinds (edtech, online gaming, etc.), the report stated.
Some companies took harsher measures than required at the time but “are now back in the market to ramp up their teams and position themselves for growth again,” Sharma said.
The pandemic added muscle to the team sizes of health-tech, enterprise and fintech companies as they sustained hiring in 2020 and are expected to hire at the same level this year as well. The e-pharmacy space also saw major action in 2020 amid rising demand for online medicine delivery after the virus outbreak.
“We are aggressively looking to hire across all levels and functions—in managerial roles as well as frontline workers. We plan to hire 4,000-5,000 people this year as we expand our pharmacy tie-ups from 50,000 currently to over a lakh,” said Siddarth Shah, co-founder and chief executive officer of Ascent Health & Wellness Solutions.
The confidence stems from investors flush with capital chasing these startups, with most firms also managing to raise follow-on rounds.
“We have seen significant investments in tech-enabled business ideas during the lockdown. These investment events have strengthened the belief in India’s tech innovation startups paving the way for more startup ideas to take birth and the existing well-managed startups to grow at a rapid pace,” said Aditya Narayan Mishra, CEO at CIEL HR Services.
Hiring in startups grew nearly 20% in 2020 compared to 2019.
“In 2021, we see this momentum continuing,” Mishra said. “With demand back and a favourable funding environment, most founders have a higher bias towards growth versus profit, and Sharma of InnoVen said “it will have a positive impact on hiring.”
The survey highlighted that the top challenge for startup founders is in finding the right talent. Over 52% of founders said hiring right is their biggest challenge, consistent with last year’s survey.
“Getting good talent has become increasingly difficult and while good high growth companies do attract talent, since the same pool of people are being courted by most firms, getting them has become difficult. That’s a big challenge we face,” said Aman Gupta, co-founder of lifestyle wearables brand boAt.