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What's In Store for Startup Hiring In 2016 and Beyond?

Mindless growth has clearly taken a backseat and startups are looking to strengthening their presence in fewer cities and focusing on unit economics.
What's In Store for Startup Hiring In 2016 and Beyond?
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The startup ecosystem in India has been at the epicentre of media attention within the country as well as abroad. While initially every major milestone was celebrated with great pomp and panache, soon the headlines in the media centred not on high-profile appointments but on the fact that start-up hiring had begun to slow down. A lot was spoken about Flipkart delaying the joining of their campus recruits and the way many start-ups, including Zomato, Snapdeal and Foodpanda, were letting people go across many divisions. But is this trend likely to stay? The answer to that question lies in uncovering some other trends that are taking shape in the start-up ecosystem.

 

1. Recalibration of business models, Unit Economics and Repeatable Growth Models:

Startups will very closely examine their decisions to build large on-ground execution teams only for the sake of geographical expansion. The ecosystem has learnt its lessons from the various hyper-local startups such as Tinyowl and Peppertap expanding into new cities and eventually having to withdraw. Mindless growth has clearly taken a backseat and startups are looking to strengthening their presence in fewer cities and focusing on unit economics.  This will certainly lead to more sustainable hiring by startups.

 

2. Top-Level Hiring and a Maturing Talent Pool:

While headline-generating appointments at astounding packages may be on the slow burn, there is no denying that start-ups are still hiring to fill positions correctly. 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. The number of top-level exits that we have seen in the last few quarters is ample proof of the fact.

At the same time, the prospective talent is also exercising a greater caution before joining the young early stage ventures and deeply evaluating their business models. This is a good sign for the ecosystem, revealing a new maturity in the second innings of hiring by start-ups. On a lighter note, founders have to be prepared to answer many more questions while interviewing these days.

 

3. Growing number of start-ups and Blue-collared jobs:

There are two micro-trends here that are likely to have a huge impact on hiring by start-ups in the country. One, the sheer number of startups in the country is expected to treble 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 are likely to exceed 11,200 by 2020. Nasscom says in another report published jointly with Zinnov Management Consulting, that startups are expected to create over 2.5 lakh jobs in the next 5 years.

Secondly, India’s urban centres have huge challenges in urban services, transportation, last-mile logistics and infrastructure. These are some of the core themes that start-ups in India are addressing, leading to creation of thousands of blue-collared jobs. As per a Teamlease study, e-commerce and tech start-ups are likely to dominate the hiring space in the coming months with 23.6% growth in employment. A major chunk of this is expected to comprise of blue-collared hires.

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 rationalize 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. It is time we realign ourselves to these new realities and quit arriving at abrupt judgments on the actions of startups. Letting a few people go in the journey to growth for a startup doesn’t mean it’s the end of the story. It only reflects their ability to learn quickly, act fast and come back stronger!

(As told to Sneha Banerjee of Entrepreneur Media)

Edition: December 2016

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