The good times are likely to make a comeback for a majority of employees in Indian startups because they are expected to get better salary hikes—the biggest pay packet raises in four-five years—during the upcoming appraisals in 2022. Experts are of the view that average hikes are likely to be in the range of 12-15 per cent and among the highest across sectors, spurred by robust growth, record investments and new-age companies want to retain top tech talent.
Many startups are actively considering rolling out 15-25 per cent average hikes, with the top performers getting more as they face mounting challenges of attracting and retaining employees.
“We see tech-based early-stage companies improving their pay increases this year; we expect it to go back to four-five years ago when the average increment in this sector was to the tune of 12-15 per cent,” Anandorup Ghose, partner at consultancy firm Deloitte India, told ET.
The financial daily quoted Roopank Chaudhary, partner human capital solutions at HR services firm Aon India, as saying that this time salary increments will be the highest since 2015-16. “Attrition now is significantly higher than then,” he said, mentioning that the firms are opening or purse strings to retain key employees.
Startups Shiprocket, UpGrad, Simplilearn, CredAvenue, HomeLane, NoBroker and CashKaro told the publication that the average hikes in 2022 are likely to be higher than pre-pandemic levels.
Startups growth strategy hinges on retaining the top employees. High performers, therefore, are likely to get up to 75 per cent increases, while for those at relatively low salary levels, the remuneration could even double.
New-age companies are planning to roll out higher bonuses, retention bonuses, and performance or tenure-linked stock options to their employees. More importantly, after raising $36 billion in 2021, startups are splurging on staff as they are flush with funds.
“Given the robust growth of our industry due to promising macroeconomics, tremendous headroom for growth and Covid tailwinds in the last few years, y-o-y monetary compensation increases have been on an upswing,” Saahil Goel, CEO at e-commerce shipping and enablement platform Shiprocket, which has budgeted over 15 per cent hike to the wage bill for the upcoming appraisals, told the daily.
He went on to add that the company’s hikes have been slated at 5-6 per cent ahead of the market consistently, and sustained business impetus has led to an increased bonus pool for staff.
According to cashback site CashKaro cofounder Swati Bhargava, this year increases will range from 15 per cent to as high as 75 per cent for top performers.
Last year, digital debt markets platform CredAvenue gave a 25 per cent jump on the fixed compensation on average, while on annual bonuses, it paid up to 150 per cent of the target to top performers. “This year’s will be better; we have an optimistic outlook,” the daily quoted Joseph Nirmal, vice-president, people and culture, as saying.
In the past two years, because of disruptions caused by the Covid-19 pandemic, salary hikes have been limited and benefits such as work-life balance, Covid support and vaccination were high on the agenda across industries, the daily cited Mayank Kumar, managing director at edtech company UpGrad, as saying.
