Unicorns keep small firms out with big pay hikes, Technology News, ETtech

Illustration: Rahul Awasthi
Illustration: Rahul Awasthi

Unicorns in the startups space such as Oyo, Swiggy and Dream11 are offering 50% salary hikes for new hires, even as younger startups make do with 15-25% increases, data sourced from HR firm Xpheno, which was shared exclusively with ET, show.

Unicorns are companies valued at more than $1 billion and are typically able to stretch themselves on salary packages even in a sluggish market, in order to attract critical talent in areas such as engineering and product.

The trend was last witnessed during 2015-16 when large e-commerce companies like Flipkart and Myntra were snapping up top talent with unprecedented salary offers.

Unicorns which offered some of the most lucrative salary packages last year included Paytm, Ola, Uber, Byju’s, Swiggy, Dream11 and Rivigo. These companies employ around 60,000 people directly and 160,000-180,000 indirectly, ET reported earlier.

Graphic: Rahul Awasthi
Graphic: Rahul Awasthi

Engineering, data science and product roles attracted the highest salaries.

Hiring engineering talent still remains difficult. Even though the pool may seem large, quality talent is still limited. Companies at our stage are in a constant hiring battle with the unicorns and even with the tech giants who remain a preferred choice,” said Shashank Murali, co-founder of Bengaluru-based Tapchief.

Sales and operations talent from top FMCG or telecom brands, and strategy talent from consulting backgrounds have also got lucrative offers from unicorns over the last two years, Xpheno said.

Shan Kadavil, the co-founder and CEO of FreshToHome, said hiring was a common challenge across early stage startups.

Hiring for leadership roles is the first challenge any startup faces, but building a team after having competent leaders in place is comparatively easier, he said.

Despite the deep pockets of some of the bigger companies, HR experts said employees now wanted to associate themselves with early stage startups, since that entailed higher responsibilities rather than just a fatter pay cheque.

“Creating an impact through their work or what the startup is building, is gradually becoming a criteria for the candidates,” said Shwetha Harikrishnan, HR director at HackerEarth, which works with recruiters to hire developers.

Sreejith Moolayil, co-founder and COO of True Elements, said it boiled to individual choice, ultimately.

“At an early stage startup, employees have an array of responsibilities and the learning is more rapid and vast. But, at a unicorn, processes are streamlined and roles have definite structure and a process, restricting the individual’s growth, just as in an MNC,” he added.

Employee stock ownership plans (ESOPs) are another reason why professionals take up offers from early stage companies, despite lesser pay.

“If the young talent is aligned well with the success of the startup, and they can see the goal clearly and believe in it, then stocks hold their interest. It’s about co-ownership,” said Siddhartha Verma, talent specialist at Xpheno.

Employees from fintech company Razorpay and industrial goods marketplace Moglix have reaped rich returns after investors in both companies snapped up their vested stock options.

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