The Annual Insights Report by RazorpayX Payroll, the business banking platform of Razorpay, has derived insights by analyzing payroll data from Oct 2021 to September 2022 of 25,000+ employees across 1000+ Indian startups from 20+ sectors who currently use RazorpayX Payroll. On one hand, facing a capital crunch, startups are experiencing the great normalization of hiring, limiting their hiring of CXOs and permanent employees while on the other, startups are increasing payouts to existing employees.
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Here are some top insights from the report on Startups:
- Indian startups see The Great Normalization: The hiring of new permanent employees has dipped by 61% as compared to Oct 2021. The dip in hiring is seen across seniority with the CXO hiring noticing a massive normalization, dropping by 1300% since Oct 2021. While hiring across departments has decreased, hiring in technology seems to have been least impacted. Technology-related jobs have managed to marginally increase their contribution to the overall workforce by 4% while the hiring trend is slowing down in general.
- Gig, the new norm of work: Payments to gig-workers have seen a growth of 153% since Oct 2021. The total number of enterprises that have shifted to a semi-gig workforce model has increased by 15% since Oct 2021. Semi-skilled gig workers who are paid less than INR 20k have the highest contribution to the entire pool of gig workers being hired by startups, followed by those who earn anywhere between INR 20-40k. However, these workers are one of the slowest-growing cohorts growing at 26% and 52% respectively. However, skilled gig workers who earn between INR 85K to more than 150K, although contributing the least to the overall pool, have seen the highest growth in the last year. Gig workers who earn between INR 85K-150K have grown by 62%, while gig workers who earn more than 150K grew by 69% in the last one year.
- Despite a drop in hiring, salary spending is on a rise: While overall hiring has decreased, salary spending has increased by 64.7% since Oct 2021. Contrary to previous trends, salaries across different salary levels have been rising gradually but not exponentially, at an average of 12%. However, growth in salaries is very different across different scales of gig workers. While the median salaries of gig workers have increased by only 19.9% in the last year, salaries in the 99th percentile of gig workers grew by a whopping 58.3%
- Rising salaries are not distributed equitably across genders: While salaries are rising, they are not distributed evenly across genders. Gradual growth in salaries is seen in both genders, however, growth in salaries earned by males is higher at 29% as compared to 22% by women. Moreover, salary gaps seem to get wider, the higher one goes up the salary bracket. While the median salary gap between men and women was 46% in the last one year, the salary gap between the two genders in the 95th percentile salary bracket was a whopping 70%. This salary gap is accompanied by lower participation of women in the workforce – for every 2 men that were hired in the last year, 1 woman was hired.
Shashank Mehta, Vice President and Head, RazorpayX said, “The data from RazorpayX Payroll indicates that startups have been optimizing their workforce by building leaner yet stronger teams, keeping in mind the macro-forces. Moreover, compensating their existing employees for their contribution towards building sustainable runways, in the long run, shows that companies have been looking inwards, alongside the increasing adoption of giggers. Coupling this trend with rising salaries across key roles, we will soon see a new era of work among startups.”
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However, the existing gender gap in terms of workforce ratio and pay still remains a challenge every startup needs to counter on priority, Mehta believes.