In FY23, Indian startups gave salary hikes of 8-12% and favoured ESOPs, says Startup PayPulse Report 2023 by Elevation Capital
Indian startups gave employees salary increments between 8-12% on average in FY23. Performance was 50% of the weightage in salary increments and taking on additional responsibilities and receiving a promotion factored in about 20%, said the 'Startup PayPulse Report 2023' by Elevation Capital.
Employee Stock Ownership Plan (ESOP) continues to be a key component in increments for senior leadership roles. Given the muted cash increments observed in the last financial year, 50 % of startups explored offering additional equity grants to leaders.
According to Vice President of Talent, Elevation Capital, Mr. Kallan H, Indian entrepreneurs are demonstrating resilience in the face of macro issues by providing inflation-led compensation increases to entice and keep personnel. Although there is a big difference, technology specialists in small to mid-size firms report modest increases.
He further mentioned that there has been a culture change in how employees and startups approach ESOPs, with greater buy-in at the leadership level. In future the demand for Artificial Intelligence (AI) talent will continue to rise, followed by product, engineering, and other roles.
ESOP allocation usually constitutes 10-50% of the cash component offered to candidates for entry to mid-level roles in startups. Those in leadership positions receive ESOPs ranging between 0.2% and 1.5% of a company’s equity.
Salary adjustments have been made because of the change in the market environment, primarily at the leadership level. Contrarily, it's interesting to note that job seekers are willing to wait longer for the ideal work opportunity than to accept a salary that falls short of their expectations, says Assistant Vice President of Talent, Elevation Capital, Mr. Dipesh Jain.
Bangalore and Hyderabad topped Indian cities for technology talent availability, having a combined share of 72%. Some critical roles filled among the first few hires at early-stage companies are chief of staff/ founders’ office, growth, and finance.
India’s count of startups increased from 350 in 2014 to more than 90,000 in 2023. There are more than 100 unicorns (a privately held startup valued at over US$ 1 billion).
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.