Despite the current trend of layoffs among larger corporations across India, 80% of early-stage startups, those with a current workforce of fewer than 20 employees, are actively seeking to expand their workforce in 2023, according to a survey by the Federation of Indian Chambers of Commerce and Industry (FICCI) in partnership with Randstad India.

The research noted that these startups have secured Series A and Series B funding, are well-capitalised, and are actively seeking to hire new talent. Most, or 92%, of these startups stated that their hiring decisions will primarily be driven by new project orders, additional funding raised from investors and expansion strategies.

A third (31.9%) of startups anticipate an increase in hiring by over 30% while 28.1% of companies plan to expand their teams in the 11-20% range.

Sectors like Agri/Agritech, AI/ML/Deeptech, Automotive, and E-commerce/delivery services are expected to increase hiring in the 11-20% range, while Aerospace & Defense, Energy, and Healthcare startups are expected to increase their hiring activities by over 30%. Overall, sectors depicting the highest intent to hire include healthcare (13%), IT/ITes (10%), agri/agritech (8%), AI/ML (machine learning)/DeepTech (7%), Fintech (7%) and Manufacturing (7%).

In terms of employment type, 57.8% of startups are looking for permanent recruits while 42.2% are looking to hire temporary and gig workers.

The survey noted that hiring will primarily occur at the junior and mid-levels. Approximately 38% of startups have indicated that they intend to recruit more junior-level employees, while 27.3% of respondents are planning to focus on mid-level hiring. However, the Agri/agritech and automotive sectors will focus more on senior level C-suite hiring.

By qualification, 45.2% of startups are looking to hire semi-skilled employees, while 41.5% of startups are seeking highly skilled professionals.

FICCI and Randstad India’s survey showed that 54.38% of startups attribute the high attrition rate in the startup industry to factors such as better pay packages offered by larger corporations, as well as concerns over job security in a startup. Other factors contributing to attrition in startups include a lack of clarity around career progression and credibility.

In terms of hiring challenges faced by startups, the primary factors include a deficit in requisite skills, mismatches in salary expectations, and a reluctance among potential candidates to join a startup due to concerns over risk perception.