According to a report by RazorpayX Payroll, hiring of CXOs fell by 93 per cent and hiring of new permanent employees fell by 61 per cent in October of last year. Throughout last year, Indian startups significantly reduced their hiring quotas for permanent employees and top-level management, as a funding freeze forced some companies to cut costs while also firing select employees.
RazorpayX is the fintech unicorn Razorpay’s business banking platform. On its platform, it serves over 30,000 businesses. The report’s sample size includes payroll data from over 25,000 employees from 1,000+ Indian startups across 20+ industries who are currently using RazorpayX Payroll between October 2021 and September 2022.
Hiring in almost every sector and designation has dropped. However, hiring in technology remains the least impacted. Unlike other sectors, technology-related jobs have increased marginally by 4 per cent. Startups are shifting to gig workers, with payouts to gig and freelance workers increasing by 153 per cent since October 2021. Since October 2021, the total number of businesses that have adopted a semi-gig workforce model has increased by 15 per cent.
Shashank Mehta, Vice President and Head, RazorpayX said, “……. startups have been optimising 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…… However, the existing gender gap in terms of workforce ratio and pay still remains a challenge every startup needs to counter on priority. It is only through equitable participation and pay can we make our workforce truly productive in every sense.”
Despite a decrease in hiring, salary spending is increasing: While overall hiring has declined, salary spending has risen by 64.7 per cent since October 2021. Further, the rise in salary is not exponential at an average of 12 per cent. While the median salary of gig workers increased by 19.9 per cent in the last year, salaries in the 99th percentile increased by a whopping 58.3 per cent.
The growth in salaries earned by males is higher at 29 per cent as compared to 22 per cent by women. Furthermore, salary disparities appear to widen as one moves up the salary scale. While the median wage disparity between men and women was 46 per cent in the previous year, the wage disparity between the two genders in the 95th percentile salary bracket was a whopping 70 per cent. This wage disparity is accompanied by lower female labour-force participation: for every two men hired in the last year, one woman was hired.