Salary increments: Indian startupscape comes crashing down from last year's highs

Salary increments: Indian startupscape comes crashing down from last year's highs

• By Staff Writer

The salary increment scene at India's startups turned out to be way more tepid in 2022-23 compared to the previous cycle, with employees receiving hikes ranging between 8% to 12%.

A year ago, startup employees had receives hikes worth almost twice that, a ToI report said on August 14.

Elevation Capital's report analysed data from more than 200 Indian startups and 1,000 candidates.

Besides, as many as 30% of the companies also deferred salary increments for one or two quarters. At these companies, employees in only a few functions received specific raises.

As companies tried to tackle cash flow problems, compensations came down and restructuring happened in leadership roles at startups during the year under review, with top executives seeing cash increments replaced with stock options.

Equity compensation in India's startup ecosystem is on the rise because of increasing liquidity events, Kallan H, VP of talent, Elevation Capital, told ToI.

According to him, "We are observing a cultural shift in how ESOPs are viewed by employees and startups; while there is a higher buy-in for ESOPs at the leadership level, awareness of stock options is still a bit low in the entry levels.".

"Given that career tenures at entry levels are an average of two years, there is less appetite for ESOPs which generally vest after four years," he added.

There, however, were also cases of niche/small startups (with tech teams of 40 employees or fewer) that handed increments for entry and mid-level tech roles in the range of 15-20%, in an attempt to retain certain specialised talent.