Salary hikes at startups eased in FY23 on funding squeeze, survey shows

economictimes.indiatimes.com:

Salary hikes for tech employees and leadership teams at startups in India cooled in FY23 after a two-year boom period as companies started to trim costs to stave off a broader funding winter, a survey by Elevation Capital showed. During the year, average salary hikes handed out to employees were between 8% and 12%, the survey of over 200 startups by the venture capital firm revealed.

The increment variation was attributable to several factors, including individual and company performance, the quality and level of talent, and location, the Startup Paypulse Report 2023 said. “Technology roles in early-stage startups see salary increments ranging between 8-12%.

Overall salary increase trends are cooling down in the technology sector,” it said.Also read | CXOs log out of unicorns to start up own ventures Around 25-30% of companies have deferred salary increments for one or two quarters, and leadership compensation shifted more towards stock-based rewards over cash payouts, it added. After a surge in investments in 2021 and early 2022, Indian startups have been seeing a significant slowdown in funding as venture investors hit the brakes on cutting cheques due to a global macroeconomic slowdown and rising interest rates.

This has prompted startups to rein in costs, leading to layoffs, scaling down of businesses and putting expansion plans on the backburner. “In the face of macro challenges, Indian startups are showcasing adaptability by offering inflation-led salary increments to attract and retain talent.

However, the variation is significant, with technology professionals in small to mid-size startups seeing moderate increments,” Kallan H, vice president-talent, Elevation Capital, said. For leadership roles, “we are seeing