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Startups Embrace Outsourcing Firms While Full-Time Hiring Suffers Hit By 17.23%

Hiring at the CXO level witnessed a decline of 25% between April and December 2023; Full-time female employee salaries surge by 9.13%, signaling forward momentum toward gender pay equity

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In the dynamic landscape of 2023, the Indian startup ecosystem underwent a period of turbulence and transformation. Startups were deeply engaged in the seamless integration of emerging technologies, adapting to revised regulatory frameworks, and implementing innovative business models to enhance efficiency and maintain a competitive edge within the industry. In the face of these challenges, organisations exhibited strategic prowess by optimising costs and reallocating resources to other critical business priorities. Concurrently, many organisations strategically reinforced their workforce through targeted recruitment, demonstrating resilience in navigating challenges.

These industry dynamics and workforce strategies come to light in the movements experienced across the sector tracked by RazorpayX Payroll, the business banking platform of Razorpay. The platform analysed payroll data of 30,000+ employees, across 20+ sectors currently using RazorpayX Payroll, from April to December 2023. These Insights delve into the transformations within the organizational ecosystem, marked by increased adoption of outsourcing firms, changes in the salary distributions & hiring patterns, and department-wise demand over the past 9 months.

Key insights include:

● An Upswing in the Demand for Outsourcing Firms for Hiring Contractors: While hiring for full-time employees slowed down in the past 9 months, the demand for outsourcing companies witnessed an upward trend, with their money inflow witnessing a growth of 26.77 per cent. The demand for outsourcing companies increased across departments such as technology, sales & marketing, and logistics & operations by 14.14, 10.74, and 6.71 per cent respectively. This reflects the significant shift of startups towards specialised outsourcing firms catering to their respective niches. Interestingly, this growth doesn't extend to individual contract workers as their salaries only saw a marginal increase of 0.22 per cent.

● Full-time Female Employees’ Salary Depict a Slight Growth: The total salary disbursed over the past 9 months has grown by 8.22 per cent. Meanwhile, the average salary for full-timers witnessed an uptick of 6.69 per cent. For female employees, the average salary increased by 9.13 per cent, and for male employees, it grew by 8.87 per cent. Notably, the positive trend in salaries for female employees reflects a commendable increase, highlighting strides toward gender pay equity in the workplace.

● Hiring of Full-time Employees, Including CXO Hires Witnessed a Decline: While hiring for full-time employees dipped by 17.23 per cent, CXO hiring witnessed a decline of 25 per cent. The data also reveals a sharp decrease of 37.63 per cent in hiring for senior executives.

● Department-wise Growth in Full-time Hiring for Sales & Marketing, Finance, and Technology: Despite a dip in hiring full-time employees, departments such as sales & marketing, and finance have witnessed a growth of 23.24 and 21.45 per cent respectively. This trend depicts strategic decision-making by companies, reallocating resources to areas that are crucial for growth and financial stability.

● Salary Distributions: Finance and HR Take Centre Stage: Full-time employees in finance and human resources departments saw a salary increase of 11.06 and 8.90 per cent respectively. At the same time, the overall growth across sectors stands at a growth of 7.03 per cent.

Commenting on the trends observed, Ayush Bansal, VP & General Manager, RazorpayX said, “The Indian startup ecosystem continues to lead in technological disruptions, setting new benchmarks despite economic challenges. The data from the RazorpayX Payroll platform reflects a growing inclination among startups and enterprises towards outsourcing services. This strategic shift aims at enhancing efficiency, fostering a balanced approach to effective capital utilization, and paving the way for future building blocks of the company through innovation. While challenges are apparent with the decline in CXO hiring, the industry's commitment to fostering a workplace that values diversity is evident.

The growth in salaries especially for women employees, despite a hiring slump, highlights the industry’s commitment to building a workplace that values diversity and recognises the contributions of all its members. Together, these trends usher in a new era of work culture marked by specialised talent, a more dynamic, collaborative approach to driving innovation, and a steadfast commitment to gender pay parity,” Bansal added.



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