Startup Employees Express Unease About Job Security: CIEL HR Report The report highlights the significant challenges faced by the startup ecosystem in early-stage funding
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Recent reports by CIEL HR Services' has revealed that nearly 67 per cent of the surveyed workforce is open to transition from startups to established firms
A substantial 40 per cent of employees in the startup sector express unease about job security as the survey revealed that attrition continues to be a challenge for the sector marked by an average median tenure of merely 2.3 years, which is considerably lower than other industries. Approximately 30 per cent of respondents revealed they are drawn to established firms due to the promise of better pay as financial stability plays a crucial role in their career decisions. Moreover, 25 per cent of participants cite a lack of work-life balance as a driving factor influencing their preferences.
The report highlights the significant challenges faced by the startup ecosystem in early-stage funding, which started at $151.22 million in January 2023, and fell by 30 per cent to $105.82 million in December in the same year. However, funding has shown an increase of $127.68 million in February 2024. The increase in investment indicates that early-stage firms are growing and becoming more stable. On the other hand, late stage funding has seen a significant drop from $65.02 million in January 2023 to $43.86 million in January 2024, a decline of 32.54 per cent.
Coming to the hiring prospects, a 48.48 per cent decline from January 2023 to February 2024 indicates that startups are not able to spend to upgrade their workforces. The senior leadership positions have also witnessed a major drop from 18 persons hired in January 2023 to only 5 persons hired in February 2024.
According to the report, retention remains a major challenge for startups as the average tenure of an employee is 2.3 years which is significantly low compared to other industries. Startups are offering attractive compensation packages to retain employees, including competitive salaries, bonuses, and other financial incentives. Prioritizing employee well-being is crucial, with wellness programs, mental health support, and work-life balance initiatives. Many startups have embraced remote work as a permanent or hybrid model, enhancing job satisfaction and attracting talent. By adopting these measures, startups aim to create a positive work environment, reduce attrition, and foster employee loyalty.
Commenting on the findings, Aditya Narayan Mishra, Managing Director & CEO - CIEL HR Services, said "In the rapidly evolving environment of India, startups play a vital role as key catalysts for growth, fueling innovation and generating employment in diverse sectors. With 65 per cent of companies planning to increase hiring in the coming months, the future looks promising for the startup ecosystem; we expect this ecosystem to revive by the end of this year. However, startups need to prioritise employee retention and provide comprehensive value propositions that prioritise employee well-being, career advancement, and work-life balance. This will help employees regain their confidence in startups and reduce attrition."
