Compensation experts said average salary increments at startups are likely to be in the range of 12-15% and among the highest across sectors. Several startups ET spoke to said they are planning 15-25% average hikes, with the top performers getting much more than that.
“We see tech-based early-stage companies improving their pay increases this year; we expect it to go back to four-five years ago when the average increment in this sector was to the tune of 12-15%,” said Anandorup Ghose, partner at consultancy firm Deloitte India.
Roopank Chaudhary, partner, human capital solutions at HR services firm Aon India, said salary hikes this time will be the highest since 2015-16. “Attrition now is significantly higher than then,” he said, indicating that the companies are paying out high increments to retain employees.
Startups Shiprocket, UpGrad, Simplilearn, CredAvenue, HomeLane, NoBroker and CashKaro told ET that the average hikes in 2022 are likely to mirror or be higher than pre-Covid levels.
Ringfencing top and critical personnel is critical to the growth strategy of startups and so high performers may get up to 75% hikes, while for those at relatively low compensation levels, the pay could even double. Higher bonuses, retention bonuses, and performance- or tenure-linked stock options will also be paid out to key people, said startups. These new-age companies are also splurging on employees as they are flush with funds, after raising $36 billion in 2021.
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“Given the robust growth of our industry due to promising macroeconomics, tremendous headroom for growth and Covid tailwinds in the last few years, Y-o-Y monetary compensation increases have been on an upswing,” said Saahil Goel, chief executive at logistics aggregator Shiprocket, which has budgeted an overall increase of more than 15% to the wage bill for the upcoming appraisals.
“Our increases have been slated at 5-6% ahead of the market consistently. Additionally, sustained business momentum has led to an enlarged bonus pool for our people,” he said.
At cashback site CashKaro, hikes will range from 15% to as high as 75% for top performers, depending on their current compensation base, cofounder Swati Bhargava said.
Last year, debt markets platform CredAvenue offered a 25% hike on the fixed compensation on average, while on annual bonuses, it paid up to 150% of the target to top performers. “This year’s will be better; we have an optimistic outlook,” said Joseph Nirmal, vice-president, people and culture.
In the past two years, since the pandemic broke out, due to business uncertainty, salary increase has been limited and there is an industry approach to prioritise benefits like flexibility, work life balance, Covid support and vaccination, said Mayank Kumar, managing director at edtech firm UpGrad.
“However, things are starting to open up and, as a result, we would see salary increase improve and mirror pre-Covid level,” he added.
Competition among startups for talent is one of the factors fuelling the rise in increments and is especially true for technology and product teams.
NoBroker cofounder Amit Agarwal said hikes will be equal to or slightly better than last year’s 10-25%. “We are a 2,500-plus team and we give ESOPs to the leadership team. We are considering top-up ESOPs for critical talent in this appraisal cycle,” he said.
Even those impacted by the first two waves of the pandemic are optimistic.
Home interior solutions platform HomeLane, for instance, is looking to roll out increments across the board, and also call out its top 20-30% of performers. “We have an attractive ESOP policy, and held a liquidity event a few weeks back,” chief operating officer Tanuj Choudhry said.