India currently ranks as the world's third-largest startup ecosystem, boasting more than 1.25 lakh registered start-ups employing over 12 lakh people. Additionally, the nation hosts over 110 unicorns, with start-ups having secured over 12,000 patents to date.
According to the Economic Survey 2023, one of the most notable accomplishments of the Indian start-up ecosystem has been generating new jobs, with start-ups having created around 10 lakh jobs till 2023. Further as per The Economic Survey of India 2022, 48% of the start-ups are from Tier 2 and Tier 3 cities, signaling a tremendous grassroots potential.
The contribution of start-ups to the sustained growth of Indian economy and job creation thus cannot be underscored. Not only do they represent the spirit of innovation and entrepreneurship that is becoming the hall mark of new India but also contribute to nation building.
In the start-up world, a lot of focus is on achieving exponential growth and that too in a relatively short span of time. This is natural since the funding that is extended to them requires an assurance of growth and return on investments.
Start-ups today face the ever-present challenge of achieving rapid growth while ensuring sustainability—a balance crucial for long-term success. Often, the pressure to scale quickly leads start-ups to prioritize workforce expansion as a short-term strategy, hiring hundreds of employees and expanding operations across multiple cities. However, this approach can have drawbacks, as witnessed by many start-ups having to scale back operations and let go of employees within a short period.
While it's true that some level of adjustment and adaptation is unavoidable in the dynamic landscape of business, it's crucial to acknowledge the human impact of these changes. While it's common for organizations to rationalize and refine their strategies as they navigate complex environments, it's equally important to recognize the effects on the lives of those involved.
This dynamic underscores the importance of start-ups focusing on value-driven hiring rather than just workforce expansion. Value-based hiring prioritizes aligning the values and beliefs of job candidates with those of the hiring organization. Instead of solely focusing only on skills and qualifications, this approach evaluates candidates based on their cultural fit, shared values, and ethical principles. By hiring individuals who not only possess the necessary skills but also demonstrate a commitment to the organization's mission, vision, and culture, start-ups can foster a positive work environment, enhance team cohesion, and drive long-term success.
Furthermore, value-based hiring contributes to reducing turnover rates and improving retention. When employees align with the organization's values and feel connected to its culture, they are more likely to stay loyal and committed in the long term. This not only reduces recruitment costs but also enhances employee satisfaction and stability within the organization.
Beyond these benefits, value-based hiring can also positively impact a startup's bottom line. Passionate employees who are aligned with the company's mission are more likely to go above and beyond their job descriptions, leading to increased productivity, higher quality work, and ultimately, greater profitability for the start-up. Moreover, passionate hires often bring fresh perspectives and innovative ideas to the table, driving creativity and innovation within the organization.
Candidates considering joining a start-up should carefully evaluate their fitment beyond just the initial hype or salary package. They need to assess their ability to adapt to the dynamic and sometimes volatile nature of a start-up environment. Ideal candidates for startups possess a diverse range of qualities, including adaptability, entrepreneurship, resilience, self-motivation, flexibility, collaboration, passion, eagerness to learn, results-oriented mindset, and comfort with ambiguity. They excel in dynamic settings, embrace wearing multiple hats, thrive in team environments, and are deeply aligned with the company's mission and objectives.
As we look ahead, it's essential to recognize the tangible benefits that value-based hiring brings to the table. Beyond fostering a sense of camaraderie and shared purpose, hiring for passion can directly impact a start-up's bottom line.
More than 100 Indian start-ups are estimated to have laid off more than 28,000 employees in 2023. However the tide seems to be turning and in the start-up sector, there is expected be an upturn in hiring in the second half of 2024 as the economy recovers and funding increases.
Traditional IT services companies, which account for the majority of hiring in this sector, are expected to see an increase in hiring this year. Similarly other allied sectors like Fintech, Consumer Tech, Health Tech are also likely to rebound, The GCC which are the backbone of India’s IT and business services industry are already experiencing an increase in demand for talent and are expected to grow a rate 10-15% till 2030 .
By fostering a culture of creativity and open-mindedness, start-ups can stay ahead of the curve and continue to innovate in their respective industries. But perhaps most importantly, hiring for passion can have a significant impact on employee retention. When employees feel genuinely passionate about their work and aligned with the company's mission, they're more likely to stay for the long haul. This reduces turnover rates, saves on hiring and training costs, and ensures continuity and stability within the organization.
Authored by Sonal Arora, Country Manager at GI Group Holding India
