‘The great return’ is on as the allure of startups fades Apextalk

New Delhi: Executives who quit their stable jobs for the allure of startup life, with lucrative stock options and impressive job titles, are flocking back to their former employers, accepting similar or even reduced salaries, as they choose job security over the tantalizing prospects of the fledgeling startups.

“Many who left traditional firms to join startups are returning to established companies. They are moving at the same pay scale and, in some cases, even taking a 15-20% pay cut. Those taking the pay cuts have not been fired and want to work for more stable jobs,” said Anshul Lodha, head of recruitment firm Page Executive, India.

This shift in executive sentiment coincides with the financial difficulties faced by startups, particularly those in the edtech and fintech sectors, as well as widespread layoffs affecting more than 20,000 employees in the past year. Many of these companies aggressively expanded their workforces under the assumption that deal pipelines and client business would continue to flourish, only to be caught off-guard by a market downturn that forced them to freeze hiring, slash bonuses, and reassess their expansion plans.

Industry giants such as Tata Consultancy Services Ltd have also seen an influx of former employees.

“There is some great talent in startups, and some have lost their jobs. They are welcome to participate in the TCS process. Yes, even if they are moving back, we are welcoming them,” said Milind Lakkad, chief human resources officer of TCS.

While most returning junior and middle-level executives have secured jobs at larger firms, senior executives face a more daunting challenge, as opportunities at this level are more limited.

“Last year, many junior executives were given a lot of responsibilities at a young age. Now that the focus is on profits and sustainable growth, those ‘growth hacking’ opportunities, which led to many experiments, are gone. In such a scenario, junior executives may prefer more job security,” a senior startup executive said.

Most junior- to middle-level executives will prefer a more stable company if compensation is not significantly different. “Employees may also move from Series A or B startups, who have not managed to recently raise capital to a larger, more stable startup or a conglomerate if they can, for job security,” the executive added.

However, companies are careful in compensation negotiations as hiring returning talent at a higher salary band can create employee resentment.

“About two-three out of 10 who had joined startups are returning. We are treading within the internal salary bands since those who had gone out had done so on the back of inflated salaries and designations,” said S. Venkatesh, group president of human resources at RPG Enterprises. The HR head of the tyre to IT conglomerate noted that they get recruited in companies they had worked before because both the firm and the employee are familiar with the work culture and can settle in faster.

Resources conglomerate Vedanta also saw employees leaving for better salaries and profiles to startups. “But now they want to come back, and they are returning at pay cuts,” said Praveen Purohit, deputy chief HR officer at Vedanta Group.

In some cases, they are keen to return to profiles in new ventures with a larger digital presence. “The initial allure of startups and e-commerce firms have reduced, and people are looking at jobs which are in traditional firms but have roles that intersect with their digital, tech platforms,” said the HR head of one of the top three insurance companies in India.


Catch all the Corporate news and Updates on Live Mint.
Download The Mint News App to get Daily Market Updates & Live Business News.


Source link

Leave a Comment

Your email address will not be published. Required fields are marked *