Govt’s Dig­i­tal Drive Tilts Hike Scale in Favour of Fi­nan­cial Tech Star­tups

The Economic Times - - Careers: The Fast Track -

Varuni Khosla & Brinda Das­gupta

New Delhi | Ben­galuru: Fi­nan­cial tech­nolo­gies and learn­ing so­lu­tions are this ap­praisal sea­son’s win­ning bets at star­tups in In­dia, where last quar­ter’s cur­rency swap and the gov­ern­ment’s vis­i­ble drive to­ward dig­i­tal trans­ac­tions may help dis­lodge mar­ket­place uni­corns as bul­ge­bracket pay­mas­ters.

The re­ver­sal in the for­tunes for em­ploy­ees at dig­i­tal mar­ket­place plat­forms, ser­vice and prod­uct ag­gre­ga­tors and real es­tate search star­tups co­in­cides with en­hanced fo­cus on dig­i­tal trans­ac­tion pro­cess­ing: In­tu­itively, this guided shift in pur­chas­ing be­hav­iour of a hith­erto cash-de­pen­dent na­tion would have trans­lated into more rev­enue for the es­tab­lished star­tups. How­ever, lin­ger­ing ques­tions over their busi­ness mod­els and vis­i­bil­ity on prof­its have turned in­vestors in th­ese busi­nesses more cau­tious, lead­ing to prospects of muted pay in­creases, say con­sul­tants.

“Em­ploy­ees in mar­ket­place star­tups may not see fat in­creases this year. But oth­ers in the fin­tech and ma­chine-learn­ing space are seek­ing ta- Pay­day Nears But top per­form­ers and crit­i­cal re­sources will get rich re­wards Sec­tors that will shine will in­clude fin­tech and ma­chine-learn­ing space

lent on a war-foot­ing. Peo­ple in th­ese com­pa­nies will be re­warded and the pay in­crease may be in dou­ble dig­its,” said Jap­preet Sethi, co-founder of YoS­tar­tups, which pro­vides con­sul­ta­tion ser­vices to star­tups.

In 2016, av­er­age in­cre­ments at star­tups and ear- ly-stage com­pa­nies were fore­cast at 15.6%, up from 14% in 2015. In 2017, how­ever, bar­ring com­pa­nies built around the idea of trans­ac­tion pro­cess­ing and fi­nan­cial tech­nol­ogy, most star­tups will in­crease salaries at a far slower rate, es­pe­cially after hor­i­zon­tal con­sol­i­da­tions en­hanced avail­abil­ity of qual­ity ta­lent amidst more fund flow. Top per­form­ers and crit­i­cal re­sources, how­ever, may get rich re­wards.

“The days of rais­ing ad­di­tional rounds of fund­ing merely based on a plan are over. Peo­ple are now struc­tur­ing em­ployee re­mu­ner­a­tions around as much as 50% of to­tal com­pen­sa­tion as per­for­mance-linked pay, which is re­leased to key em­ploy­ees only on the achieve­ment of agreed re­sults,” S Venkat of on-call CFO firm MyCFO told ET. To man­age staff ex­pec­ta­tions and si­mul­ta­ne­ously hold down cur­rent fixed costs, in­vestees are of­fer­ing stock op­tions to key em­ploy­ees, Venkat said. Across com­pa­nies such as fur­ni­ture re­tailer Pep­perFry, top per­form­ers may get up to 25% in­cre­ment and pro­mo­tions while beauty web­site Nykaa will give out the same in­cre­ments as last year — be­tween 12 and 20%. Pep­perFry has also in­creased the bonus pay­out fre­quency to ev­ery quar­ter from two. “This way, top per­form­ers will be re­warded more fre­quently,” said Ashish Shah, founder of the com­pany.

Ad­di­tion­ally, star­tups this year will be more se­lec­tive about their pay­outs as their abil­ity to pay has shrunk. “Em­ploy­ees with av­er­age or less-than-av­er­age per­for­mance may only look for­ward to min­i­mal in­cre­ments that have been ad­justed for in­fla­tion,” said Mervyn Raphael, man­ag­ing di­rec­tor of global hu­man re­source man­age­ment con­sult­ing com­pany Peo­ple Busi­ness.

At Ratan Tata-backed Blue­Stone, top per­form­ers will be iden­ti­fied for train­ing and de­vel­op­ment. The com­pany is tak­ing suc­ces­sion plan­ning se­ri­ously to groom the next level of lead­er­ship. It will look to nom­i­nate up to 35 top per­form­ers for tech­ni­cal and man­age­rial skill de­vel­op­ment pro­grammes.

On­line mar­ket­place ShopClues is also tak­ing the up­skilling ap­proach. The com­pany will iden­tify and re­ward strong per­form­ers, eval­u­at­ing train­ing so­lu­tions re­lated to re­train­ing and train­ing. “The train­ing will be rel­e­vant to em­ploy­ees’ fields, and will be done keep­ing in mind fu­ture goals and re­quire­ments,” said Babu Vit­tal, HR head at ShopClues.

Star­tups will be more se­lec­tive about their pay­outs this year be­cause of fewer funds

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