Veterans not Keen to Jump Ship to Fight for Startups
Senior talent chooses job security above fat pay or startup experience
Mumbai: A veteran in the consumer goods industry recently got an offer to join an ecommerce major at a top position. He rejected it summarily. Another executive who was identified by a startup to hire as its corporate affairs head suddenly got cold feet. In his case, the company in question had very recently raised funds and was doing well, but that didn’t provide the security he wanted.
“Startups are unstable,” he told the recruiter mandated to carry out the search.
What were the hottest CXO jobs until a few months ago are now increasingly getting the cold shoulder from potential employees, as startups, notably in the showpiece ecommerce segment, wade into an uncertain environment. Funds have become hard to come by for homegrown companies slashed valuations, layoffs and management upheavals contributing to overall uncertainty in sector
to 50% increase in backouts/ declines
work culture another put-off
through taking much longer to close
with greater emphasis on variable, another problem
and valuations have shrunk, even as the competitive intensity in the markets they operate in refused to ebb with deep-pocketed foreign rivals continuing to bankroll their Indian operations. Layoffs and management upheavals have become fairly common.
Top executive search firms such as Transearch, Longhouse Consulting, RGF Executive Search and Antal International said they were finding it tough to convince candidates to sign up for CXO roles in ecommerce companies and other startups. In recent months they have recorded up to a 50% increase in offer rejections. Even when a candidate is ready to join, it is taking longer to close the process.
“When times are good, everyone wants to jump in. When things slow down, the music stops,” said Sandeep Murthy, partner at venture capital firm Lightbox Ventures.
For senior talent, job security has become far more important than the excitement of working at a new-age company offering a fat pay packet along with generous stock options, which though come embedded with great risks.
However, companies are waiting for the GST rollout, expected sometime this year, before finalising plans.
This also applies to Indian and foreign companies that made investments based on the 11.5% duty differential between locally made products and imports.
“They have asked for long-term stability of policy, but the main issue is whether if they manufacture in India, they would not be at a cost disadvantage compared to earlier,” Sundararajan said.
“The GST Council is still evolving, so we can’t categorically say what kind of view they will take.”
The council, a representative body of the Centre and the states, will decide the GST rates. The key issue will be coping with the transition as GST takes effect, Sundararajan said.
Mindful of the situation, the department has set up an Invest India arm to handhold companies, Sundararajan said.
“We have very categorically told them that India is open for investments and that we’re there to support them,” she said.
The key issue will be coping with the transition to GST, said Sundararajan