The Indian tech SME sector is expected to generate 7-9% of the overall FY23E tech industry revenue at $15-$20 billion. A Nasscom report predicts that the Indian tech SME sector will contribute to double-digit revenue growth to reach $40 billion by FY30. Furthermore, the sector is expected to close FY23 with 740,000 employees, with hiring for digital skills growing at twice the rate of traditional tech talent in FY20. In terms of hiring trends, 80% of early-stage startups plan to expand their workforce in 2023, with sectors like Agri/Agritech, AI/ML/Deeptech, Automotive, and E-commerce/delivery services leading the way. The majority of startups are focused on private MBA and engineering colleges and state universities for campus placements, with only 9.16% of startups looking to hire from premier institutions such as IITs and IIMs.
The Indian tech SME sector is projected to grow at a rapid pace, with a predicted revenue of $40 billion by FY30, a Nasscom report has revealed. In FY23E, the sector is expected to contribute 7-9% to the overall tech industry revenue, which could range from $15 billion to $20 billion. This is a significant increase compared to the pre-pandemic period, where the sector contributed only 4-6% to the industry. The report also estimates that the Indian tech SME segment will close FY23 with 740,000 employees, with digital skills hiring increasing twice as fast as traditional tech talent.
The report identifies key digital talent areas for the sector in FY23E, including cloud, digital engineering services, advanced AI/ML, analytics, IoT, and Blockchain. The North American market accounts for 50-55% of the Indian tech SME revenue, followed by Europe at 19-20% and the domestic market at 17-18% in FY23E. Additionally, SMEs are expanding their digital offerings to other regions such as the Middle East, Japan, and Australia.
Investments in cloud, migration, SaaS, and AI-based solutions have contributed to significant growth in digital technology SMEs since FY19. However, the sector still operates at a lower base compared to traditional SMEs. The report highlighted some growth headwinds faced by tech SMEs, including a lack of leadership pipeline, limited enterprise clients, and no sustained product innovation.
The report suggests that fast-tracking innovation, supportive government policies, and incentives, as well as dedicated SME-industry-academia connections, will help augment the sector’s growth and help achieve a double digital revenue growth vision by FY30E. Debjani Ghosh, Nasscom President, stated that the Indian tech sector has over 10,000 SMEs that provide traditional and digital services to global and domestic tech buyers.
Lastly, early stage startups will continue hiring despite the current trend of layoffs among larger corporations, according to a FICCI survey.
FICCI, in collaboration with Randstad India, an HR services provider, conducted a survey on startup hiring trends, with over 300 startups participating. Despite the ongoing layoffs at larger corporations, the survey revealed that 80% of early-stage startups with a workforce of fewer than 20 employees plan to expand their workforce in 2023. Startups that secured Series A and Series B funding, are well-capitalized and looking to hire new talent. These startups indicated that new project orders, additional funding from investors and expansion strategies were the primary factors driving their hiring decisions.
The survey found that while startups are planning to expand their workforce, 31.92% anticipate an increase in hiring by over 30%, while 28.08% plan to expand their teams in the 11-20% range. Certain sectors such as Agri/Agritech, AI/ML/Deeptech, Automotive, and E-commerce/delivery services are expected to increase their hiring in the 11-20% range, while Aerospace & Defense, Energy, and Healthcare startups plan to increase their hiring activities by over 30%. Healthcare (13%), IT/ITes (10%), Agri/agritech (8%), AI/ML/DeepTech (7%), Fintech (7%) and Manufacturing (7%) sectors were among those with the highest intent to hire.
Junior and mid-level positions are expected to account for most of the hiring, with approximately 37.97% of startups indicating that they intend to recruit more junior-level employees and 27.27% focusing on mid-level hiring. The Agri/agritech and automotive sectors plan to focus more on senior-level C-suite hiring.
The survey also revealed that better pay packages offered by larger corporations and concerns over job security in a startup were among the primary reasons for high attrition rates in the industry. Other factors contributing to attrition included a lack of clarity around career progression and credibility.
Interestingly, 57.28% of the surveyed startups believed that Employee Stock Option Pools (ESOPs) have the potential to serve as an effective instrument for retaining employees, while 41.49% of surveyed startups have already implemented ESOPs as a retention strategy.
Finally, hiring challenges faced by startups included a deficit in requisite skills, mismatches in salary expectations, and a reluctance among potential candidates to join a startup due to concerns over risk perception.
FICCI in partnership with Randstad India conducted a survey on startup hiring trends with over 300 startups participating. The survey revealed that startups are emerging as significant players in India’s employment landscape. Startups create a range of jobs as they grow and mature, and they contribute to India’s economic growth over the next few years.
The study found that the majority of early-stage startups (80%) are exhibiting strong hiring intentions, with 92% of them indicating that new project orders, additional funding from investors and expansion strategies will drive their hiring decisions. The study also revealed that startups are looking for permanent recruits, with 57.76% of them seeking permanent hires compared to 42.24% seeking temporary and gig workers.
The report also indicates that Hyderabad and Pune are emerging as the frontrunners in senior-level hiring, reflecting strong intent among startups in these regions. Middle-level hiring is expected to be prominent across cities such as Kolkata, Bengaluru, Mumbai, Chennai, Pune, and Delhi/NCR, while a considerable proportion of hiring activity across startups is expected to occur at the junior level, with Delhi/NCR, Bengaluru, Mumbai, and Hyderabad being the prominent cities in this category.
In terms of qualifications in demand, the survey highlights the need for candidates with relevant skills in various sectors. According to the report, Agri/agritech, AI/ML/Deeptech, Automotive, and E-commerce/delivery services are expected to increase their hiring in the 11-20% range, while Aerospace & Defense, Energy, and Healthcare startups plan to increase their hiring activities by over 30%. Healthcare (13%), IT/ITes (10%), Agri/agritech (8%), AI/ML/DeepTech (7%), Fintech (7%) and Manufacturing (7%) sectors were among those with the highest intent to hire.
Rohit Bansal, Chairman – FICCI Start-up Committee, and Co-founder, AceVector Group & Titan Capital, said that startups create a large range of jobs as they grow and mature, and their dynamic working environment provides an ideal training ground for aspiring entrepreneurs who then move on to create their startups. Bansal added that startups create jobs and economic opportunities beyond just the top cities and are key partners in India’s growth story.
In conclusion, the Randstad-FICCI Start-Up Hiring Trends Survey provides unique insights into the country’s evolving startup ecosystem, key trends, and its immense contribution to socio-economic development and transformation. The survey revealed that startups are emerging as significant players in India’s employment landscape, and with their pan-India footprint, they create jobs and economic opportunities beyond just the top cities.
Skill level and Campus Placements
45.21% of startups plan to hire semi-skilled employees, while 41.49% aim to recruit highly skilled professionals. Campus placements are a preferred method of hiring for startups, with 67.55% focusing on private MBA and engineering colleges and state universities. Only a small percentage of startups, 9.16%, are targeting premier institutions like IITs and IIMs for their recruitment needs.
Don’t miss interesting posts on Famousbio
