many startup are in the middle of bringing down Staff Even though they help with the displacement of the employee, find new ones to facilitate the terminated employees. Jobs, Aditya Narayan Mishra, Director and CEO, CIEL HR Services, said the firm is helping startups in outplacement. Inflationary trends and the threat of a global recession have prompted investors to be cautious about their investments.
Many have been off the rolls over the past few months as the external scenario forces investors to be cautious about funding. Experts in the HR services industry said that companies are outsourcing such tasks to run smoothly.
“Startups are asking their portfolio companies to cut costs,” said Mishra of CIEL. In order to cut costs, many companies have resorted to such businesses which are not giving the desired traction and hence, have resorted to layoffs. More than 10,000 employees have been laid off in startups this year. But letting employees go with only severance pay would damage the employer brand of the company. Hence, these companies are seeking professional help to lay off the employees. This trend will continue till investment activity picks up again. ,
Preeti Sawant, CEO and founder, consultancy Julesto Watts, said, “More than 80% of these layoffs have been due to cost-cutting, restructuring, financial constraints and automation. Marquee investors have driven portfolio companies to reduce costs and increase runway. As a result of this change, talent architecture and manpower planning have become imperative. ,
Depending on the level of automation and the operational load of the business model, payroll forms a major part of fund allocation, Sawant said. “The current employee-utilization rate is only 60-65% when it should be at 90-95%. Thus, in early and growth stage startups, accelerated talent architecture and manpower optimization is the key,” Sawant said.
Due to the ongoing external uncertainties, there is a liquidity crisis that is affecting all funded companies, an industry expert said on condition of anonymity. “Valuations have come down and companies are being forced to reevaluate their runways. We see a little bit of consolidation in almost all areas. Companies are raising questions about placements and these services should pick up in the next six months. We think it is going to be a huge number across the board,” said the expert. Jolstowats’ Sawant said the focus should be on short-term capacity planning and optimum staff utilization, to build sustainable and fair businesses and prevent scenarios like layoffs. “As the gap widens, there is also a need for ongoing mentorship to help people return to an excellent organization in a higher band. Only 20-30% can get placement as they are in the traditional trade band in pay. 40% of the population will not lose their jobs if the entire talent structuring, performance engagement, and displacement strategy is done six months in advance. We use applied analytics to outline relevant talent metrics and aid decision making They now have the opportunity to develop a more aggressive plan for talent acquisition, improvement and consolidation,” Sawant said.
Mishra said most candidates – whose average age is 25-32 years – are wary of going back to work in other startups. “They look for secure jobs in MNCs and established companies,” Mishra said.