Indian Startup Staff Witness 8-12% Salary Surge in FY23, Reveals Elevation Capital Study

• ByStartupStory     |    August 10, 2023

A recent report by Elevation Capital has revealed that employees in the Indian startup sector witnessed an average salary increase ranging from 8% to 12% during the fiscal year 2022-23. The Startup PayPulse Report 2023, published by Elevation Capital, attributes this salary increment range to a variety of factors, including individual and company performance, talent level and quality, as well as geographical location.

The report underscores the continued significance of performance, accounting for 50% of the weightage in determining salary increments. Moreover, taking on additional responsibilities and receiving promotions contributed to approximately 20% of the salary increment equation.

In response to the economic challenges posed, the report highlights that some companies deferred salary hikes and instead offered new stock grants in place of cash increments for leadership positions. This strategy, particularly relevant for roles such as CXOs and function heads, reflects a pragmatic approach to compensation.

Kallan H, VP – Talent at Elevation Capital, noted, “In the face of macro challenges, Indian startups are showcasing adaptability by offering inflation-led salary increments to attract and retain talent. However, the variation is significant, with technology professionals in small to mid-size startups seeing moderate increments. For leadership roles, we are seeing compensation correction and restructuring as well as new stock grants instead of cash increments.”

Regarding Employee Stock Ownership Plans (ESOPs), the report indicates that 80% of companies follow a four-year vesting cycle, with the remaining 20% having a vesting period extending beyond four years. ESOPs typically constitute 10-50% of the cash component offered to candidates for roles ranging from entry to mid-level positions in startups at different funding stages, from Seed to Series B.

In light of the relatively subdued cash increment trends observed in the previous financial year, half of the companies explored the option of providing additional equity grants to their leaders.

Dipesh Jain, AVP – Talent at Elevation Capital, emphasized the market’s focus on specific roles amidst a rich talent pool of mid to senior-level executives. He mentioned, “With a significant talent pool of mid to senior-level executives available in the market, companies are focusing their efforts on a select few roles, investing more time to ensure the perfect fit. The shift in the market situation has led to a correction in salaries, though largely at the leadership level,”

As the startup landscape navigates through evolving economic conditions, this report sheds light on the strategies employed to attract, retain, and incentivize talent within the Indian startup ecosystem.

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