Has winter come?

Everyone in (and on the sidelines of) the startup ecosystem has witnessed the euphoria of the year gone by with an unprecedented level of funds being infused in Indian startups. Amidst a pandemic, we’ve witnessed thriving businesses, which have thereby translated into a base shift of compensation levels and talent needs to keep up with the hyper growth yielding from such fund infusion.

I’ve been hearing prophecies about the winter setting in on funding as 2022 progresses. All in the midst of multiple venture capital funds announcing new funds with more capital to deploy. The year as it unfolds is likely to be a year of consolidation with larger cheques to the winners to shop for the best bargains.

In the layers beneath the headlines of fundraising lies a larger dilemma. The pace of growth of companies highlights the underlying need for the right talent to deliver on expectations of investors. The incremental compensation offered for the same talent pool results in higher and faster churn without justifying the incremental learning and growth given the lack of time to build new skill sets.

Early feelers are visible with quick resignations without adequate thought to the CV, with multiple opportunities at 2x jump in salaries being “the norm” lining up at the door. The restlessness and the lack of patience to learn and grow is further diminished with more outlets to escape.

Come winter and consolidation, redundancies begin to build in integrated entities with duplicate functions. How does one then rerate the compensation base or find positions for an expensive hire that didn’t get enough time to evolve into the designated role? After the great resignation, are we to witness the great deterioration in quality of work? As a demand market transitions into a supply market, the survival of the fittest yet again comes into play. However, the cost of the great shift may lead to more far-reaching changes for the workforce.