(A) Are you a thirty-something in a mid- or senior-level position?
(B) Do you work in a product and tech role in a series-B or above company?
(C) Saw a salary hike of 30% or more for each of the past three years?
(D) Do you earn more than Rs 50 lakh (~$61,000) per annum?
If you’ve answered ‘yes’ to most of the questions, you may have a problem on your hands. You could find yourself among a cohort of professionals whose salaries are out of sync with the dramatically different startup environment. Put simply, as an asset you might be overvalued in the same way your startup once was.
In the absence of a “valuation correction”, you might even be an “unhireable”.
While a small number of such professionals can be found in most well-funded startups, their numbers are strongest in growth-stage startups like used-car platforms like Cars24, in edtechs like Unacademy, in foodtechs like Zepto, in ride-hailing companies like Ola or in social commerce startups like Meesho.
Between 2020 and 2022, venture investors pumped billions of dollars into startups whose founders and leaders offered up the mythical “hypergrowth” narrative.
Those startups, in turn, pumped money to hire and grow a layer of mid-level and senior-level executives whose jobs in turn were to deliver on the hypergrowth narrative they had sold to investors.
Salary hikes were limited only by imagination. Hikes of 50% were par for the course. “We have placed people with 100% hikes, people could ask anything they want, and it was given,” said Jerry Jose, principal consultant for the tech sector at Native, which specialises in startup hiring.
Cut to the present. If overvalued startups are widely recognised as a problem, can overvalued employees escape the same fate?
“You don’t see this problem in any other traditional sector. This is peculiar to startups,” Jose added.
There are about one million people working in startups in white-collar roles, estimated Anshuman Das, the founder of Longhouse Consulting, also a talent search firm. As many as 15-25% of those might be in the “unhireable” zone today as a result of their salaries, estimate many founders and human-resource (HR) recruiters. This is even more pronounced in some roles. “In product and tech, 20-30% are in this category,” said Srikanth Iyer, a serial entrepreneur and co-founder and chief executive (CEO) of Homelane, an online home-interior-design platform valued at $272 million.
Like with their formerly overfunded startup employers, the demand-supply equation has reversed for overvalued professionals. From having multiple offers with gratuitous salary hikes to, well, the sound of crickets.
“Hiring mandates have fallen by a fifth,” said Jose.
It’s not just the number of jobs on offer that is falling, so are salaries. Younger and less-funded startups down the totem pole—like Series A or B—simply cannot afford people whose salaries were bid up in a different era.