Salaries in India’s tech industry are finally beginning to cool as retention rates in startups improve and more employees hold on to their jobs. According to a recent survey conducted by VC firm Elevation Capital, startup employees are displaying increased job retention while salaries in the tech sector have experienced a cooling effect compared to the previous year.
The survey, which gathered insights from over 250 founders across various stages and sectors, indicates a notable shift in the dynamics of the startup ecosystem. Approximately 46% of the participating startup founders noted a decrease in employee turnover over the last year, signaling an improvement in retention rates. This trend is attributed to the moderation of tech salaries, with 50% of the founders observing that hiring for tech roles has become more straightforward.
Despite the ongoing funding challenges, founders express confidence in a more favorable funding environment in the coming years. 50% of respondents anticipate a ‘warmer funding season’ in the next 12 months. However, caution is urged as 55% of the founders believe it is prudent to maintain a financial runway of at least 18 months. Currently, one in three founders (33.5%) operate with a runway of less than 12 months.
Revenue growth is identified as a key priority for founders, with 65% highlighting it as a primary focus. Additionally, 58% aspire to achieve profitability in the near-to-medium term, with 18% already reaching this milestone. Founders are adopting a more financially sustainable approach, with 38% curtailing spending on marketing in the last year.
Mridul Arora, partner at Elevation Capital, advises founders to focus on product-market fit, manage customer acquisition costs, and optimize internal resources to drive sustainable growth and expand market reach across India and globally.
The survey also indicates a collective move towards greater financial sustainability and improved economics within the Indian startup ecosystem. Numerous large startups and venture-backed unicorns are targeting profitability.
With inputs from TOI.
