I wrote a paper during the delta wave covering talent issues that many startups were and are still facing in India. This paper appeared as part of a special issue in the International Journal of Global Business and Competitiveness volume 17, pages 64–72 (2022).
The main issue that I tackled using data from privatecircle.co is the increasing tech talent expenses between listed IT Services companies and funded startups.
Abstract of the paper
Information technology (IT) services industry has become a mainstay for tech talent in the last few decades. Recently, the emergence of startups in the high-tech sector has also contributed to the demand for talent in the sector. This has led to a situation, where both incumbent listed companies and venture capital-backed technology startups, compete for technology talent in the ecosystem. We probe this from the convergence in average per employee labor costs between listed IT services companies and funded entrepreneurial startups (less than 10 years old) in the sector. We work on a stylized sample of 36 companies and find that listed IT services companies have continued to remain large buyers of talent and are consistently paying higher wages than startups. Whereas the rate of growth in average salaries among technology startups is higher than listed counterparts during the study period. Such a rate of growth of average wages suggests that there is potential for startups to bridge the gap with listed companies’ salaries. The narrowing of the salary differential gap may affect the competition for talent in the ecosystem, impacting both startups and larger companies. Such competition can challenge listed companies’ profit and growth over the long term. But such a change hinges on startups’ ability to raise further funding to support expenses.