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Modern Tech Hiring

Market insights for startups that are hiring

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Nikunj Verma

Jul 19, 2017

Last week, we released a comperehensive salary report for Indian startups. Based on real salaries of our users between 2016–17, this report highlights some important insights about startup compensation in India.

For recruiters, knowing market salaries is as important as it is for professionals. Why? Simply because:

Your team defines your startup. And your compensation (salary+stocks) is a big factor in determining your team.

Knowing your numbers will help you in:

  • Avoiding unrealistically low salaries: A lot of startups (especially bootstrapped ones) set their salaries too low for the kind of people they want to attract. Remember the rule — the more you deviate from the market rate, the more “pull” your employer brand needs to have. Else your hiring will suffer.
  • Avoiding too high salaries: Paying too high a salary can attract wrong people while increasing your burn rate, which is lethal at an early stage.
  • Drafting your ESOPs plan. At early stage, salary cut an employee is taking is often an important variable to decide the ESOPs offered to him/her.

With that out, let’s delve deeper into the key insights:

Hiring techies is expensive. Especially in Bengaluru & Hyderabad

If you are in Bengaluru, you sort of sensed it already –  techies are about 20% more expensive than other professionals.

And it’s now official — Bengaluru is the most expensive place to hire techies. It’s about 35% more expensive than even Delhi!

tech-high-experience

Hyderabad sort of surprised us. At lower work experience, it offered salaries that were higher that even Bengaluru!

As work experienced increased, we observed that Bengaluru kept increasing its premium over other cities — indicating stronger pay hikes to techies over time.

Opening an office? Pune or Chennai might be better options

Unless you are looking to hire niche profiles, Pune and Chennai may be more cost effective to set up a presence in.

pune and chennai - nontech

With rise of so many coworking spaces (e.g. we work out of The Mesh), opening another office might not look so daunting as it did in the past.

Avoid talent war with well funded companies

Many recruiters on CutShort indicated a preference for candidates from the popular companies such as Flipkart, Amazon, Snapdeal & Google.

recruiters preference

While this is great, it also means everyone is going after the same talent pool. Thus making it more difficult and expensive to hire.

Tech paymasters

This means it pays to do your own research. Find companies that hire good talent but are not on the radar of other recruiters. Like Zoho and Wingify of 5 3 years ago.

So how much should you pay?

It depends on where you want to position yourself. If you want to understand the average salaries,  do try out this live salary calculator we released recently.

If you want to be competitive enough to target the top 15% of talent pool, you could use this quick reference table:

Years of Experience Bengaluru, Hyderabad Delhi, Mumbai Pune, Chennai Others
Fresher 5.5 4.5 3.8 3.1
1 year 7 5.5 4.8 3.6
2 year 9 7 5.5 4.4
3 year 11 9 6.5 5.2
4 to 6 year 12 – 17 10-12 8.5-11 6.2-9.0
6 to 8 year 18 – 21 12-16 11-14 9.0-12
8+ year 21+ 17+ 15+ 12+

Of course, these numbers might be too high or too less for you situation. You may decide to beat the market or set lower salaries, depending on your talent acquisition strategy.

You can check out the full salary report here

Hope this report was useful. Please comment below if you’d like to see data around any specific topic.

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Table of Contents

  • Hiring techies is expensive. Especially in Bengaluru & Hyderabad
  • Opening an office? Pune or Chennai might be better options
  • Avoid talent war with well funded companies
  • So how much should you pay?