Rituparna Chakraborty of TeamLease sheds light on the startup hiring boom and the role startups play in the broader economy. Edited excerpts from her interview to ET Now's Tamanna Inamdar:
Tamanna Inamdar: Data shows unemployment is growing, but on the other hand startups are taking the talent acquisition game to quite another level. What is your take?
The entire tech and digital universe has taken off on the trajectory that has been exponentially boosted by the pandemic. A lot of startups were already well-poised, and now a lot of youth who have spent years skilling themselves in this particular area are going to benefit from it.
In recent years, tech startups have impacted lives not just in the area of technology but all across. There are many startups that have actually enabled the formalisation of the workforce.
In the fintech industry, with the advent of new tech startups, there is an emergence and resurgence of a great many organisations. I think it augurs well because we need this pipeline of startups. We know that there would be a certain percentage of failure, but it is actually leading to innovation.
It is transforming the nature of jobs as well, benefiting the youth. India always has struggled with a wage problem rather than just a jobs problem. With the emergence of the startup ecosystem, I've seen that now it is not just about the quantity of jobs. They have also been able to influence to a large extent the quality of jobs.
Youths who would otherwise have struggled without dignity of work or without some basic entitlement to wages, are now finding the flexibility as well as the opportunity to earn much higher than what they used to.
So I think it is brilliant, and not just the valuation part. It is actually bringing out a lot of youth from the despair of a jobless existence.
Some of these startups will impact the smaller cities as well. Some ideas seem promising and would probably impact the youth even in the hinterlands.
While the pandemic has had its negative impact, if this trend continues, we will see more and more opportunities emerging for the youth. And this will not be limited just to the tech world. Some of the business models provide opportunities to only higher-level technology experts, but also to a lot of people on the ground whose lives can be transformed.
I think it augurs well for us. High time India had this resurgence.
As for the startup story as a vehicle for broader economic revival, what do we need to now see for their sustainability and wider involvement?
I often use this voting machine versus weighing machine analogy. It means that exuberance around the startup ecosystem initially resembles the impact of standing on a voting machine. However, in the long run, we all know that the weighing machine is what essentially where the rubber meets the grass.
We know that given the mortality rate of organisations, there is only going to be a certain percentage of them who will survive and grow in the long. But this mortality rate cannot be a case against a resurgence.
As a matter of fact, in spite of the possibility that some startups may not sustain in the long run, I think India deserves to go through this phenomenon. While global majors like Facebook and Google have been powered by Indian engineers, India itself hasn't still been able to create organisations of that stature.
But at the moment I think we have a shot at being able to create them. So in spite of there being a challenge in terms of the sustainability, I think this momentum should not stop.
As for the impact of all of this on employment, today’s youth have already reached the taxi-cab relationship with jobs. It means that especially amongst the youngsters the average tenure in a job — when they are entering the job market or between zero to three years — is about 12 months. Despite that, from an employment perspective, they are gaining valuable experience doing a job. They are also able to enjoy a certain wage premium which they may not have enjoyed if they had stuck to an informal sector job.
This also improves the purchasing power capacity of a wider range of our youth today. And all of that plows back into the economy.
When the ecommerce resurgence happened, there were many organisations in that space. We had delivery agents and boys deployed all over. A consolidation has set in now, but I am yet to find a delivery boy who has been unemployed. If anything, they have only actually moved on to working for larger organisations, maybe more stable organisations. But startups are where they had started earning.