Business

Around 60% Startups Paid Employee Bonuses Between April and November: RazorpayX Payroll Report

Editor Desk
By Editor Desk

The COVID-19 pandemic and ensuing lockdown has impacted many businesses and the worst hit have been the startups struggling to keep operations running. Around 70% startups have been impacted by the pandemic, according to a recent survey. Additionally, 68% startups are cutting down their operational and administrative expenses.

The pandemic got the startups to rethink their strategies both from a business and employee management perspective. Eight months into the pandemic, the startup ecosystem is beginning to get back on its feet, showing strong signs of recovery. RazorpayX, the neo-banking arm of Razorpay used ground-level data to analyse and uncover insights about the impact of COVID-19 on several aspects of Payroll in the startup ecosystem. Payroll is a company’s biggest line item, its single biggest expense; these insights are developed based on salaries and reimbursements made by startups on RazorpayX Payroll platform (Opfin) between April and November 2020.

Impact of COVID on Employee Salaries:

  • As companies try to ensure their survival by cutting costs, many startups resorted to slashing salaries and laying off staff. In April, 24% of the employees saw salary cuts. However, starting September, the impact of the pandemic has been easing out in parts and startups have been finding ways to revive their situation and improve their cash flows. In November, only 14% of employees were affected by salary cuts.

Impact of COVID on Hiring:

  • Young job seekers have been disproportionately affected – entry level jobs declined by 30-40% in the first four months of the lockdown. However, starting August, there’s been a slow but steady growth of 5% in startups hiring for entry-level roles, giving hope that young job seekers will gain a foothold in the COVID market, and not struggle much to find work.

  • Hiring for senior roles remained unaffected, 15% spike in hiring for senior roles between April and November.

  • Contractual hiring has made a big comeback during COVID. Startups are hiring professionals on a temporary or project basis to conserve cash and some may refrain from hiring full-time employees in the