Rica Bhattacharyya, The Economic Times

The Pool of ‘unemployed CXO’ grows as Old firms refuse to match startup salaries

A recent article by Rica Bhattacharyya, posted on The Economic Times speaks about how Several CXOs laid off by startups are struggling to find new roles as companies are unwilling to hire them at the inflated salary levels and fancy designations that attracted them to startups in the first place. This situation has led to a growing pool of 'unemployed CXOs' in the job market. Many of these executives are finding it challenging to secure new positions due to their above-market compensation packages and lofty titles. 

Mumbai: Several CXOs laid off by startups are left stranded as traditional companies are not willing to hire them at inflated salary levels and fancy designations that lured these senior professionals to quit large companies for startups a couple of years ago. This has created a burgeoning pool of 'unemployed CXOs' in the job market, officials from startups, large companies and search firms said.

Many of these laid-off CXOs have made themselves expensive outliers with their above-market compensation packages and lofty titles doled out by small and young internet companies, they said.

"There are a large number of unemployed CXOs in the startup ecosystem - many of them are currently jobless, because neither are they willing to take pay cuts nor are they able to land a job in a large company that finds them overpriced," said cofounder of an edtech major. "Inflated salary and CXO designations are the two main reasons coming in the way of getting them another job," he added.

"We are flooded with resumes from CXOs and senior start-up professionals who are currently without a job, many of whom have unrealistic expectations that large companies are not willing to meet," said CEO of an executive search firm. "There are many resumes doing the rounds from startups such as Byju's, Paytm, Pharmeasy, Udaan, etc, who are difficult to place at their inflated salaries," he said.

The head of HR at a large finance and investment services company said they are getting a lot of resumes from companies like Paytm, Fi, Udaan, ZestMoney, Khatabook, DealShare, CoinSwitch and others, "but many of these senior-level talent are unemployable as their current salaries are hugely inflated and unrealistic". These CXOs need to do a reality check, search executives said.

"Mature industries have their compensation levels which are far lower than the digital sector," said the Managing Partner of a leadership search firm. "A lot of candidates who have lost jobs are sitting on the sidelines without jobs as they are unable to reconcile to the new reality."

A couple of years ago, startups went aggressive in hiring senior talent. Many were attracted from established companies, but they did not manage to find proper grounding in the startup ecosystem which then entered into a protracted funding winter and faced intense pressure to turn a profit, leading to layoffs.

With this increased supply in the job market, there is not much war for talent now.

"We will hire based on our budget for a role and fit them into our grade structure," said group president-HR at a diversified conglomerate. "So, if someone is a senior VP or CXO but as per our structure fits into a VP role, we will not elevate the person just to accommodate him/her... If the terms do not suit them, they are free not to accept."

In 2021-22, startups inflated salaries in many ways – including high bonuses and overvalued stocks – to attract talent from established companies.

"Now even as the valuation has gone down, very few companies have taken a down-round," said the CEO of an executive search firm.

"Candidates still have the illusion of high stock value when the reality is, they are overpriced and unaffordable."

For some, it was like a mirage created by a 3-4x jump in pay.

Many of these CXOs – in their early to mid-40s – earn salaries of Rs 5-7 crore and get attractive bonuses and perks, when they should not be more than Rs 1.0-1.5 crore, said the CEO of a startup who did not wish to be named.

Read more at https://economictimes.indiatimes.com/jobs/c-suite/pool-of-unemployed-cxos-grows-as-old-firms-refuse-to-match-startup-salaries/articleshow/108826276.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst