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Fat pay cheques luring low and mid-level employees

According to industry estimates, attrition rate at start-ups at junior and mid-levels has soared as employees scout for fat pay cheques

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Sonal Desai
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MUMBAI, INDIA: Consider this: About 30 percent employees in mid-level positions at tech start-ups and e-commerce firms quit their jobs every year. In managerial roles, the average attrition rate stands is approximately 10 percent.

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The employee turnover rate across e-commerce and technology start-ups has soared to nearly double that of mature companies as employees switch jobs in search of generous pay packages and stock options.

Are these then the only reasons employees are giving up their cushy jobs? Here are 3 main reasons.

1. Fat pay cheques: According to industry estimates, attrition rate at start-ups at junior and mid-levels has soared as employees scout for better pay packages.

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It therefore comes as no surprise that even larger e-commerce firms have lost not only senior, but also mid-level and junior employees to the competition, albeit for a fee hike. This means that many people who joined the start-ups during the initial phase are not thinking twice before making the switch.

2. New business models: According to Mansee Singhal, Lead, HR consulting firm Mercer, rapidly evolving business models at start-ups is a major reason for high attrition.

For instance, in a bid to focus on its core business, real estate portal Housing.com recently fired around 200 employees after it shut four of its business verticals including the land, franchisee, commercial and luxury real estate divisions.

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Similarly, food delivery firm TinyOwl sacked more than 100 people as part of its restructuring program.

3. Mergers and acquisitions: Also as the e-commerce sector consolidates, more and more enterprises are taking the M&A route to scale-up.

According to HR consultancy firms, productivity, joint ventures and mergers are some of the reasons forcing companies to downsize their headcounts. The bottom line is simple: After a certain point in time, everybody is going to ask for returns on investment.

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