Joining startups may be a bad idea for job seekers

By : |May 31, 2016 0

Job seekers may turn away from joining start-up companies, which has been a lucrative employment generator till recently, after companies such as Flipkart started laying-off workforce, and held off appointments indefinitely, say experts.

Flipkart was recently in news after it deferred joining dates for campus hires from IIM-Ahmedabad and IITs, as the company is undergoing a restructuring process. Many other startups, including InMobi, CarDekho and Hopscotch, have also reportedly deferred joining dates for campus hires. Combined with valuation cut of Flipkart by Morgan Stanley, and the concerns of an impending start-up bubble burst, can impact the reputation of the sector as a potential employee.

The overall investments in start-ups have also seen a sharp decline in the first four months of this year. Private equity investments dropped by 57 per cent in value terms and 25 per cent in volume terms during January-April 2016, according to a report by PwC. HR experts feel that the unpredictability can direct educational institutions from including start-ups in the placement basket.

“Startups would definitely lose sheen because of this fiasco,” staffing services firm TeamLease Services Assistant Vice President Sudeep Sen said. The job seekers might begin thinking that it is good to earn a little less and join an established organisation, rather than a startup, he added.

The startups, on the other hand, downplay the concern, and are confident of tiding over the turbulent phase. “Of course, it will have some adverse impact on startup attractiveness. However, each industry goes through a period of euphoria followed by calmness and then stability sets in. The startups will become attractive again once they become more stable,” e-commerce firm Zopper CEO and Co-Founder Neeraj Jain said.

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