The recent Budget 2014 allocated over $1.6 billion to develop a better startup ecosystem in the country, much to the joy of all entrepreneurs & startups.
However according to a recent report by Aspiring Minds, newly minted engineers are hardly interested in working for early stage companies
The report is based on a sample of more than 120,000 students who graduated in 2013 from more than 500 engineering colleges across India.
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Only a measly 6% of the students want to work for startups. On the other hand more than 60% wanted to work for large, established brands.
Of the surveyed women seemed even keener on joining bigger brands and were less likely than men to be interested in SME’s and startups.
One of the many reasons for such a lack-lustre response is that working for startups is still not considered a respectable career choice by one’s family and peers. Startups tend to lack job security and the resources of larger firms, are many times harder to explain to people and do not command salaries comparable to corporates.
At a social gathering, you want to show off and tell people that you work for a big, famous company!
“At a social gathering, you want to show off and tell people that you work for a big, famous company,” says Varun Aggarwal, director at Aspiring Minds. “If you work for a big brand, your marital prospects are also better.”
India’s startup industry is still in its nascent stages. Countries with mature startup ecosystems tend to attract a lot more talent. Nearly 50% of American millennials wants to work for small companies with less than 100 employees. In China, 18% of students want to work for startups.
If you work for a big brand, your marital prospects are also better.
Indian startups’ identify finding talent as their number one problem. On the other hand, their peers in developed economies have mastered the art of marketing themselves to the youth, with perks such as free lunch and flexible work culture.
“Startups are unable to reach out to small colleges,” says Aggarwal. “Companies such as Wipro or Infosys go to 300-plus colleges for their annual hiring rounds.”
If it weren’t hard already, it turns out that only 1.9% of new graduates are both interested and employable by startups, according to the Aspiring Minds report.