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ESOPs in ecommerce lose magic, top talent ignores the bait

Source | The Economic Times  : By Prachi Verma

NEW DELHI: ESOPs, an all-time favourite retention instrument among startups and ecommerce firms, are losing their magic to draw top talent. This is obvious with the chips going down for ecommerce and startups, and valuations hitting a new bottom. According to leading headhunting firms, Heidrick & Struggles, Longhouse Consulting, BTI Consultants India, Hunt Partners India, RGF Executive Search, the supply for talent at the top is drying up by almost 50%.

In just a year, it is getting tougher for search firms to attract top talent despite heavier toppings of ESOPs as part of compensation, these firms said.

“It was already a scramble for talent at the top. Unlike a year ago, it is getting even more difficult to attract top talent in the ecommerce and startup space,” said Vikram Chhachhi, a principal at Heidrick & Struggles’ Mumbai office. The valuations have become more realistic and caution reigns. “All this is making it more difficult to attract talent. Even the ecommerce companies have become more selective,” he added.

ESOPs in ecommerce lose magic, top talent ignores the bait


There are apprehensions among people regarding employee stock options. “About a year ago, where 100 people would be ready to take up jobs with heavy ESOPs at ecommerce companies and startups, today only 50 are ready to take a plunge,” said BTI Consultants India head JK Agrawal.

It is now becoming a challenge even to hire talent for levels below CXOs, say most headhunters. About 75% are not at all interested in joining ecommerce and startups, Agrawal adds.”This was not the case a year ago. Just everyone wanted to be part of the ecommerce story,” he said.

The talent which is still ready to risk it all is of wannabe entrepreneurs. Recently, Longhouse Consulting got a candidate who was trying to move from a leading consulting firm in the US at $350,000 to India with a drastic pay cut just to join a startup in India.

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