IDEAS home Printed from https://ideas.repec.org/a/spr/ijogbc/v17y2022i1d10.1007_s42943-022-00053-z.html
   My bibliography  Save this article

Competing for Technology Talent: Listed Companies Versus Funded Startups in India

Author

Listed:
  • Muralidharan Loganathan

    (Bharathiasha Technologies Private Limited (PrivateCircle.co))

Abstract

Information technology (IT) services industry has become a mainstay for technology talent in the last few decades. Recently, the emergence of startups in the high-tech sector has also contributed to the demand for talent in the sector. This has led to a situation, where both incumbent listed companies and venture capital-backed technology startups, compete for technology talent in the ecosystem. We probe this from the convergence in average per employee labor costs between listed IT services companies and funded entrepreneurial startups (less than 10 years old) in the sector. We work on a stylized sample of 36 companies and find that listed IT services companies have continued to remain large buyers of talent and are consistently paying higher wages than startups. Whereas the rate of growth in average salaries among technology startups is higher than listed counterparts during the study period. Such a rate of growth of average wages suggests that there is potential for startups to bridge the gap with listed companies’ salaries. The narrowing of the salary differential gap may affect the competition for talent in the ecosystem, impacting both startups and larger companies. Such competition can challenge listed companies’ profit and growth over the long term. But such a change hinges on startups ability to raise further funding to support expenses.

Suggested Citation

  • Muralidharan Loganathan, 2022. "Competing for Technology Talent: Listed Companies Versus Funded Startups in India," International Journal of Global Business and Competitiveness, Springer, vol. 17(1), pages 64-72, June.
    • Handle: RePEc:spr:ijogbc:v:17:y:2022:i:1:d:10.1007_s42943-022-00053-z
    DOI: 10.1007/s42943-022-00053-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s42943-022-00053-z
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s42943-022-00053-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. N. Berger, Allen & F. Udell, Gregory, 1998. "The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 613-673, August.
    2. Krishna Satyanarayana & Deepak Chandrashekar & Bala Subrahmanya Mungila Hillemane, 2021. "An Assessment of Competitiveness of Technology-Based Startups in India," International Journal of Global Business and Competitiveness, Springer, vol. 16(1), pages 28-38, June.
    3. Kim, J. Daniel, 2018. "Is there a startup wage premium? Evidence from MIT graduates," Research Policy, Elsevier, vol. 47(3), pages 637-649.
    4. Unger, Jens M. & Rauch, Andreas & Frese, Michael & Rosenbusch, Nina, 2011. "Human capital and entrepreneurial success: A meta-analytical review," Journal of Business Venturing, Elsevier, vol. 26(3), pages 341-358, May.
    5. Gargi Bhattacharya & Sushil Kr. Haldar, 2015. "Does demographic dividend yield economic dividend? India, a case study," Economics Bulletin, AccessEcon, vol. 35(2), pages 1274-1291.
    6. Farok J. Contractor & Susan M. Mudambi, 2008. "The influence of human capital investment on the exports of services and goods: An analysis of the top 25 services outsourcing countries," Management International Review, Springer, vol. 48(4), pages 433-445, April.
    7. Davila, Antonio & Foster, George & Gupta, Mahendra, 2003. "Venture capital financing and the growth of startup firms," Journal of Business Venturing, Elsevier, vol. 18(6), pages 689-708, November.
    8. Joshi,Kshitija, 2020. "The Economics of Venture Capital Firm Operations in India," Cambridge Books, Cambridge University Press, number 9781108836340, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nikhil Ramkrishna Bandodkar & Renu Singh, 2022. "Small and Startup IT Firms, Information Chasms, and the Market for Acquisitions," Businesses, MDPI, vol. 2(3), pages 1-21, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Erik Lundmark & Anna Krzeminska & Dean A. Shepherd, 2019. "Images of Entrepreneurship: Exploring Root Metaphors and Expanding Upon Them," Entrepreneurship Theory and Practice, , vol. 43(1), pages 138-170, January.
    2. Andy Cosh & Douglas Cumming & Alan Hughes, 2009. "Outside Enterpreneurial Capital," Economic Journal, Royal Economic Society, vol. 119(540), pages 1494-1533, October.
    3. Chia-Ling Chang & Yen-Sheng Lee & Han-Kun Tien, 2021. "Does Venture Capital Affect Crowdfunding Performance?," Economic Review: Journal of Economics and Business, University of Tuzla, Faculty of Economics, vol. 19(2), pages 53-64, November.
    4. Tevfik Aktekin & Dev K. Dutta & Jeffrey E. Sohl, 2018. "Entrepreneurial firms and financial attractiveness for securing debt capital: a Bayesian analysis," Venture Capital, Taylor & Francis Journals, vol. 20(1), pages 27-50, January.
    5. Seung Hoon D. Chung & Simon C. Parker, 2023. "Founder affiliations: jobseeker reactions and impact on employee recruitment by start-up ventures," Small Business Economics, Springer, vol. 61(1), pages 259-283, June.
    6. Daniel Hain & Sofia Johan & Daojuan Wang, 2016. "Determinants of Cross-Border Venture Capital Investments in Emerging and Developed Economies: The Effects of Relational and Institutional Trust," Journal of Business Ethics, Springer, vol. 138(4), pages 743-764, November.
    7. Waheed CHICKTAY & Brian BARNARD, 2019. "Venture Capital Process: Opportunity Selection, Monitoring, Capital Rationing, and Deal Flow," Expert Journal of Finance, Sprint Investify, vol. 7(1), pages 22-38.
    8. Epure, Mircea & Guasch, Martí, 2020. "Debt signaling and outside investors in early stage firms," Journal of Business Venturing, Elsevier, vol. 35(2).
    9. Masatoshi Kato & Yuji Honjo, 2020. "CEO Succession and New-Firm Performance: Does Successor Origin Matter?," Discussion Paper Series 213, School of Economics, Kwansei Gakuin University.
    10. Rong Wang, 2021. "Understanding online equity funding ecology: a comparison of the greater Los Angeles area and Silicon Valley," Quality & Quantity: International Journal of Methodology, Springer, vol. 55(3), pages 1071-1090, June.
    11. Marc Cowling & Weixi Liu & Ning Zhang, 2018. "Did firm age, experience, and access to finance count? SME performance after the global financial crisis," Journal of Evolutionary Economics, Springer, vol. 28(1), pages 77-100, January.
    12. Colombo, Massimo G. & Grilli, Luca, 2010. "On growth drivers of high-tech start-ups: Exploring the role of founders' human capital and venture capital," Journal of Business Venturing, Elsevier, vol. 25(6), pages 610-626, November.
    13. Baeyens, K. & Manigart, S., 2006. "Who gets private equity? The role of debt capacity, growth and intangible assets," Vlerick Leuven Gent Management School Working Paper Series 2006-24, Vlerick Leuven Gent Management School.
    14. KATO Masatoshi & Nicolas LEGENDRE & YOSHIDA Hiroki, 2022. "Does VC Investor Type Matter? Determinants and effects of VC backing for new firms in Japan," Discussion papers 22117, Research Institute of Economy, Trade and Industry (RIETI).
    15. Shivalik Singh & M H Bala Subrahmanya, 2022. "The financial requirements of tech startups over its lifecycle in Bangalore: An analysis of why and how do they differ?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(4), pages 4123-4141, October.
    16. Tom Vanacker & Sophie Manigart, 2010. "Pecking order and debt capacity considerations for high-growth companies seeking financing," Small Business Economics, Springer, vol. 35(1), pages 53-69, July.
    17. Carolin Bock & Alexander Huber & Svenja Jarchow, 2018. "Growth factors of research-based spin-offs and the role of venture capital investing," The Journal of Technology Transfer, Springer, vol. 43(5), pages 1375-1409, October.
    18. Daniel Blaseg & Douglas Cumming & Michael Koetter, 2021. "Equity Crowdfunding: High-Quality or Low-Quality Entrepreneurs?," Entrepreneurship Theory and Practice, , vol. 45(3), pages 505-530, May.
    19. Masatoshi Kato, 2016. "Internal R&D and External Knowledge Acquisition of Start-up Firms: Exploring the Role of Entrepreneurial Human Capital," Discussion Paper Series 145, School of Economics, Kwansei Gakuin University, revised Jul 2016.
    20. Gaio, Cristina & Gonçalves, Tiago & Venâncio, Ana, 2022. "Cash holdings in start-ups: The role of founder sociodemographic characteristics," Journal of Business Research, Elsevier, vol. 139(C), pages 520-528.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:ijogbc:v:17:y:2022:i:1:d:10.1007_s42943-022-00053-z. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.