Hiring activity in Indian enterprises strengthens significantly in 12 months leading up to their stock market listing, commonly known as Initial Public Offering (IPO).
According to exclusive data shared by specialist staffing firm Xpheno, Indian companies bound for IPO have shown a 12-month headcount growth of up to 25%. The employee strength in small companies, with three-digit headcounts, grew by an average of 8% over a one-year period. In contrast, medium-sized companies (with 4-digit headcounts) saw their workforce increase by up to 13%, while large companies (with 5-digit headcounts) reported an average growth of 18%.
Notably, the context of each enterprise varies significantly depending on the factors such as industry, enterprise age and IPO size.
According to Anandorup Ghose, Partner, CHRO Programme Leader, Deloitte India, during the pre-IPO period, companies ensure that the core management team is ring-fenced with equity or other awards in the run-up to the IPO and beyond. Additionally, IPO-bound firms verify that critical roles or skill sets are adequately staffed, thereby assuring that the company possesses the right talent for the future.
Among various job roles in IPO-bound enterprises, entry-level hiring has witnessed a significant surge, with growth ranging from 5% to 15%. In contrast, recruitment for mid-senior level roles has grown by 4-8%. However, hiring for senior management roles has remained stagnant, according to the specialist staffing firm mentioned.
Furthermore, during the pre-IPO preparatory period, such firms have reported collective gross hiring of approximately 10,500, including backfills and net additions. These enterprises have also managed attrition, with a collective exit volume of around 3,500.
Notably, with net headcount growth of 7,000 net, about 68% of gross hiring was focused on capacity expansions during the pre-IPO phase, Xpheno said.
Neeti Sharma, CEO, TeamLease Digital said pre-IPO is a prime time for companies to attract highly skilled and experienced talent, as an IPO can offer employees significant long-term growth and benefits.
“IPO-bound companies prioritize adding talent with diverse skill sets in domains such as finance and technology to drive growth and innovation,” Sharma added.
Among the upcoming IPOs of Zepto, Meesho, Ather Energy, boAt, and PhonePe, the collective gross hire count exceeded 15,500 over the last 12 months. These companies also reported exits of backfilled employees of around 5,500 during this period. However, the collective expansion hiring by this cohort was a little above 10,000.
In the first-six months of 2024, these startups clocked gross hires of 8,500, comprising 3,000 backfills and 5,500 net additions. In contrast, the gross headcount declined to 7,000 in the second-half of 2024, with 2,500 backfills and 4,500 net additions.
Notably, the current job openings at these new-age companies stand less than 1,000. Nevertheless, as these companies prepare for their IPOs, there could be surge in hiring activity in the upcoming months and quarters, according to Xpheno.