2023 has been a turbulent year for European tech. Startups have had to shift away from “growth at all costs” to a tricky balancing act. They must be agile but also stable, growing yet profitable. People and reward leaders’ priorities have changed too.
Ravio has published a report on growth, hiring, and compensation trends from over 150,000 compensation datapoints across European tech companies. AIN.Capital shares key points of the report.
Hiring
- Startups have cut hiring by 30-50% in 2023, due to rising inflation, worldwide reduction in VC funding, and an almost-closed IPO window.
- Late-stage (Series C+) companies have dropped down the most — 31%, prioritizing stability rather than growth.
Attrition
- Attrition rates have increased for early and growth stage startups, due to increased need to retain top talents.
- However, late-stage companies still experience talent leakage at 18%, compared to previous year’s 22%.
Salary increases and equality
- Pay increases are down by almost 50% compared to last year. This year, the typical employee in a European tech startup can only expect an increase of about 4.8% compared to 8%.
- Whilst this is still above average across other industries and company types, it does pose a risk given the high importance of employee retention currently.
- Regarding equality of positions, only 19% of executives in Europe’s startups are women.
- We can that the gender pay gap reduces as the job level increases. However, the representation of women is still incredibly low at these higher job levels.
Benefits
Cash compensation is important, but it isn’t everything. Startups need to have a competitive total compensation package to attract and retain the best talent – and that includes benefits:
- The most-offered fringe benefit is private health insurance with 54%.
- Cycle to work scheme is 51%.
- Home office allowance is 51%.
- Professional development fund is 45%.
- Mental health service subscription is at 44%.
