By OpenComp, Jun 15, 2022 5:56:13 AM
SAN FRANCISCO (June 15, 2022) – Despite signs of an economic slowdown in tech, high-growth companies are still looking to fill crucial technical roles this year while conserving spend in a volatile market. According to new research from compensation intelligence provider OpenComp, engineering candidates most often decline job offers due to low base salary, which means hiring managers will need best-in-class data to ensure offers are competitive in the market without spending beyond tightened budgets.
Released today, the “Secrets to Hiring Engineers in a Recession - A Startup Report” surveyed 500 engineering leaders and hiring managers from high-growth companies to reveal the biggest barriers and unlock the secrets to attracting and hiring top engineering talent. While some tech giants like Meta, Microsoft and Uber have announced hiring freezes in recent weeks, the study found that 42% of pre-IPO companies are still looking to hire between five and 10 engineers this year, with another 22% needing up to 20 engineering roles this year. With VC funding slowing down, startups especially need to balance burn rate without compromising recruiting needs.
OpenComp found that over 70% of engineering leaders believe cash compensation matters most to candidates, and 62% said they emphasize pay to make offers more attractive to engineering candidates. Yet, the top reason cited for candidates rejecting offers was too low of a base salary.
“The battle for talent became so aggressive during the pandemic that we saw many tech companies ignore their set pay ranges to fill open roles,” said Thanh Nguyen, CEO and co-founder, OpenComp. “But with the public market shifting, it’s more important than ever for startups to develop and stick to pay ranges based on reliable market data without compromising the ability to attract talent. Compensation platforms like OpenComp offer a competitive advantage to employers crafting offers for top engineers, as they learn exactly what companies of similar stage and size offer. Our customers increase offer acceptance to 83% after leveraging our market data – 18% above the industry average.”
In addition to cash, over 78% of engineering leaders at least somewhat agree or strongly agree that equity is important to engineering candidates. As tech stocks face volatility, pre-IPO companies can also leverage equity to entice technical talent while conserving cash and extending runway, as many newly hired employees of public companies sit on options that have lowered in value.
“With so many public company employees sitting on underwater options, startups become more attractive with equity that has room for growth,” added Nguyen. “Technical candidates can usually land not only a high salary, but also stock options that look more appealing than their current package that’s decreased in value. Hiring managers need best-in-class intelligence and tools to craft winning offers and articulate their value to candidates.”
The report further details how engineering leaders are sourcing candidates and attracting top talent. Download the full report here.
To learn more about OpenComp and sign up for free, please visit http://www.opencomp.com.
This survey was conducted using the online survey platform Pollfish. The sample of 500 individuals in the United States was surveyed between April 11, 2022 and April 12, 2022. The margin of error is 4.38% and no additional weighting was done to the initial sample. Pollfish’s survey platform delivers online surveys globally through mobile apps and the mobile web along with the desktop web.
OpenComp empowers high-growth companies to grow faster and smarter with compensation intelligence. More than 3,000 companies use OpenComp to attract and empower top talent in fair, consistent ways, including Calm, DataRobot, Discord, DrChrono, Figma, Medium, Mosaic, Mux, and Reddit. Founded in 2021 by Thanh Nguyen and Nancy Connery, Salesforce’s founding HR team, OpenComp has raised $24 million in venture capital from J.P. Morgan, TIME Ventures (the investment fund for Marc Benioff), 8VC and more. OpenComp is available for free for organizations up to 50 employees, with tiered pricing and services for other organizations based on size and needs. Sign up at www.opencomp.com and get connected at https://www.linkedin.com/company/opencomp-llc.
Changemaker Communications for OpenComp