By Caitlin Allen, Jun 15, 2022 5:00:00 AM
The investing and hiring sprees of recent years are tech history. Amid inflation, a looming recession, and VC warnings to conserve cash, startups have paused hiring — except for engineering roles.
As recently as early May, engineers who switched jobs could expect a 12% to 15% pay bump, and 4% to 6% raises just by staying put, according to OpenComp data. While the salaries engineers can command have shifted dramatically since then, engineers are still in high demand and the competition for them remains fierce.
Secrets to Hiring Engineers in a Recession: Headcount Planning Like A Pro
How can startups secure the engineers they need to keep growing while tackling today’s urgent business priorities: conserving cash, and extending runway? Best practices are all built on headcount plans built on pay ranges built on reliable data.
We recently surveyed 500 high-growth engineering leaders across the U.S. to find out. Today, we are excited to release our analysis, “Secrets to Hiring Engineers in a Recession: Headcount Planning Like A Pro.” What follows is a high-level overview of our findings.
The Hiring Landscape
Companies across all growth stages say hiring engineers is still a priority. And the bigger a company gets, the more engineers it needs.
77% agree that company leadership still supports engineering recruiting and hiring.
Company leadership views engineering talent as business-critical, across all stages of company maturity, even in the current economic environment.
More than 75% of companies need to hire more than 5 engineers this year, even as they pause hiring for other roles. Not a shocker: The number of engineers that companies need to hire increases as they grow.
More than 75% of companies need to hire more than 5 engineers this year.
Barriers and Challenges
Compensation and competition are the biggest barriers to hiring engineers. The more mature a company becomes, the more likely it is to understand that compensation data can help address common barriers.
Software and senior software engineers are the hardest positions to hire, followed by hardware and security engineers. Mobile and machine learning engineers are the easiest to hire.
It's 12% easier for companies with less than 50 employees to hire senior software engineers than any other company size.
Why Engineers Decline
Engineering candidates reject offers most often because of low base compensation (48%) and lack of growth opportunities (35%). Companies can’t increase the cash component of offers as readily as they have been.
That’s where emphasizing value propositions, non-comp benefits, and career progression can help sway candidates. Non-competitive compensation data causes all reported barriers to finding and hiring top engineering talent.
With competitive compensation data, it’s possible to stand out in a competitive job market, advocate for budget to compete for top talent, and catch qualified talent’s attention.
Reliable compensation data and communication can help employers stand out from the competition.
77% of respondents at least somewhat agree that equity matters more than anything to engineering candidates.
Great news for companies who are protecting cash: Equity matters more than cash to top engineers. This news also presents a strategic opportunity for startups versus FAANG because engineers make about the same cash regardless of where they work — provided they can articulate compensation’s value.
Download the report for the full analysis, tips for communicating the value of compensation, and the latest tools for headcount planning like a pro.
Caitlin Allen is VP Marketing at OpenComp and has served in similar roles at Happy Returns, Lyft, and Andreessen Horowitz. She also writes about topics including marketing, sales compensation, and happiness. Connect with her on LinkedIn here.