Salary benchmarking in the modern technology climate

Microsoft, Twitter, Meta, Google, Amazon - what do all these companies have in common? 

This is one of many reasons why roles in these powerhouses are so coveted. So, in the wake of these layoffs which seem to have burst the idealistic bubble of working for a FTSE 500 tech giant, swathes of talent are flooding the market. 

This seems like an excellent opportunity for smaller tech companies, FinTechs, and VC-backed startups to add high-fliers to their engineering and product teams.  

 But what do we do about their salary expectations? 

Displaced technology employees will take on more senior roles to match their salary expectations 

 We all know you must be the crème de la crème to work for these tech giants, that is no secret. For this reason, smaller companies may be inclined to go out on a limb and place talent in positions that are more senior than the years’ experience would suggest. 

HR and Talent will adjust interview processes accordingly, utilising case studies and interview questions relating to leadership and management skills. One issue pertinent to career progression within companies is people being given promotions due to performing well at mid-level, then not having the actual management skills to succeed in their newly appointed higher station. It is possible that the high earning laid off workforce will exacerbate this problem, resulting in management skills and qualifications becoming more valuable.  

There will be a market correction on technology salaries    

These two elements are inherently contradictory, which could indicate that tech salaries will end up being recapitulated. While it is unlikely that companies will be cutting their pay packages, a salary freeze is not off the cards. 

 Big Tech talent moves into the Fintech industry 

London Fintech funding has overtaken both New York and San Francisco, indicating no sign of slowing down. This could be an area of interest for displaced big tech talent.  

A hiring trend I have seen from senior Product Management talent is movement from major retail banks into series A-C FinTechs. With the major contender banks highlighting the shortcomings in traditional banking establishments, there are many niche gaps in the Fintech landscape that need filling. Big tech employees could mirror this migration into FinTech, as a consistently profitable industry pushing through macroeconomic turmoil.

Smaller companies will improve their benefits packages 

2022 saw work-life balance overtake financial compensation as the main motivating factor for jobseekers in the tech sector for the first time ever in the Marks Sattin Market Insights Report. This is a knock-on effect from the lockdown-induced popularization of remote and hybrid work.  

Whatever the reason, this is commonly attributed as a symptom of start-up culture. However, the impressive benefits on offer from tech giants cannot be understated. Most of the above benefits can also be found at Google, to continue the comparison, meaning start-ups and scale-ups will need to find other ways to attract top talent if the salaries cannot cut it. 

One trend that is developing as time goes by is the advocacy for a four-day working week, with 100 UK companies signing up to trial this back in November. It is looking ever more likely that this notion will be used as an attraction to hotly contested talent, along with other alternatives such as a fully flexible working week. How far will start-ups be willing to push the boat out? Only time will tell.

Equity, stocks, and shares 

The sentiment amongst candidates is that disclosing salaries on job ads is massively preferred. Clarity and transparency is the name of the game, and companies should extend this to all financial reimbursement, not just salary.      

How can Marks Sattin help you benchmark technology salaries? 

The above scenarios are by no means an extensive list of how things could play out. One option for start-ups would be to partner with a consultancy for salary benchmarking, particularly when building out a company’s core product and engineering team from a low headcount.