Salary benchmarking in the modern technology climate

Michael Moretti our consultant managing the role

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

Aside from the fact that they've all had mass layoffs over the last couple of months, they are also some of the best paying tech companies to work for compared to the rest of the industry.

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? 

The average salary of a Product Manager at Google UK is £95,000, compared to the London average in the range of £65,000-£75,000. Naturally, considering budgets, salary benchmarking, and roadblocks from HR, many companies would struggle to accommodate salary expectations 30% above market rate.  All this begs the question; where do we go from here?  If we are looking at a market saturated with exceptional yet expensive talent, there are a few scenarios that will all play out at some point in different companies.  


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. 

Given the undeniable talent of these employees, workload and technical ability will not be too much of a concern. However, employers and talent teams may be tentative on this due to unproven people management and leadership skills that are required to have that sweet ‘senior’ title attached to them.  

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    

The general sentiment in the market currently is that the tech bubble has burst. Over-valuations of tech start-ups throughout 2022 came to a knife-edge correction in Q4. Guaranteed growth and the promise of ‘scalability’ are things of the past, and VCs are less keen to prop up non-profitable start-ups, partially due to macroeconomic factors. We have also seen a bear run across the crypto landscape. Despite this, technology salaries have continued to rise steadily.  

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. 

With UK inflation at its current rates, the lack of a pay rise over time is a pay cut. As inflated valuations are corrected, tech salaries in Q2 and Q3 could be frozen to accommodate this market recapitulation.   
Another possibility is that salary growth in the tech industry continues, and even accelerates, to attract the top talent on the market, with costs being reduced by companies in other areas. Investing in great engineering and product talent could be the spur that start-ups need to become commercially viable, and having worked in an ROI-driven environment previously could see senior Big Tech talent in high demand to make this happen. 

 Big Tech talent moves into the Fintech industry 

An exception to the rule here when talking about the tech bubble is Fintech, particularly the London market.

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.  

‘Progressive’ tech start-ups and scale-ups seem to have embraced this and taken it further, with the modern corporate landscape offering unlimited PTO, enhanced paternity pay, work from anywhere schemes, mental health, and wellbeing allowances – I could go on.   

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 

Another selling point that acts as a backbone to start-ups compensation packages are stocks, shares, and equity options. 

Speaking as a recruiter who often works with start-ups, pitching equity and shares is a sticky business. If the salary does not meet the candidate’s minimum expectation, it is very unlikely that the vague promise of a shares scheme and equity options will provoke them to take the application further. Companies can get around this by advertising a clear, concrete options scheme that provides more answers than it does questions.  

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? 

Salary benchmarking can be complicated by macroeconomic factors. We’re seeing this play out currently with high-income talent being unleashed onto the market, creating a dilemma that will particularly affect start-ups without the liquidity to afford to raise their salaries to match expectations. 

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.  

Partnering with Marks Sattin would give companies and all-in-one staffing solution, from advising on team structures, to salary benchmarking, to marketing, to finding that missing piece of the puzzle that will drive the team and product to profitability. 

For more information, visit our website, or reach out directly at aaron.jackson@markssattin.com 

09/02/23
posts

Related articles

What's the latest on recruiting senior finance and accounting professionals?
What's the latest on recruiting senior finance and accounting professionals?

Teaser

Finance & Accounting

Content Type

General

25/04/24

Summary

Over the years, we have developed a strong reputation as a leading Senior Finance and Executive Search firm. We’re proud to have well-established teams of finance and accounting recruitment cons

Teaser

Our employment update for senior accounting and finance professionals.

Read full article
Neil Burton

by

Neil Burton

Neil Burton

by

Neil Burton

How technology is impacting the future of risk and compliance jobs
How technology is impacting the future of risk and compliance jobs

Teaser

Governance

Content Type

Fintech

18/04/24

Summary

The role of risk and compliance in financial services  As a sizeable, growing portion of the financial services sector, risk and compliance play a vital role in ensuring that firms conduct busine

Teaser

With no signs of slowing down, strong risk and compliance is now more important than ever.

Read full article
David Clamp

by

David Clamp

David Clamp

by

David Clamp

What does the future hold for private equity?
What does the future hold for private equity?

Teaser

Executive Search

Content Type

General

18/04/24

Summary

Private equity (PE) is a growing industry that has always attracted ambitious top talent due to its high risk/high gain capital investment. Pre-covid, we saw the global private equity industry b

Teaser

Learn about emerging private equity job opportunities and more.

Read full article
Tracey Alper

by

Tracey Alper

Tracey Alper

by

Tracey Alper

jobs

Related jobs

Management Accountant

Salary:

£40,000 - £43,000 per annum

Location:

Manchester, Greater Manchester

Industry

Business Services

Qualification

Finalist / Newly qualified

Market

Financial Services

Salary

£40,000 - £50,000

Job Discipline

Qualified Finance

Part Qualified & Transactional Finance

Newly Qualified Finance

Contract Type:

Permanent

Description

Management Accountant Manchester £40,000

Reference

BBBH180470

Expiry Date

01/01/01

Terri Bishop

Author

Terri Bishop
Find out more
Purchase Ledger Clerk

Salary:

£30,000 - £32,000 per annum

Location:

Manchester, Greater Manchester

Industry

Manufacturing

Qualification

Part qualified

Market

Commerce & Industry

Salary

£30,000 - £35,000

Job Discipline

Newly Qualified Finance

Contract Type:

Contract

Description

If you are an experienced Purchase Ledger Clerk looking for a challenging role with the potential for significant career growth, we would love to hear from you.

Reference

BBBH180379

Expiry Date

01/01/01

Conor Brooks

Author

Conor Brooks
Find out more
Tax Manager

Salary:

£42,000 - £44,000 per annum

Location:

Bury, Greater Manchester

Industry

Business Services

Qualification

None specified

Market

Financial Services

Salary

£40,000 - £50,000

Job Discipline

Tax

Contract Type:

Permanent

Description

.

Reference

BBBH180466

Expiry Date

01/01/01

Aleksandra  Taranovskaja Find out more
Fund Controller - Private Credit Funds

Salary:

£65,000 - £75,000 per annum

Location:

London

Industry

Private Equity

Qualification

Fully qualified

Market

Financial Services

Salary

£70,000 - £80,000

Job Discipline

Qualified Finance

Contract Type:

Permanent

Description

Fund Controller - Specialist Private Credit Firm Seeking a dynamic and detail oriented Fund Controller to join a high calibre, cohesive and friendly team in a rapidly growing business.

Reference

BBBH179469

Expiry Date

01/01/01

Paul Roche

Author

Paul Roche
Paul Roche

Author

Paul Roche
Find out more
Finance Business Partner

Salary:

£60,000 - £65,000 per annum + Car Allowance + Benefits

Location:

Warrington, Cheshire

Industry

Energy, Resources and Industrial

Qualification

Fully qualified

Market

Commerce & Industry

Salary

£60,000 - £70,000

Job Discipline

Qualified Finance

Contract Type:

Permanent

Description

Exciting Finance Business Partner role based out of Warrington paying up to £65,000 + car allowance for a global energy organisation.

Reference

BBBH180341

Expiry Date

01/01/01

Nathan  Jones

Author

Nathan Jones
Find out more
Regulatory Reporting Accountant - Banking (Contract)

Salary:

£375 - £475 per day

Location:

London

Industry

Investment Banking & Capital Markets

Qualification

Fully qualified

Market

Financial Services

Salary

£350 - £450

Job Discipline

Qualified Finance

Contract Type:

Contract

Description

Would you like to join a small overseas corporate bank as an interim Regulatory Reporting Accountant (2-3 months contrct)? It's a well run finance department with great work life balance.

Reference

BBBH180315

Expiry Date

01/01/01

Paul Roche

Author

Paul Roche
Paul Roche

Author

Paul Roche
Find out more
Commercial Accountant

Salary:

Negotiable

Location:

London

Industry

Consumer & Retail

Qualification

Part qualified

Market

Commerce & Industry

Salary

£50,000 - £60,000

Job Discipline

Part Qualified & Transactional Finance

Contract Type:

Permanent

Description

A UK leading hospitality business is seeking a Commercial Accountant to manage accounts for their group of restaurants.

Reference

KD0606

Expiry Date

01/01/01

Kimberley Donovan Find out more
Accounts Payable

Salary:

Up to £50,000 per annum + Bonus

Location:

London

Industry

Private Equity

Qualification

None specified

Market

Financial Services

Salary

£50,000 - £60,000

Job Discipline

Part Qualified & Transactional Finance

Contract Type:

Permanent

Description

This is an Accounts Payable position for a Private Equity firm based in the Centre of London to take control of the whole Accounts Payable function.

Reference

BBBH180448

Expiry Date

01/01/01

Thomas  Steel

Author

Thomas Steel
Find out more
Interim Finance Manager

Salary:

£55,000 - £70,000 per annum

Location:

Leeds, West Yorkshire

Industry

Business Services

Qualification

Fully qualified

Market

Professional Services

Salary

£70,000 - £80,000

Job Discipline

Qualified Finance

Contract Type:

Contract

Description

Working with the business for a period of at least 12 Months, you will be a Qualified Accountant with strong group accounting knowledge

Reference

NH - 179937

Expiry Date

01/01/01

Niamh Hellewell Find out more
View all jobs