- Demand for tech talent is at an all-time high globally as the Great Resignation causes increased turnover, driving continued pressure on salaries and leading to significantly shorter hiring cycles.
- Hired’s report indicates that offering remote work options is necessary to compete for the vast majority of tech candidates and employers are adapting.
- The report warns companies to be highly transparent about their remote compensation and pay structures to avoid employee frustration and turnover.
Hired, the leading AI-driven hiring marketplace that matches tech and sales talent with top companies recently released its State of Salaries Report. Within the report, Hired examined its marketplace data to uncover how and why salaries have changed – specifically with the spike in remote work (since the beginning of 2019) – and how demand for tech talent has shifted across different markets.
The findings are based on the analysis of more than 525,000 interview requests and 10,000 job offers facilitated through Hired’s marketplace from January 2019 through June 2021. Hired also gained valuable insights from over 1,200 tech employees to provide companies with answers and guidance on how they can adapt to meet changing candidate preferences, revamp their hiring strategy, and thrive in the Great Resignation era.
During the pandemic, many workers reevaluated their career paths with a newfound perspective, which has led to high employee turnover and a spike in demand for top tech talent. In this fluid candidate job market, companies need to rethink their recruiting and hiring strategies and reframe staffing challenges as opportunities for innovation.
1. Demand for tech talent is at an all-time high globally as the Great Resignation causes increased turnover, driving continued pressure on salaries and leading to significantly shorter hiring cycles.
- The increased demand for more junior candidates to fill open roles and shift to hiring remotely in smaller markets has resulted in slightly lower average tech salaries in the U.S. in 2021 compared to 2020.
- Globally, average tech salaries for remote roles and candidates in smaller markets have seen the biggest increase.
- Companies are moving incredibly fast to keep up with high demand, with a record-low of 30 days to hire in the U.S. and 34 days in the U.K.
2. Offering remote work options is necessary to compete for the vast majority of tech candidates and employers are adapting.
- 52% want a remote-first model with flexibility to go into an office if they wish, while 33% want to stay fully remote – meaning that almost 90% want some kind of remote work option. Employers are adapting with over 90% of employers moving to a hybrid/flexible or fully remote work model.
3. Lowering salaries for remote employees will lead to increased turnover, and most employees expect their salaries to stay the same or increase.
- 74% would start looking for a new job if their salaries were to decrease or they would be denied an expected raise in the next six months. 40% expect salaries to stay the same, while 35% expect them to increase up to 10% over the next six months.
4. Employees want other benefits beyond compensation and are willing to trade them for a lower salary.
- 76% of tech employees are willing to accept a lower base salary in exchange for other forms of compensation, with 12% willing to trade for compelling benefits and only 23% not wanting to trade their base salary at all.
5. Companies need to be highly transparent about their remote compensation and pay structures to avoid frustration and turnover.
- There are mixed opinions about how to determine initial remote salaries – 45% of tech employees disagree with using the cost of living of the employee’s location as a baseline.
Which industries have seen the largest salary growth?
For remote roles, Hired has seen a great amount of salary growth in the entertainment, fashion, and real estate industries, with a 34%, 17%, and 26% average salary increase respectively between 2020 and July 2021.
For U.S. based roles, there was a shift from biotech and consumer mobile industries – which were among the top five highest-paying industries in 2020 – towards enterprise, marketplace, and health as the ones offering the highest salaries in 2021.
For U.K. based roles, the entertainment industry has seen the biggest salary growth, with a 17% increase in average salaries between 2020 and July 2021.
Health is another high growth industry that has shown a 9% increase in salaries.
Average tech salaries by market 2021 vs 2020 for tech talent remain at an all-time high.
Employers need to make an effort to attract talent
Hired’s data showed that more people are migrating out of big tech hubs into areas with lower cost of living. This has led to an increase in demand and interview requests in areas with lower cost of living. As a result, employers are expanding their addressable candidate pool, filling roles faster and paying lower average salaries.
Companies need to be highly transparent when it comes to compensation in order to avoid frustration and turnover and ideally use their highest cost of living market as a baseline for all – making it possible for employees to truly work from anywhere.
“Companies can’t afford to sit back and expect talent to come to them – they need to take proactive steps to attract, employ, and retain top tech talent in this competitive market,” Josh Brenner, CEO of Hired, said in the report.