The Tech Hiring Market
A guest post from newsletter writer Gergely Orosz.
Last week, I told paid subscribers about soaring valuations for early stage software companies. Startups are raising at unicorn valuations before they even have $10 million in annual recurring revenue.
Fellow Substack writer Gergely Orosz has been documenting the flip side of that coin: soaring salaries.
Of course, high valuations can be a mixed bag when it comes to recruiting. It gives new recruits some (perhaps misplaced) confidence in the long-term prospects of the business — and it can make their equity options appear more valuable on paper. But it means the new hires might be less likely to see the astronomical valuation increases than if they joined a Series A or Series B software company a few years ago.
Orosz wrote to his subscribers:
Higher valuations tend to pull in better people in the recruitment pipeline, though. I talked with multiple founders who all shared they are getting a *lot* more applications since they became unicorns.
If the company starts issuing not options, but double-trigger RSUs, they will have no problem hiring people, as this structure takes away the risk of the equity being underwater.
If they keep issuing options, more experienced people who understand how equity works will likely pass… unless the 409a is low enough that they take the gamble.
In his own newsletter, The Pragmatic Engineer, Orosz has been chronicling the perfect storm in the tech hiring market. You can subscribe to his newsletter to read Part 1 and Part 2. He agreed to let me publish the latest installment which has some cold hard data about how tech companies around the world are paying their employees.
Off-cycle compensation increases, a data engineer shortage and low-cost regions becoming too expensive.
The market for tech professionals with experience - and especially software engineers - continues to be on fire. This newsletter issue is especially relevant for hiring managers, and those budgeting for next year.
This issue covers:
Compensation increases done off-cycle with over 30 data points from various companies.
🔒 A data engineer shortage, how companies are responding to this, and the opportunities this opens for engineers.
🔒 Facebook’s hiring crisis, and how this will impact the tech market.
🔒 Remote work options are starting to dominate job postings.
🔒 Low-cost regions: are they becoming too expensive?
🔒 Advice to hiring managers on tackling all the above challenges.