European Tech Startups Shift Focus to Retention Amid Decreased Hiring Rates

Ravio Report Reveals Changing Landscape of Startup Compensation and Hiring Practices

A new report published by hrtech company Ravio has shed light on the shifting dynamics of the European tech startup ecosystem. The report highlights a significant decrease in hiring rates and a growing emphasis on retention strategies among tech companies. As the industry navigates the challenges posed by decreased VC funding deployment, a closed IPO window, and rising interest rates, startups are adjusting their hiring policies and focusing on creating a more equal and inclusive working environment.

Decreased Hiring Rates and the New Reality:

Last year, the European tech industry experienced high hiring rates due to a combination of factors such as the zero-interest rate environment, remote working policies, and the great resignation. However, the Ravio report reveals that hiring across European startups has decreased by nearly 40 percent year over year. Late-stage startups have been particularly affected, with a 50 percent decrease in hiring. This shift in hiring practices reflects the current economic climate, which includes decreased VC funding deployment, limited IPO opportunities, and a heightened focus on profitability.

Ravio’s Insightful Data Analysis:

Ravio, known for its real-time compensation data analysis, has analyzed over 150,000 compensation data points to generate valuable insights into the European tech ecosystem. The company aims to help startup employers navigate the new economic reality and assist employees in understanding fair pay in the current job market. Ravio’s report serves as a bellwether for the industry, providing crucial information for both employers and employees.

Less Hiring and Smaller Raises:

The period during and after the pandemic witnessed unprecedented demand for tech talent, resulting in higher compensation packages for startup employees. However, with the changing market conditions, startups are now focusing on financial stability and reducing the number of new hires. Approximately 55 percent of startups plan to maintain their current employee levels in H1 2024. Consequently, the expected base salary increase for employees has decreased to 4.8 percent, a 40 percent drop from the previous year. This adjustment reflects the need for startups to budget wisely and prioritize financial sustainability.

Addressing Gender Pay Equality:

As the EU Pay Transparency Directive comes into effect in 2024, startups face increasing pressure to improve gender pay equality. The Ravio report emphasizes the need for startups to address both pay and representation to close the gender pay gap. The report reveals that women have the lowest representation in C-suite positions, accounting for only 19 percent. However, there is no difference in median salaries between genders. The gender pay gap is most significant among individual contributors, with women earning 22 percent less than their male counterparts despite representing 41 percent of the workforce.


The Ravio report provides valuable insights into the changing landscape of European tech startups. With hiring rates decreasing and a renewed focus on retention, startups are adapting to the current economic environment. The report also highlights the importance of addressing gender pay equality and creating a more inclusive working environment. As startups navigate the challenges posed by limited resources and financial pressures, it is crucial for them to prioritize fair compensation practices and foster diversity and inclusion. The Ravio report serves as a guide for both employers and employees in understanding the evolving dynamics of the European tech startup ecosystem.






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