Ravio Report Reveals Changing Landscape in European Tech Industry
A new report published by hrtech company Ravio sheds light on the shifting dynamics of the European tech startup scene. The report focuses on startup compensation, hiring trends, and growth rates, revealing that hiring sprees are becoming a thing of the past, with companies now prioritizing retention. This change in approach comes as European tech companies face decreased VC funding, a challenging IPO market, rising interest rates, and a greater emphasis on profitability. The report provides valuable insights into the evolving job market and aims to help both employers and employees navigate this new economic reality.
Decreased Hiring and Smaller Raises:
According to Ravio’s findings, 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 is a result of the changing economic landscape and the need for companies to focus on financial stability. As a result, the majority of startups (55 percent) plan to maintain their current number of employees in the first half of 2024. Base salaries for employees are also expected to see a reduced increase of 4.8 percent this year, compared to the previous year’s 8 percent. This adjustment reflects the need for companies to be more cautious with their budgets and prioritize financial sustainability.
The Importance of Retention:
With decreased hiring, startups are placing a greater emphasis on retaining their existing talent. HR and people leaders are facing increased pressure to do more with less, and non-cash incentives like equity and benefits are being used to motivate and retain employees. Ravio co-founder Raymond Siems highlights the need for detailed knowledge of the market and the compensation packages offered by other companies to make informed decisions about retention strategies.
Closing the Gender Pay Gap:
The report also addresses the issue of gender pay equality in European tech startups. As the EU Pay Transparency Directive comes into effect in 2024, startups are under pressure to improve gender pay equality and representation. The report reveals that women have the lowest representation in C-suite positions, accounting for only 19 percent. However, in terms of median salaries, there is no significant difference between genders. The gender pay gap is most pronounced among individual contributors, with women earning 22 percent less than their male counterparts despite representing 41 percent of the workforce. Ravio co-founder Merten Wulfert acknowledges the challenges faced by startups in prioritizing gender pay equality but emphasizes the importance of transparency and taking action to address systemic issues.
Conclusion:
The European tech startup scene is experiencing a significant shift in hiring practices, with a focus on retention rather than aggressive recruitment. Startups are adapting to the changing economic landscape by prioritizing financial stability and using non-cash incentives to motivate and retain talent. Additionally, the report highlights the need for startups to address gender pay equality and representation, especially as new regulations come into effect. By providing transparency and insights into these issues, Ravio’s report aims to facilitate positive change and foster a more inclusive and sustainable tech industry in Europe.
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