Tech Talent Market Insights from Salary Benchmarking Tools

June 10, 2024
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Every tech organisation wants to stand out — but how can you actually achieve this in the eyes of employees and potential hires?

The answer isn’t free lunches, pool tables, and Flex Fridays (sorry). It’s compensation. And while that might sound a little boring, the truth is it’s anything but. That’s because, above all else, employees want to be paid fairly for their time and effort. 

That’s not so hard to understand in theory—but getting salary bands right in practice can be a little more complicated. In a fast-moving industry like tech, it’s no longer enough to rely on industry reports, salary review sites, and anecdotal data. 

That’s why forward-thinking organisations are basing their recruitment and talent acquisition strategies around something more concrete: salary benchmarking tools

These tools offer access to the kind of data-driven insights into compensation trends and market competitiveness that help organisations stay on top of their game. Here’s how it’s done. 

The Tech Talent Market Landscape 

The tech market in Europe is expanding at pace and shows no signs of slowing down. The State of European Tech 2023 report found that last year, the annual volume of new tech startups in Europe outpaced that of the United States, traditionally seen as the forefront of this market. 

Europe is also the only region that’s seen an increase in the long-term growth figures and was on track to raise 18% more capital compared to 2020. In contrast, the US, China, and the rest of the world were predicted to see investments at or below 2020 levels. 

Crucially, potential employees have also noticed this upward trend. Europe has seen an influx of talent from other regions, particularly the United States. 

In 2023, global arrivals of tech employees to Europe totaled 30,500, while departures totaled 20,900. This positive net migration gives tech companies within these regions the opportunity to secure top talent from across the globe. 

There might be more experienced tech personnel arriving in Europe, but there’s also fierce competition among tech companies. And that means to attract that talent, your compensation strategy needs to be on point. 

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Role of Salary Benchmarking Tools in Tech Talent Acquisition

There’s a reason why talent acquisition strategies in the tech sector are starting to focus on salary benchmarking tools. And that’s because these tools provide access to a range of valuable insights, including:

  • General market salary ranges for different tech roles and skill sets.
  • Trends in salary increases or decreases for specific tech positions in a variety of locations.
  • Benchmarking data that allows organizations to create compensation packages that match or exceed industry standards and competitors.

These insights give HR teams all the information they need to tailor their recruitment strategies and total compensation offers to what top talent expects. So rather than sit and wonder why you only got three applications for the latest vacancy—you can look forward to receiving applications from job seekers who see the value you bring to the table. 

Benefits of Using Salary Benchmarking Tools in the Tech Sector

From uncovering the data that helps drive smart business decisions to gain an edge over the competition, there are plenty of benefits to using salary benchmarking tools. Here are some of our favorites:

Data-driven decision-making

You can have the best compensation strategy out there but without the right data, you won’t be able to implement it properly. But choose the right salary benchmarking tool and you’ll get access to a huge database that covers all the tech roles you’re interested in, across all the European locations you need.  

Competitive advantage

Trawling through inaccurate salary review sites and out-of-date industry reports is so last year. To gain an edge over the competition, you need the latest salary trends to set competitive salaries that attract (and retain) top talent and make the most of your budget.   

Cost efficiency

If your organization’s salaries are too low, you might think you’ve saved some money. But in the long run, this strategy can backfire. The Society for Human Resource Management (SHRM) estimates that the total cost of replacing an employee comes in at three to four times their salary. 

If you’re paying your Paris-based junior front-end-developer developer a low salary of €36,000 (because that’s the data you found on Glassdoor) they’re going to be pretty demoralized when they discover the average salary for this role is actually €43,000.

What’s their next step? Applying for jobs with your competitors, probably. And when they hand in their notice, you’ll be left struggling to find, and pay for, a replacement. 

Instead—using accurate and up-to-date benchmarking data means you can avoid under or overpaying tech talent by setting accurate salaries that reflect the real state of the tech industry. 

Improved candidate experience

In a competitive, employee-led market, the candidate experience is everything. And the right salary benchmarking tool can provide the transparency that potential new hires are looking for.

Rather than asking what they used to be paid (which won’t be allowed when the EU Pay Transparency Directive comes into force), providing a salary range for each role shows applicants that they’re being treated equitably. 

It also helps them envision what their salary might look like as they progress their career within your organization—which can help boost retention, motivation, and performance

Want a salary benchmarking tool that provides all the above—and more? You need Figures

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Key Insights and Trends from Salary Benchmarking Tools

Still not convinced? Here’s a little more about the key insights and trends that salary benchmarking tools can uncover. 

Uncover the latest salary ranges for trending roles 

Whether you’re looking to recruit software engineers, data scientists, or cybersecurity specialists, to craft a job ad that encourages talent to apply, you’ll need to latest salary ranges. 

And in a fast-moving industry like tech, relying on salary review sites, anecdotal data, or industry reports isn’t good enough. But a salary benchmarking tool can uncover the exact data you need to know. 

Discover regional variations 

Europe is a big region, so it’s no surprise that there are also regional variations in both tech salaries and demand for specific skills.

Let’s look at the salary of a junior front-end developer, as an example:

  • London: €37k
  • Paris: €43k
  • Berlin: €52k

If you don’t know these regional variations, you won’t be able to set competitive salaries that attract talent in your specific area. 

Keep up with emerging tech trends 

Emerging technologies including AI, machine learning, cybersecurity, and cloud computing are all impacting the tech market in Europe. 

Benchmarking tools can help organizations gain a deeper understanding of current compensation averages for these roles, in addition to highlighting which specific skills are demanding higher than average salaries. This information can help HR teams identify where they need to focus their recruitment efforts. 

Case Studies and Success Stories

How Lifen uses salary benchmarking to streamline hiring processes 

When healthcare tech company Lifen secured an investment of €50 million, it was time to take the organization to the next level. This involved a goal of adding 200 new employees to the team within a short time.

But, as the organization is based in France, with a competitive job market, this wasn’t going to be easy. The HR team needed to find industry and location-specific benchmarking so they could set competitive salaries that attracted top talent. 

Even after spending hours searching online, they couldn’t find the specific information they needed. That’s when they found Figures.

The Salary Benchmarking Tool helped the HR team develop salary ranges that could be shared with existing employees and new recruits. This data helped show how salaries were calculated, and where they sat in relation to the wider market. 

And because Figures integrates with a range of HR software, the HR team could improve transparency and trust by making this data publicly accessible to all employees. 

Thanks to our easy-to-use, location-specific data, Liften also succeeded in:

  • Receiving job applications from top talent, thanks to the attractive salaries on offer.
  • Freeing up the HR team’s time, now that they didn’t have to manually search for benchmarking data. 

Read the full case Study: How Lifen Used Figures to Improve Compensation Planning

How Treatwell uses salary benchmarking to recruit and retain top talent 

Operating across 13 different European markets, beauty tech organization Treatwell needed a reliable way to set competitive salaries. Before meeting Figures, the HR team's method was to trawl job adverts and salary review sites before inputting data into a spreadsheet.

Even though this method took huge amounts of manual labor—the results were still unreliable. And with recruitment plans for 600 additional roles in the next year, they needed a better solution, and fast.

Enter Figures.

The HR team at Treatwell had looked into salary benchmarking tools before, but found that none offered the extensive coverage of European markets that they required. But when another HR professional recommended Figures, the team decided to take a look.

What they discovered was that thanks to the extensive coverage of most parts of Europe, Figures Salary Benchmarking Tool offered exactly the level of detail required. Thanks to Figures, Treatwell can now:

  • Access reliable, market-specific, international salary data that’s updated in real-time. This allows the HR team to gain accurate insights into how to set salaries that help the organization stand out from the competition.
  • The data generated by Figures helps the organization forecast its budget for the upcoming year.
  • Salary reviews are made easier thanks to benchmarking data that can inform decisions and be shared with employees when necessary. 

Read the full case study: Figures helps Treatwell to benchmark salaries in 13 countries.  

Salary Benchmarking Tools: Giving You a Headstart on the Competition

In the fast-moving tech landscape—you can’t afford to get left behind. That’s why forward-thinking tech companies are now harnessing the power of salary benchmarking tools to give them an edge over the competition. 

If you’re ready to accelerate your compensation strategy, sign up for a free demo, with Figures. 

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