2016, the Year of the Mainstream Startup
More professionals are turning from corporate jobs to the startup world, and London is heavily invested in fostering a strong and creative startup community. With the ever increasing development of new businesses complemented by the influx of professionals joining the startup workforce, the need for information regarding the expectations and desires of your next great hire has only become more important.
The team at Kandidate are delighted to present London Startup Worker Trends for 2016; from salaries and equity requirements to your most appealing stage of growth.
#1 What Type of Startup is Most Popular with Candidates?
While many professionals may simply be looking for the desirable ‘startup culture’ associated with the workplaces of Facebook and Google, candidates also care about which stage in it’s lifecycle your business has reached.
In the business sector, growth stage startups (with £10-100 million valuation, 20-100 employees) are the most popular, while early stage startups (those with £1-5 million valuation, 10 employees) come in second. Finally, fewer business startup workers prefer established startups (£0.5-1 billion valuation, 250-1000 employees).
For candidates within the product and engineering sectors, the pattern remains the same: the most popular type of startup are those in the growth stage, followed by early stage businesses. Established startups hold the last position in terms of overall appeal – it seems that London’s startup professionals are keen to get in early, but not too early, preferably once product-market fit has been established and it’s time for the business to scale up.
It’s interesting to note that startup workers in each sector are drawn to growth stage business, reflecting what appears to be a desire to balance risk against benefits.
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#2 Which sectors are most popular with candidates?
London’s incredible fintech scene is as strong as ever; it’s not surprising that startup professionals in business prefer the E-Commerce sector. The Lifestyle sector comes in a close second, with Mobile Apps hot on it’s heels – with mobile internet accounting for more than half of most online browsing and purchases, and the success of apps like Candy Crush, Instagram and Facebook, the opportunity for monetization in this sector is strong, even if competitive. It is worth noting that business candidates showed similar preference for all sectors, with only a 9% difference between the most and least popular.
The growth and accelerated development of decentralised delivery/transport systems such Stuart, Deliveroo and Uber, competing against one another as well as existing businesses and systems – combined with the ever-increasing desire for services on demand – has given rise to a boom in service-based b2c startups that rely on innovation to get ahead of the pack. Keeping this in mind, it’s not surprising that startup workers involved with product show an even closer affinity to certain sectors, with Lifestyle startups and App/Mobile startups as the most popular.
As London evolves into a supercity, trying to serve and account for a populace of millions of expats and locals alike, the product workers preference for startups involved with the Internet of Things and E-Commerce reflects the need for integrated systems that assist in the efficiency of the city as a whole, as well as financial support across boarders and regulatory systems.
Engineers have the least specified industry preference, with SaaS, E-commerce, App/Mobile, Internet of Things, Data & Analytics all coming in within a percentage of one another. It may appear that the overall nature of their work itself doesn’t change too much between industry sectors, as engineers work on similar systems across the board.
- London Startup Worker Trends 2016
#3 Where do Millennial Startup Workers in Europe want to work?
Interestingly, business, product and engineering startup workers all share the same preferences when it comes down to where they want to live and work. While the percentages differ slightly, London comes in at the top of the chart – with english as a common language, it may be that businesses in the UK capital are more appealing as they offer a wider avenue of growth across boarders, unlimited by location specific communication… as opposed to other European cities that may have a single and specific language or dialect.
This is followed by New York, San Francisco, Berlin, the UK (non-London), Paris and, finally, Dublin.
#4 Salary Expectations and Best-paid Startup Positions
How much do startup professionals expect to get paid? Well, depending on their level of experience, candidates in the business and product sectors expect an average of £39 000.00 pa for entry level positions (0-2 years of experience), £50 000.00 pa for mid-weight positions (3-5 years of experience), and £62 000.00 pa for senior positions (6+ years of experience).
The best paid startup jobs in the non-tech sectors fall into the Sales and Operations sectors, with Marketing positions close behind at the executive and mid-manager levels.
An Executive Level professional can expect to earn an average salary of £32 000.00 pa in a marketing position, £33 000.00 pa in a sales position and £32 830.00 pa in operations. When that startup worker progresses to Mid-manager level, they can expect to bump up to an average salary of £43 000.00 pa in marketing, £56 000.00 pa in sales, and £51 250.00 pa in operations.
Once that worker has been promoted to a VP/Functional Head position, the best paid startup job coming from the operations sector, at a whopping £95 000.00 pa. It should be noted that the average is skewed by high paying Head of Operations and General Management positions at post-Series A startups, and that these roles are relatively scarce when compared to senior sales and marketing roles. There’s a noticeable difference between this and the salaries of VP’s in sales ( £65 000.00 pa) and marketing ( £57 000.00 pa).
- London Startup Worker Trends 2016
#5 Are candidates willing to work for a lower salary in exchange for shares?
Some startups may not be able to meet a candidate’s initial salary expectations, but are willing to offer equity in the business to make the package more desirable. That may be a viable option as 50% of startup professionals in the business sector would accept a lower salary with equity/shares, followed by 43% of professionals in the product sector.
For those professionals in the engineering sector, only 33% would be happy to forego their initial salary expectations in return for shares – this may be a reflection of the demand for skilled engineers and the apparent skills shortage in technical areas, allowing engineers more freedom of choice in regards to employment options. Alongside this may be a tendency of those in the engineering sector to be more practically minded and risk-adverse.
It is interesting to note that, across the board, over ⅓ of candidates were willing to accept job offers that offered a lower salary than their initial expectations, but had other appealing aspects.
2016 Startup Worker Trends In Summary
- Growth stage startups are most popular with potential candidates
- Candidates prefer E-Commerce, Mobile App and Lifestyle startups
- Most European startup workers want to live in London, as opposed to other tech hubs
- Salaries expectations are usually negotiable: ⅓ of candidates would accept job offers at a lower rate than initially desired
- Stock options are desirable: many candidates would accept a lower salary if equity was included in their package
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