This won’t come as a surprise - at Compa, we live for data.
This passion for data was evident among the attendees at the SVCA’s live event, which featured our own Charlie Franklin and Micron Technology’s VP of Total Rewards, Athar Siddiqee.
Charlie and Athar shared their views on how and why comp teams use offer data as a real-time, reliable source of market intelligence to drive compensation decisions and strategies.
Watch the recording of the insightful discussion here.
2023 was about being cost-aware
A trend that is going to continue for the foreseeable future.
Most comp teams are being very cautious about managing costs right now. Due to recent market shifts, tech companies globally are getting increasingly interested in leveraging new sources of data to improve their comp strategies.
And few sources can reveal market trends in such an accurate way that offers can.
Signing bonuses are a source of cost leakage… and valuable insights
Many organizations don’t have clear guidelines or ranges when it comes to signing bonuses. Often, these bonuses are determined by the hiring manager's motivation to recruit a particular expert.
Since signing bonuses play such an important factor when it comes to comp strategies, it’s no wonder Charlie wanted to show the participants how much the market has changed over the past year.
The number of offers with signing bonuses has crashed. “Unsurprising”, said Charlie. It used to be a norm in software engineering. Now, it’s close to being an exception.
Compa’s recent data analysis revealed a significant decrease in the average value of signing bonuses compared to just a year and a half ago. A clear sign that most organizations are pulling back on this type of comp spend.
A great supply of talent
The market is still quite shocked by the layoffs that hit the tech world. There is now a surplus of talent seeking employment, with organizations reducing their hiring efforts.
As a result, the average offer acceptance rate is on an upward trend, even though fewer companies are offering signing bonuses.
Another interesting data is that enterprise tech organizations are hiring on smaller levels than they used to up until recently.
Despite these trends, some companies continue spending a significant portion of their comp budget on signing bonuses. It remains to be seen whether this is a strategic part of their talent acquisition efforts or a lag in adapting to market trends.
Companies pay premiums for AI experts
Interestingly (but not surprisingly), the market saw an increase in hiring AI-focused engineers. Even though the companies pay these types of experts similarly to their “standard” software engineer colleagues, the new “AI” experts get a 2.1x base premium in equity compensation.
Charlie stated that Compa is going to continue closely monitoring these insights and that he expects to see more changes as more companies decide whether to look at AI as a skill or a job.
The differences in market trends across the US
Compa offers valuable insights into the varying market trends across different regions in the United States.
The market situation in the biggest tech hub, San Francisco, is cooling down, despite showing a low offer acceptance rate. Some cities on the East Coast are, on the other hand, heating up - with a higher offer acceptance rate.
These city-specific insights can be valuable to organizations operating in multiple locations across the country, or to the ones that consider hiring people in other cities.
“Offers, the cause of and the solution to all pay problems”
Offers. A big source of costs. And a big potential source of pay equity issues within companies.
Today, progressive comp teams pay more attention to offers. They think more about how much to spend on offers annually. They plan more. They consider the effect offers will have on others within the organization.
When deciding on individual offers and the total annual investment, companies used to rely on internal data, stale survey data, or advice from their talent acquisition team.
And even though the insights brought by talent acquisition experts are a great source of direct market intelligence, there’s a more efficient way of understanding market trends.
The one that paints the big picture with great accuracy and relevancy: Recent offers made by enterprise tech companies.
The Compa difference
Unlike traditional compensation surveys, Compa Index connects offer data from your applicant tracking system (ATS) across its customer network, eliminating manual submissions and introducing new visibility into internal offer spend insights. By automatically matching accepted and rejected job offers, compensation data is leveled across participating companies.
And what exactly do you get? All new data stories like acceptance rates, location variance, offer volume, prevalence, and average spend immediately become available. Like, did you know there’s a top three US city where P2 and P3 engineers accept jobs 15% more often at a third of the cost? Certainly not the kind of stuff you get with traditional data sources.
As Charlie and Athar concluded, offers-inspired data already helps comp teams make a difference. And the future looks even brighter.
As more and more companies sign up for the cause, the data becomes more and more relevant, helping enterprise compensation teams create more and more accurate and competitive compensation strategies.
Watch (and rewatch) the full webinar with Charlie and Athar here.
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