Compensation rates for executives in tech are being heavily impacted by many of the top trends affecting the industry in 2024, and the direction the market is heading can be gleaned from many of these developments and how they are driving earnings for top leadership jobs. Salaries for many roles are seeing stagnation as the sector still reels from the effects of inflation, mass layoffs and other economic uncertainties, yet for those with more experience and unique skill sets there remains ample opportunity.
The Betts Recruiting team has updated our annual Executive Compensation Guide, granting new insights for both candidates and SaaS companies searching for execs with a background in technology. This article will be the first in a series covering the top trends affecting salaries for C-suite officers, Vice Presidents and Directors in the tech sector and how these developments will be impacting the industry as a whole.
The Executive Compensation Landscape for Tech Startups
The technology sector is experiencing significant changes in 2024, to put things lightly. Compensation rose steadily across many jobs on the go-to-market (GTM) side both immediately before and during the 2020 pandemic as many firms scaled up rapidly in the wake of growing demand for SaaS solutions. However, between the push to return to in-office or hybrid work and economic uncertainties making organizations rethink their purchases, software providers of all sizes have felt the effects of a market starting to slow down.
Tech executives have seen the impact of these trends firsthand, a result of which is the fast growth of salaries from 2019 to 2020 scaling back even while leaders have been tasked to do more with less. Another layer of complexity added to this dichotomy is that the recruiting focus has shifted in a way that is reminiscent of how SaaS buyers are evaluating their ROI. Hiring managers are refining their executive search with a preference for candidates with more experience, to the point where those with proof of concepts of success in their fields will be able to earn up to 20% more than the average salary rate.
However, we found multiple trends impacting exec compensation rates in different ways in 2024. Here are some of the additional top patterns found through our research:
Fractional Executives: Embracing Expertise as a Service
The rise of fractional executive hiring in tech started to gain prominence in 2023, and the practice has continued into the next year. These are contractual leaders that, while working on a temp basis, deliver valuable skills and knowledge along with direction for their assigned teams during short-term projects. This Expertise as a Service (EaaS) allows many startups to scale project management while still leveraging direct departmental leadership unlike with a hands-off consultant or committing to full-time salary payments while still growing out teams.
Women in Tech: Promoting Diversity and Inclusion
A trend that has slowly gained increasing attention over the past few years is the ratio of women in the tech industry versus how many occupy leadership roles across organizations of all sizes. Although the exact percentage has fluctuated within this time frame as well as depending on the source, women have made up between 25% to 30% of the technology workforce between 2019 and 2023, with these numbers jumping up to 29% to 45% in tech enterprises. The number of women in executive roles in these companies, however, drops, prompting calls for improving the diversity of leadership in the industry (as well as closing the gender wage gap).
Soft Skills for Hybrid and Remote Teams
In 2024, soft skills are rapidly growing in importance for the technology sector, but they are especially vital for top executive talent. Even while many organizations have started to push for a return to in-office work, most SaaS companies retain hybrid set ups and many still have remote employees here and there. Distributed team models often require a greater level of personability, empathy and willingness for proactive collaboration among managers to ensure team members scattered across different locations remain engaged and connected.
Here are the top 10 soft skills tech executives need to possess in 2024:
- Communication
- Adaptability
- Leadership
- Empathy
- Strategy
- Decision-making
- Networking
- Conflict Resolution
- Resilience
- Continuous Learning
Executive Upleveling and Career Path for Tech Startups
The role and responsibilities of exec titles in the technology space continues to evolve with the changes in the market, with many leaders learning to adapt to both new challenges and opportunities. The biggest trend by far is the progression of career paths for leadership positions in tech, which look much different than they did even a decade ago – with the larger hiring drives of 2019 and 2020, many were promoted to C-level spots faster than what was expected even a few years prior. This of course is being scaled back and most startups are actively looking for candidates with more than 10 years of experience for chief-level jobs, yet remain in a bit of a paradox as the expected compensation rates are often too high for what smaller organizations can afford. There is a middle ground emerging where hiring managers are focusing on type of experience versus the years, with both soft and technical skills topping the list of requirements.
Compensation and Hiring Trends for Technology Executives in 2024
Salaries for most tech execs remained mostly stagnant from 2023 to 2024, with a few dips or bumps for different titles at various startup stages here and there. However, keep in mind that candidates with more years of experience, proven track records of leading their teams to success, and technical knowledge have much more room to negotiate and will earn up to 20% more of the average rate.
Here is a quick breakdown of the compensation trends for each group of executive titles:
C-suite Executives
Earnings for the C-suite remained mainly flat from 2023 to 2024, with some minor variations in hiring and pay trends. Chief Executive Officers (CEOs) remained the most popular and the highest-paid jobs for startups, although we saw more firms hiring Chief Commercial Officers (CCOs) and Chief People Officers (CPeOs); however, this was offset by slight dips in earnings for those roles at earlier funding stages.
Fractional CEOs and More
Fractional CEOs, along with Fractional CFOs and COOs, remained popular hires for shorter-term project scaling, with high compensation rates to match. Some Fractional C-suite Officers could charge several times more on an hourly basis than they would earn as a full-time salaried executive.
Vice Presidents
Vice Presidents saw the most fluctuations in salary rates of any title grouping in tech from 2023 to 2024, with several roles seeing slight dips at both ends of the average range. This means that roles such as VP of Sales, VP of Marketing or VP of Product saw decreased starting pay if they were hired at Seed or Series A, as well as slightly cut earnings for top performers at Series D and beyond. VPs of People Ops saw the biggest cuts to compensation across the board, ranging from $25,000 to $45,000 less than last year.
Directors
Salaries for Director and departmental “Head of” titles were some of the most stable from 2023 to 2024 for tech executive compensation. The only exception were Directors of Sales, who saw cuts between $10,000 to $15,000 for average rates in Seed or Series D hiring trends. However, bonuses did see some slight upticks from the previous year, usually by Series C.
Scale Your Executive Search with the Betts Recruiting Data-driven Approach
The technology industry continues to change and evolve as it adapts to the economic and market realities around it. Betts Recruiting will help you stay ahead of these developments with our data-driven approach to helping you scale your talent acquisition process, ensuring that you will be able to source and attract experienced top executive talent without breaking your hiring budget.
Contact Betts here to learn more about the top trends affecting exec compensation in tech, and how to ensure you lock down your unicorn candidate for your open executive roles leveraging the latest data.