Telecommuting is leveling the salaries of technology start-ups across the country, with Silicon Valley and San Francisco as benchmarks and Seattle as chart a.
This is a conclusion drawn from a recent study by Carta, a financial technology company: the remuneration of technology start-ups in Seattle is now equivalent to that in the bay area, with an increase of 3 percentage points last year.
Peterwalker, head of Carta insights team, explained when summarizing the survey results: “with the increasing expectation of remote work in 2022, wages began to converge to higher-level subway companies.”.
Walker believes that several factors have led to this convergence: “some employees have become alienated, but their wages have remained unchanged. Some companies with new remote labor are now competing for talent in various markets across the country, not just in their hometown.”
Walker added: “if this trend continues, it will have a far-reaching impact on skilled workers and company leaders seeking the next key position.”
This trend is particularly evident in the west, blurring the boundary between Silicon Valley and Seattle and strengthening the concept of the growing “megacity” on the west coast. This change is partly due to the rise of Silicon Valley engineering outpost in Seattle over the past decade.
Axios Seattle first reported on Carta’s discovery of a new pay parity between Seattle and bay area startups on Monday morning.
Remote recruitment is a key driver. According to the company data contained in the Carta study, 62% of new employees are from states outside the designated headquarters of start-ups, up from 35% in 2019.
Although the technical compensation in different regions tends to be the same, about 84% of the companies have taken into account the geographical factors when setting the compensation, and adjusted the actual differences.
Inflation and economic recession have exacerbated this complex situation. This study shows the impact of austerity and layoffs on the entire technology industry: 29% of departures in May 2022 were involuntary, up from 15% in August 2021.
Carta, formerly known as eshares, is a San Francisco based company that produces software for tracking and managing company equity, including stock compensation and market capitalization tables. Carta said the study was based on 127000 employee records of start-ups using its compensation management platform.