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March 21, 2024 | Tom Ballard

Hiring and compensation have undergone a reset at venture-backed start-ups

Companies on the Carta platform made 267,818 new hires in all of 2023, a far cry from the 523,487 hires made in 2022 and 525,827 hires from 2021. 

Carta, a cap-table management platform that tracks employment statistics, venture funding, and other data for more than 40,000 start-ups, reports that hiring and compensation have undergone a reset as venture-backed companies continue to contend with bear-market headwinds.

In a recently released report, Carta reported there were more total job departures from companies on Carta in 2023 than there were new hires, the first annual net contraction in at least five years. A wave of layoffs that peaked in January 2023 also contributed to the workforce contraction. That month, start-ups laid off more than 18,000 employees.

Start-ups were still hiring last year, but their priorities shifted. Employees in engineering, sales, and operations made up a larger portion of all new hires, while job functions in customer success, support, and product accounted for a smaller portion of new hires than they did in the past. Compensation strategies shifted, too. Newly hired entry-level workers and C-suite leaders both saw their average salary levels increase during 2023, while new managers and Vice Presidents saw their average salaries decline.

Key takeaways included:

  • Hiring halved last year: Companies on Carta made 267,818 new hires in all of 2023, a far cry from the 523,487 hires made in 2022 and 525,827 hires from 2021.
  • Thirty-two percent of new hires from 2022 departed their companies: Even among very recent hires, employee turnover has been considerable. About 32 percent of employees hired in 2022 are no longer with the company, and about 23 percent of new hires from 2023 have already moved on.
  • Equity packages have stabilized: The average amount of equity issued to new hires increased by 0.2 percent in January 2024 compared to September 2023. That’s a small change, but it’s an abrupt shift from recent history. Previously, equity benchmarks had declined by 37 percent between November 2022 and September 2023.

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