Australians working in startups attract some of the best wages in the nation, particularly in the areas of engineering and finance, with senior-level executives earning mean wages over $200,000.
However, despite efforts to increase female representation, the industry continues to be overwhelmingly male-dominated, with women making up a minority percentage of overall funding.
A new report released today, “Australian Startup Salary Guide 2019/2020” compiledbystartup talent and growth firm Think & Grow and Amazon Web Services (AWS), based on the salary analysis of 1000 individuals working across 63 VC-backed Australian startups, paints a comprehensive picture of the salaries and composition of the Australian startup ecosystem.
What exactly did this Think & Grow and AWS Report find out?
Key findings of the report in startups that had raised over $10M include:
CEO, engineering, and finance roles are the most lucrative: CEOs,CTOs and CFOs are amongst the most highly paid positions, with mean salaries of $227,551, $202,000 and $207,000 respectively
Women are still largely underrepresented in STEM roles: Of startups surveyed, women comprised just 12.9% of founder CTOs and zero CFO roles. Conversely, they held 75% of senior marketing roles, and held around half of senior HR (50%) and customer service (55%) roles.
Fewer women means less VC funding: Of startups surveyed, female founders were scarce. Because of this, female-founded startups had not attracted more than $3 million in funding, Male-founded startups were more common, with a higher percentage of those raising in excess of $50 million
$10 million is the magic capital number: At this point crucial hires such as CFOs, HR and customer service increase significantly.
The Australian startup ecosystem is maturing: Heavyweight hires, such as COOs and data scientists are on the rise, indicating more businesses are reaching the critical mass to scale into new growth phases.
Does it pay to found a company?
Australian founders who raise money earlier pay themselves better, give themselves more equity and generally have more gender diverse teams.
Early-stage founders who have raised $500,000 or less pay themselves a mean salary of $76,792, while on the top end of the scale, founders who have raised $50 million or more, earn a mean salary of $227,551.
As more capital is raised, the number of founder CEOs decrease, indicating as startups mature, founders are either taking a backseat or exiting.
$10 million means business for Aussie startups
The report identified a common trend across product functions that occurs when companies hit the $10 million capital raise mark- startups change. They start to get serious about HR, legal, finance, risk, compliance, customer support and strategy- and are willing to pay big salaries for them.
Responsibilities that were once covered by the founder, or early hires wearing many hats, break out into distinct roles. The value of product, design, HR, sales, and marketing comes to the fore.
Of all hires, dedicated product (48%), HR (82%) and sales (55%) occur at the $10 million mark. At earlier stages, these functions are often outsourced.
Heavyweight hires also surge at this point, with CTO/VPs of Engineering (53%) and CFOs (58%) coming on board. COOs tend to make an earlier appearance, with hires in 77% in startups who raise $5M.
Women still draw the short straw:
The data revealed that although women account for a majority of low-level roles, women are underrepresented in executive positions. Of startups surveyed who had raised between $10-50M, women were absent in roles including CFO, CTO/VP Engineering, VP/Head of Sales or Head of Operations.
Women are more likely to hold lower-level roles, comprising 66% of accountancy roles, 55% of customer service roles and 77% of office manager roles. Conversely, they held 75% of senior marketing roles, around half of senior HR roles (50%) and 66% of data scientist roles.
The data also highlighted the ongoing need to address diversity in VC funding. Of startups surveyed, female founders had not attracted more than $3 million in funding, compared to male counterparts who had raised in excess of $50 million.
New roles are on the rise, unless you’re an engineering grad
As Australia’s startup ecosystem grows, new roles are being introduced into the workforce. New roles like data scientists comprised 3.5% of all job hires. Other up and coming roles include dedicated product managers, COOs and CROs.
However, despite Australia’s world-class universities, this year’s salary survey reveals graduate and junior engineering positions are rare. 40% of all startup hires may have been in engineering, but not at an entry-level. This indicates a need to develop solid mentoring programs within startups, enabling younger engineers to land satisfying roles and broaden the local talent pool.
What do these findings mean?
Jonathan Jeffries, Director and Partner, Think and Grow said despite entering a period of economic decline, the technology industry is still producing career opportunities for Australians, without a drop in salary.
“In the wake of the current environment due to COVID-19, we hope this report will highlight the opportunities that exist in future industries, including technology careers. New data from LinkedIn shows that despite the hiring rate across the economy falling to -2.8 per cent, software and IT is up 17.3 per cent, meaning growth in the sector is strong.
“Even with COVID-19 layoffs, we aren’t seeing current salaries reduce from the salary data reflected in the report. Talent in tech is still a premium, despite economic decline across other industries. Tech jobs are still growing and skillsets are in high demand. The recruitment work we still have globally shows the same salary levels as was 6 months ago.
“Instead of salary cuts, current employees (be it executives, key staff) are working reduced hours. While we’re seeing some temporary pay cuts, we’ve not seen a shift as yet in salary,” he said”.
“The report should demonstrate to the Government the importance of looking after the tech sector in these difficult times. The tech sector is a driver for the future of Australia’s economy and it’s essential we support this industry for generations to come.
“In light of this situation, work as we know it has significantly changed and we acknowledge that for many of us, this will be a tough time. To support the Australian startup ecosystem during this period, Think & Grow is extending free career coaching services to those in the technology industry who have been made redundant,” he said.
Jonathan went on to remark, “We need to move the Australian ecosystem into the future. The jobs of today and yesterday will be vastly different from those in 5, 10 and 20 years’ time. Globally and locally, we are seeing shortages of skills in product, engineering, sales roles. Specialists across AI, Machine Learning, Data Science amongst others, are particularly in high demand in Australia.”
“Once we move out of the current economic turmoil, new roles and needs will appear in the current skillset shortages, as well as new technology needs. We will likely see a lot of jobs become permanently redundant. It’s essential that we look at white-collar workers and graduates, and help educate and re-train them into tomorrow’s economy.
“With the amount of qualified, skilled staff being let go, it’s clear we must act now and support in the training of tomorrow’s economy and give those humans hope.”