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𝐅𝐨𝐫 𝐀𝐦𝐞𝐫𝐢𝐜𝐚𝐧𝐬, 𝐇𝐢𝐫𝐢𝐧𝐠 𝐁𝐫𝐢𝐭𝐢𝐬𝐡 𝐓𝐚𝐥𝐞𝐧𝐭 𝐇𝐚𝐬 𝐍𝐞𝐯𝐞𝐫 𝐁𝐞𝐞𝐧 𝐌𝐨𝐫𝐞 𝐀𝐭𝐭𝐫𝐚𝐜𝐭𝐢𝐯𝐞 Happy July 4th. At this time 248 years ago, the main import/export debate between England and the US was centered around tea leaves and Boston. “𝑁𝑜 𝑡𝑎𝑥𝑎𝑡𝑖𝑜𝑛 𝑤𝑖𝑡ℎ𝑜𝑢𝑡 𝑟𝑒𝑝𝑟𝑒𝑠𝑒𝑛𝑡𝑎𝑡𝑖𝑜𝑛…” 248 years later, the modern-day import/export debate is around how to hire offshore talent in the UK. 𝐖𝐡𝐲 𝐢𝐬 𝐢𝐭 𝐦𝐨𝐫𝐞 𝐚𝐭𝐭𝐫𝐚𝐜𝐭𝐢𝐯𝐞 𝐭𝐡𝐚𝐧 𝐞𝐯𝐞𝐫 𝐟𝐨𝐫 𝐔𝐒 𝐜𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬 𝐭𝐨 𝐡𝐢𝐫𝐞 𝐢𝐧 𝐄𝐧𝐠𝐥𝐚𝐧𝐝? The Pound (GBP) is at one of its weakest states ever relative to the USD. Today the exchange rate is ~1.27, down from ~2.1 in 2007. Many things have contributed to this trend including the 2008 global financial crisis, Brexit, and interest rate differentials in favor of the USD. A silver lining for England? A weaker currency is good for exports–including labor. ____________ 𝐇𝐨𝐰 𝐭𝐨 𝐜𝐨𝐦𝐩𝐞𝐧𝐬𝐚𝐭𝐞 𝐔𝐊 𝐞𝐦𝐩𝐥𝐨𝐲𝐞𝐞𝐬 Keen to get in on the fun and start hiring in England? Let’s take a look at UK comp on three dimensions, all directly from Pave's market data. 1️⃣ 𝐋𝐞𝐯𝐞𝐥 𝟏 – 𝐁𝐫𝐨𝐚𝐝 𝐠𝐞𝐨 𝐝𝐢𝐟𝐟. First, consider the broad-based geo diff between the USA and the UK. According to Pave’s Global Location Insights product which triangulates across real-time data points from almost 8k customers, 𝐭𝐡𝐞 𝐛𝐫𝐨𝐚𝐝 𝐛𝐚𝐬𝐞𝐝 𝐠𝐞𝐨 𝐝𝐢𝐟𝐟 𝐛𝐞𝐭𝐰𝐞𝐞𝐧 𝐭𝐡𝐞 𝐔𝐒𝐀 𝐓𝐢𝐞𝐫 𝟏 𝐌𝐚𝐫𝐤𝐞𝐭𝐬 (𝐍𝐘𝐂, 𝐒𝐅, 𝐞𝐭𝐜) 𝐚𝐧𝐝 𝐭𝐡𝐞 𝐔𝐊 𝐢𝐬 𝟎.𝟔𝟑. So, if an employee is making $100k in one of your USA - Tier 1 office locations, as a general rule they should be making $63k (or ~£49 GBP) in the UK 2️⃣ 𝐋𝐞𝐯𝐞𝐥 𝟐 – 𝐆𝐞𝐨 𝐝𝐢𝐟𝐟𝐬 𝐛𝐲 𝐣𝐨𝐛 𝐟𝐚𝐦𝐢𝐥𝐲. Different job families are subject to different labor market forces around the world. For instance, while the geo diff for USA → UK average across all job families is 0.63, it is 𝟎.𝟓𝟖 𝐟𝐨𝐫 𝐬𝐨𝐟𝐭𝐰𝐚𝐫𝐞 𝐞𝐧𝐠𝐢𝐧𝐞𝐞𝐫𝐢𝐧𝐠, 𝟎.𝟖𝟔 𝐟𝐨𝐫 𝐬𝐚𝐥𝐞𝐬 (𝐰𝐨𝐚𝐡), 𝐚𝐧𝐝 𝟎.𝟔𝟏 𝐟𝐨𝐫 𝐏𝐞𝐨𝐩𝐥𝐞 𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐬. The main callout here is that UK sales comp is much closer to the USA whereas other job families (including software engineering) have a larger geo discount. This generally makes sense given that Sales compensation is so tightly coupled with the mathematics of how much $ a rep hunts and is likely less influenced by localized labor market forces. 3️⃣ 𝐋𝐞𝐯𝐞𝐥 𝟑 – 𝐆𝐞𝐨 𝐝𝐢𝐟𝐟𝐬 𝐛𝐲 𝐥𝐞𝐯𝐞𝐥. Lastly, you should consider how the geo diff varies based on the level within a job family. As a general principle, 𝐦𝐨𝐫𝐞 𝐬𝐞𝐧𝐢𝐨𝐫 𝐫𝐨𝐥𝐞𝐬 𝐢𝐧 𝐚𝐧 𝐨𝐟𝐟𝐬𝐡𝐨𝐫𝐞 𝐜𝐨𝐧𝐭𝐞𝐱𝐭 𝐡𝐚𝐯𝐞 𝐚 𝐬𝐦𝐚𝐥𝐥𝐞𝐫 𝐠𝐞𝐨 𝐝𝐢𝐬𝐜𝐨𝐮𝐧𝐭 than their junior counterparts in the same job family. However, don’t take this for granted; it is prudent to go deep and conduct a family-by-family analysis yourself. See the attached analysis for an example. #pave #marketdata #benchmarks #comp #uk
Mindy Wei
3w
This huge difference in compensation is also why I see so many UK-based people moving to the States.
Re: tech job family diffs: there are two ways to frame this: 1) There's a steeper discount for international tech talent. But I actually think a more accurate read is this: 2) US tech companies place an insane premium on local tech talent.
Great breakdown and very timely as we're expanding our customer-facing teams into the UK.
Vishal Rana
3w
Quite tounge in cheek for a late day post on July 3rd.
Ashish Raina we were just talking about hiring in London...
Very helpful!
Changing the future of Compensation | Early Pave Crew | Carta Alum | Retired CPA
3wSeeing very similar data in Australia