As we cruise into the midway point in the year, it’s crazy to reflect on how much has happened in 5 short months. You could argue that the industry as a whole is in a different cycle now than it was in January. Chatter has lots of folks leaning out budgets, conserving capital, and preparing for a downturn of unknown severity and duration. We finally saw a drop-off in Digital Health Funding this year (a leading indicator we’ve been keeping and eye out for), and so we expect a moderated cooling of the talent market over the next 2-4 quarters. This feels like an overdue correction to us – so much funding has flooded that market in the last two years, leading to inflated valuations and skyrocketing salaries. Equilibrium is important, and we’ve been out of balance for a bit, so while we expect the next few quarters to be bumpy, longer term, we remain bullish. All of that said, there remains a tremendous supply/demand imbalance between jobs and strong execs to fill them, and the inventory will probably take some time to clear. To us, this means, that we likely see continued intense competition for talent this year, holding executive compensation near the highs they’ve recently enjoyed.
Which brings us to our Annual Digital Health Executive Compensation Study. For the second year in a row, this was a labor of love, and we’re pleased to share this report with you here. This originally was distributed to all of the study participants in an early access format a few months ago, but as we ramp up ahead of the Fall Survey launch for the 2022 study, we wanted folks to see the benefits of participating. We anticipate this year will be our richest data set yet, and we’re excited to continue hearing great feedback about how this has helped people. Here’s a few snippets at a glance:
- Seems like everyone these days is searching for a great product leader and product execs know it. With 63% of product respondents switching jobs in 2021, these leaders saw increases on their base salaries of between 10 and 25% across the board at the Seed through Series B level.
- In 2020, when a BIPOC exec negotiated their base salary, they saw an average increase of 8.7%, far below the average of 11.8%. This year, that percentage jumped to 11.1%, just ahead of the 11% average.
- 48% of our respondents switched jobs in the last year, led by product and sales. Biggest reason? Mission of the company accounted for 32% of the primary reason, followed by leadership team at 24%. Compensation was a paltry 6% as the top reason for the switch, which goes to show that while retention is hard, it can also be supported by what your company does versus just what it pays.
- Regardless of how much data you have, sentiment and understanding will always play a big part in human decision-making. Of our respondents, nearly 40% felt that they were below market on their compensation. If you look at that group in totality, 52% of them are actually at or above market for their function, level and stage.
We hope you enjoy reading the rest!