The key insight this week
Startups, like nearly every other business, tend to pay different salaries for the same position based on employee location. Those pay differentials shift as metros become more or less competitive. Our Carta Total Comp team released a new set of metro area benchmarks today - let's see which locations have made the strongest gains in the past year.
Brief point about reading the chart above. Take the first line, Raleigh NC. This metro was our winner in terms of the change from the last measurement period (salaries up 12.3%). The Old figure had Raleigh salaries pegged at 76% of San Francisco rates—that figure jumped all the way to 88% of SF here in 2023.
Now, you probably already spotted a confounding factor in this analysis. The percentages are relative to San Francisco salaries, so the net gain or decline for a comparative metro is impacted by changes in SF. For what it's worth, we see a very slight decline in salaries in San Francisco but nothing profound.
What stood out to me
41 metros analyzed, 27 of which saw gains from last year. Speaks to the continued slow convergence of pay bands across the country (likely influenced by pay transparency as well as remote work).
About 1/3rd of the metros that saw gains were in the South.
Every Florida metro area moved closer to SF rates; every Texas metro area moved further away.
Seattle fell out of parity with San Francisco (coming in at 96% of SF salaries).
One thing to keep in mind—I suspect that some of the movement we see in this analysis is driven by improvements to our data set in addition to underlying changes in the market rates. It's challenging to disambiguate those effects but we'll keep at it.
Of course salary levels are in constant conversation with cost of living - my colleague Kevin Dowd went deep on this question in a prior data post.
Here's to a rebound in startup hiring across all these metros in H2 2023!
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Peter Walker
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