Remote hires now represent 62% of all new contracts signed by startup employees

A new report by Carta indicates that a majority of startup employees are now hired remotely, representing 62% of all new contracts. Here are some of the key trends and findings from the report.

Remote hiring soars: The percentage of remote hires has nearly doubled since 2019 from 35%. Almost all startups have shown a tendency to recruit the majority of new employees remotely, while the smallest and youngest ones constituted an exception.

• The companies valued between $1M and $10M have a 60/40 ratio that favors in-state hiring. The gap was recorded as the biggest ever seen since 2019 and went against the convergence trend that peaked in 2021.
• Companies valued between $500M and $1B have the largest gap, with a ratio of 71/29 favoring out-of-state hiring.

Geo-adjusting is the norm: The vast majority of companies (84%) consider employee location when determining compensation packages. Startups with smaller valuations are more likely to adjust salaries by location. However, even at the highest valuations, for example, within companies valued between $1B and $10B, 74% still adjust salary & equity compensation by location.

The Big Four of Top Salaries: Four metropolitan areas support the highest pay packages. These include San Francisco, San Jose, Seattle, and New York.

• Salary levels are gradually moving toward convergence as remote work becomes more prevalent. The highest pay tends to be in the West, with the Midwest falling behind (Only Chicago-based employees tend to make 90% of the top salary figures).

Engineering is a key hire: Engineering roles account for nearly half of payroll spending in companies valued between $1M and $10M.

Terminations rise: Involuntary terminations reached 29% of all employee departures in May 2022 (with the rest being voluntary). That is nearly double the 15% figure from August 2021.