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Article | Beyond Data

10 trends affecting talent and pay in Europe’s tech sector

By Ebba Tamm and Nicholas Essel | February 22, 2024

Understand this year’s challenges and opportunities to prepare for the implications to talent, pay and advancements in the tech industry.
Compensation Strategy & Design
Beyond Data

Europe’s technology market is experiencing transformative changes that are reshaping the industry. From the impact of inflation on wages to the rising importance of data protection roles, we have identified 10 key trends that are influencing this dynamic market. Understanding these challenges and opportunities is essential for compensation and HR professionals – as well as their organisations – to effectively navigate these changes and be prepared for the implications to talent management, compensation and technological advancements.

  1. 01

    Erosion of purchasing power

    Inflation is having a profound impact on the European economy, particularly in terms of living costs and employee wages. With inflation rates climbing, real wages – the actual purchasing power of an employee’s earnings – are seeing a noticeable decline. This erosion of purchasing power presents a significant challenge for employees, as their salaries are not stretching as far as they used to.

    This situation places considerable pressure on employers in the region, forcing them to navigate economic changes while striving to maintain competitive compensation packages. This necessitates a delicate balance as businesses seek to offer attractive salaries that keep pace with rising inflation without overextending their financial resources (see Figure 1).

As inflation continues shaping Europe’s economy, organisations across various sectors find it imperative to reassess and adjust their compensation strategies. The key challenge lies in responding effectively to these economic shifts without compromising on their ability to attract and retain talent. This requires a dynamic approach to compensation planning, with businesses staying vigilant about economic trends and being prepared to adjust as needed.

Employers also must consider the broader implications of inflation on employee morale and engagement, ensuring that their workforce feels valued and equitably compensated. The impact of inflation on wages underscores the need for a strategic overhaul in compensation planning, which leads to a broader focus on enhancing the overall employee experience.

  1. 02

    Increased focus on the employee experience and, by extension, pay

    There has been a marked shift in corporate focus toward enhancing the overall employee experience. This change is driven by shifting workforce expectations and a dynamic market. Companies are recognizing the significance of creating a work environment that is about more than fulfilling job responsibilities; it also is about supporting and engaging employees.

    This strategic pivot involves a comprehensive approach to employee wellbeing, encompassing everything from workplace culture to career development opportunities. The goal is to create an environment in which employees feel valued and motivated, in turn leading to improved productivity and retention. Simultaneously, organisations are grappling with rising costs of compensation programs. In addition to base salary, these costs also include comprehensive health and wellness benefits, which are becoming increasingly important in attracting top talent.

    In the European technology market, 51% of companies in our 2023 Benefits Trends Survey said rising costs were influencing their benefits strategies. Employers must find ways to offer attractive compensation packages while managing the financial sustainability of their businesses. This balance is crucial for maintaining an organisation’s position as a desirable employer. It requires a keen understanding of market trends, employee expectations and financial acumen to develop compensation strategies that are both attractive to employees and viable for the company.

  2. 03

    Top paying jobs in Europe are shifting

    In our 2023 Western Europe Tech, Media & Gaming Compensation Surveys, technology-related roles, including systems architecture, tech product management and cloud architecture, are among the highest paying jobs, reflecting the high value on tech expertise. These roles are critical in driving technological innovation and supporting the business’s digital transformation. High compensation for these roles indicates the competitive nature of the tech industry as well as the scarcity of top-tier talent (see Figure 2).

  3. Top paying jobs in Europe
    Figure 2. Top 3 highest paying jobs across 11 European countries 
    Source: WTW 2023 Western Europe Tech, Media & Gaming Compensation Surveys
    Top 1 Top 2 Top 3
    Belgium Technical writing Sales, marketing and business development Engineering
    France Strategic alliances Cloud computing architecture General operations management
    Germany Government relations Application-specific integrated circuit IT performance management
    Ireland Systems architecture Computer control systems electronics engineering Machine learning
    Italy Journalism – writing/reporting news Customer success management Intellectual property/patent law
    Netherlands Services purchasing
    Technology product development – creative design/industrial design
    Accounting policy and research
    Spain Government relations Technology product management
    Community affairs/relations
    Sweden Intellectual property/patent law Personal data privacy compliance Website traffic analysis
    Switzerland IT performance management Business continuation Systems architecture
    United Kingdom Mergers and acquisitions Technology product management Front-end development

    However, there are notable regional variations in top roles and compensation levels in Europe, reflecting diverse economic conditions and markets. For instance, given that Sweden is an innovation hub, intellectual property/patent law is a top paying job right now. The Netherlands hosts many European company headquarters, which makes services purchasing a logical role to hold the title of highest paying job. We also see tech roles commanding higher salaries in different regions.

    Understanding these differences is crucial for companies as they develop talent acquisition and compensation strategies that are region-specific and align with local market conditions.

    1. 04

      Skills-based pay is taking center stage

      Organisations are adopting various strategies for skills-based compensation in response to the high demand for certain skills, especially in the technology sector. Our 2023 Digital Transformation Practices survey found that many companies typically manage in-demand skills with informal strategies rather than established policies. However, the trend of companies implementing formal policies for this purpose has increased in recent years.

      The survey also found that the most common approach – employed by 56% of organisations – is to position employee salaries at the upper end of the pay scale. Following this, 52% of organisations opt to set the starting salary for jobs at a higher market percentile, often at the 75th percentile. In addition, 39% of companies are offering hiring bonuses (see Figure 3).

In the competitive technology sector, attracting top talent often hinges on a compensation package that adequately reflects the value of the skills an individual brings. Retention and hiring bonuses have become common tools for employers to differentiate themselves and to attract candidates with highly sought skills.

This approach is not just about offering higher base salaries; it includes additional incentives that reflect the market value of specific skills. As the demand for specialised skills continues to rise, employers need to remain agile and innovative in their compensation strategies to stay competitive in the talent market.

  1. 05

    New-hire premiums play an important role

    Offering higher premiums for new hires, particularly those in technology roles, signals a highly competitive job market where experienced professionals can command significant pay. This phenomenon is not limited to tech roles; it also is evident in supporting functions such as supply chain and customer support. This trend reflects the increasing recognition of the value of experience and specialised skills in the job market (see Figure 4).

  2. Disciplines paying the highest new-hire premiums
    Figure 4. New-hire premiums range between 11% and 27% depending on discipline and location
    Source: WTW 2023 Western Europe Tech, Media & Gaming Compensation Surveys
    Discipline  New-hire premiums 
    Ireland Advertising/Marketing communications 24%
    Supply chain and logistics generalist 19%
    IT administration generalist 19%
    IT generalist  17%

    Software quality assurance, testing and release 23%
    Technology/Digital product owner  17%
    IT generalist
    Agile/Scrum master project/program management  13%

    Back-end development  25%
    Technical customer support – customer site 12%
    Technology/Digital product owner 11%
    Digital content management 11%

    Database design and analysis 27%
    IT service delivery and relationship management 19%
    Full stack development  16%
    Internet/web application development  15%
    Sweden Information security and cyber security 20%
    Application engineering  20%
    Supply chain and logistics generalist 16%
    Sales, marketing and business development generalist 

    This competitive landscape requires companies to be strategic in their talent acquisition efforts. Offering new-hire premiums has become a key tool in attracting top talent, especially in areas in which the demand for skills outstrips supply. However, this approach also requires careful financial planning and budgeting to ensure that compensation strategies are sustainable and align with long-term business goals.

  3. 06

    Long-term incentives and performance bonuses are differentiators

    The tech industry’s focus on long-term incentives (LTIs) for tech roles versus non-tech roles indicates a strategic approach to compensation. This trend, especially prevalent among U.S.-based tech companies, underscores the importance of LTIs as a key component of competitive total compensation packages.

    LTIs are used not only as a reward for current performance, but also as an incentive for future contributions and retention. The use of LTIs reflects the industry's commitment to fostering long-term employee engagement and loyalty.

    However, an analysis of performance bonuses in tech reveals a gap between target bonuses and actual payouts, suggesting a need for realignment of performance targets in the post-pandemic business environment. This discrepancy may be attributed to the changing nature of business goals and performance metrics in the wake of the pandemic’s impact.

    Companies may need to reassess their performance evaluation criteria and ensure that targets are realistic and aligned with current market conditions. This realignment is crucial for maintaining employee motivation and ensuring that performance bonuses effectively incent and reward desired outcomes.

  4. 07

    The regulatory landscape is affecting which jobs are in demand

    The technology sector is witnessing significant shifts in job demand, reflecting a shifting regulatory landscape. For example, the role of data protection officers has gained prominence, particularly in Europe, according to our 2023 Technology Talent Intelligence Report. This prominence is being driven by the increasing importance of data security and privacy in the digital age. It also highlights the need for experts who can navigate complex regulatory environments and safeguard sensitive information.

    Conversely, other roles (e.g., talent acquisition partners) are experiencing a decline in demand. This trend may be influenced by evolving recruitment strategies and a shift in organisational needs. It also suggests a reallocation of resources toward roles that are more critical in the current tech landscape. This shift in demand for specific roles underscores a broader transformation within the tech industry, indicating a reassessment of priorities and the most valued skill sets (see Figure 5).

  5. Top 10 rising and declining jobs across the tech sector in Europe
    Figure 5. Emerging vs. declining jobs in the tech sector
    Source: WTW 2023 Technology Talent Intelligence Report – Europe
    Rank Emerging jobs Declining jobs
    1 Data protection officer Talent acquisition partner
    2 Finance manager IT service desk analyst
    3 Enterprise system architect
    Data architect
    4 Buyer Technology product designer
    5 Customer service representative Channel sales specialist
    6 Technology product engineer Administrator
    7Risk analyst
    Software engineer
    8 Service delivery manager Solution architect
    9Financial analyst Customer engineer
    10 Sales operations support Product manager

  6. 08

    AI is a priority (and so is the talent that supports it)

    With rapid advancement and integration of technologies like artificial intelligence (AI) across various sectors, there is an ever-growing need for individuals who not only understand but also innovate these technologies. Software engineers, application developers and other tech-related positions continue to be in high demand in the European tech sector, according to WTW’s Talent Intelligence Report. The increasing need for AI-related expertise is particularly noteworthy.

    This trend underscores the market’s high valuation of technological skills and the constant search for professionals who can drive business growth through technological advancements. As AI continues evolving and finding applicability in diverse fields, the demand for skills in machine learning, data science and AI integration is soaring. Professionals with the ability to harness the power of AI are finding themselves at the forefront of the job market, with organisations vying to secure their talent. In turn, this is reshaping the job landscape, making it imperative for current and aspiring tech professionals to continuously update their skills and knowledge in these cutting-edge areas.

  7. 09

    AI and automation are reshaping roles

    AI and automation are poised to significantly reshape job roles, particularly this year. This technological advancement is expected to create new roles and evolve existing ones, while potentially rendering some traditional roles obsolete. The integration of AI into business processes highlights the need for an adaptable workforce equipped with the skills to work effectively with these emerging technologies.

    This shift presents both challenges and opportunities for businesses and employees alike. Companies must proactively adapt their talent strategies to prepare for these changes, investing in training and development to equip their workforce with necessary skills. For employees, this evolution presents an opportunity for growth and skill enhancement, emphasizing the need for continual learning and adaptability in a rapidly changing technological landscape.

  8. 10

    Solving digital talent and digital skills gaps through talent development

    Attracting and retaining digital talent is a significant challenge facing organisations today, with 93% of respondents to our Digital Transformation Practices survey reporting difficulties. This highlights a pronounced talent gap in the digital domain, particularly acute in specialised areas in which demand far exceeds supply.

    The digital era has accelerated the need for skills in areas such as data analytics, software development and AI, creating a competitive environment for hiring skilled professionals – as evidenced in the top 20 skills in demand in our 2023 Talent Intelligence Reports (see Figure 6). Businesses are feeling the pressure to not only find but also retain individuals who possess these high-demand digital skills.

  9. Top 20 skills with a strong demand across the tech industry in Europe
    Figure 6. Top 20 in-demand skills

    Source: WTW 2023 Technology Talent Intelligence Report – Europe

    The implication of this trend extends beyond solely talent acquisition; it calls for a re-evaluation of talent development strategies. Organisations are compelled to explore new methods for sourcing talent and investing in comprehensive training and development programs. Focus has shifted beyond attracting digital talent to nurturing and developing skills among the existing workforce.

    This approach not only fills immediate skills gaps, it also builds a sustainable talent pipeline that can support future business growth and innovation. As companies grapple with talent acquisition and retention challenges, it intensifies the need for a comprehensive talent development strategy.

    Take a strategic approach in an ever-changing landscape

    The European technology and media market is at a pivotal juncture, characterized by significant shifts in job roles, compensation strategies and technological advancements. These trends reflect the ongoing evolution of the market, driven by factors such as AI, automation, and changing influences and dynamics in the workforce. As companies grapple with these changes, they face the dual challenge of attracting and retaining top talent while adapting to new technological realities.

    The insights from these trends not only highlight the current state of the market, but also shed a light on the strategic considerations necessary for success in this ever-changing landscape. Looking ahead, businesses and compensation and HR professionals in the tech sector must remain agile, embracing these trends as opportunities for innovative growth.


Tech, Media & Gaming Associate, Rewards Data Intelligence
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Tech, Media & Gaming Associate, Rewards Data Intelligence
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