29-2-2024 (SINGAPORE) Startups in Southeast Asia have witnessed a substantial increase of up to 20% in salaries for new hires in business development and sales positions, according to a report released on Thursday. The annual report, compiled by Singapore-based staffing platform Glints and venture capital firm Monk’s Hill Ventures, highlights the pressing need for young companies to generate cash in the face of a more stringent funding landscape.
The study analyzed over 10,000 data points from Glints’ job postings for startup roles in Singapore, Indonesia, and Vietnam. Additionally, it incorporated insights from interviews conducted with over 70 early-stage startups in the region. The findings revealed that average salaries for business development and sales roles experienced a more significant increase compared to four other key positions: engineering, marketing, data, and product development. Salaries in business development and sales rose by an average of 2% from the previous year.
In contrast, engineering roles faced the biggest decline in salaries, influenced by ongoing tech layoffs and cost-cutting measures. These factors resulted in an increased pool of available tech talent, thus exerting downward pressure on salaries. Engineering salaries witnessed a 2% decrease in 2023, with junior roles experiencing the sharpest decline of 6%.
“The challenges faced in the past year within a tightening market have underscored the need for adaptability and resilience,” remarked Oswald Yeo, the CEO of Glints. Startup funding in Southeast Asia declined by more than half to $7.96 billion in 2023 compared to the previous year. Deal activity also dropped by 30% to 718 deals, as more investors favored profitable companies amid higher interest rates.
Consequently, startups were compelled to conserve cash and reduce costs as raising capital became more arduous. Even large tech companies faced the impact of these circumstances, as evidenced by reports of e-commerce operator Lazada cutting up to 30% of its Southeast Asian workforce due to intensifying competition.
The report noted that the Singapore market fared better than Indonesia and Vietnam. Although salaries in Singapore continued to grow, the pace slowed compared to previous years. Startup salaries for both tech and non-tech roles in Singapore increased by 5%, while Indonesia and Vietnam experienced a decline of 3% in 2023.
Overall, over 40% of the surveyed startups stated that they had reduced their hiring budgets over the past year, while 22% reported no change. Among those with reduced budgets, 43% attributed the cuts to limited access to funding or capital.
The impact of layoffs and cost-cutting measures was most significant in the engineering function, with Indonesia and Vietnam experiencing the largest declines of 7% and 4% respectively.
Despite the slowdown in technical roles, the position of Vice President for Engineering emerged as the highest-paid, with a median annual salary of $193,200. This was followed by Vice Presidents for Product Development and Data, with median annual salaries of $170,400 and $158,400 respectively.
“In today’s market, simply hiring people to aid in scaling is no longer a viable option,” emphasized Cheryl Liew, Head of Talent at Monk’s Hill Ventures. “Startups must demonstrate product-market fit and a clear path to profitability, emphasizing efficiency and productivity.”
