Product is still a fairly new discipline and for many businesses is something that is only just receiving full investment for. A sudden increase in demand for Product talent such as Product Owners and Product Managers has caused Product recruitment to become increasingly challenging. The Product space is a candidate short market with a huge talent gap and skill shortage. So, what are the impacts of that, and how can businesses address the shortage to stay ahead of their competitors?
As many businesses shift their focus onto becoming product centric the demand for top Product Talent grows and this has therefore pushed salaries upwards as businesses fight to attract candidates. Recently I have seen evidence of basic salaries jumping by £15,000 - £20,000 just to retain talent as businesses benchmark their product salaries higher than ever before, especially in larger organisations. This is going to create a cycle.
As businesses heighten salaries and continue to throw more and more money at the market, candidate expectations of salary over the next 12 months are only going to increase. This means businesses are at risk or overpaying for a lack of experience. For example, a year ago, a traditional Product Owner with 3 years-experience would receive an average salary of £45,000 - £50,000; now they expect nothing less than £60,000 - £65,000. Unfortunately, this means that small to medium businesses are struggling to hire the right talent, because they are constantly being outpriced by bigger companies who have the financial ability to invest as much money as they want in talent.
As this continues an even bigger skill gap will become apparent. Companies who are not able or willing to pay market prices will find themselves struggling to recruit product talent. This will have long-lasting effects on their projects and business goals as they struggle to hire product talent to push the required deadlines through. In response to this, companies may end up hiring the wrong people culturally, just to push these projects through, which has long term detrimental effects.
Additionally, the power sits with the candidates, meaning that they are able to be pickier about the roles that they apply for and will only move for exceptionally interesting, motivational, or inspiring roles. However, this candidate power may not last forever.
If the market settles down, for candidates who are looking to move roles, there will be a much higher responsibility and level of accountability for experience you may not have but is expected at higher salaries. This means you may struggle to move roles in the future as you may not have the skills or experience necessary or will at least be looking at a significant pay decrease. This will holt progression and likely slow down professional development. We may even start seeing a trend of people taking a step backwards.
For businesses looking to build or scale their Product teams, planning and forecasting is extremely important. This helps with pipelining talent, prioritising projects, and budgeting. Maxwell Bond have published an up-to-date Product salary guide as part of our wider tech salaries series, that gives you live views of market expectations and average salaries for Product talent in the North-West and London. You can use this as a tool to get sign off or suggest changes to proposed salaries to drive recruitment and help secure the talent you want.
As a business you should also become comfortable with a certain level of turnover. Don’t be scared to lose people – if someone wants to leave; throwing money for them to stay will definitely do more harm than good in the long run and could create internal issues with pay discrepancy.
When hiring you should also remain open to different profiles and experience, and hire based on culture-fit! Consider candidates who are currently at 70% but are keen learners and just need more training to get up and running. Be willing to make that investment in your people. By building people into your team like this, you build their confidence and skills, but also their loyalty to your business.
An attractive salary can be tempting, but there is so much more to a role than just pay. It’s important to consider all the opportunities that a role has to offer and not just pick a role based on money alone. Money isn’t everything and it could jeopardise your future career if you take a salary that exceeds your experience. As mentioned above you may end up stuck in a role just to maintain your salary or need to take a step backwards and a pay cut.
It’s also important not to immediately rule out a role because you don’t like the industry. It’s worth at least taking part in an initial conversation – you may be very surprised about what you find out a business and the opportunities it may provide. It’s good to be open minded!
If you’re looking for your next Product role or are ready to start building and scaling your Product teams to deliver on your business goals, get in touch directly on LinkedIn or by email (email@example.com). Maxwell Bond have a proven track record of exceptional Product Talent Delivery by dedicated Product Teams across the UK and Berlin.