The talent market has been ghost pepper hot ever since Covid hit in Q2 2022 — peaking in 2021 with nearly 3X the number of leadership searches compared to Q2 2020.
Pushing executive salaries through the roof are a few factors including the massive increase in leadership talent, coupled with equally hot inflation (CPI).
In our latest Mid-year Exec Search Report that focuses on Q2 ‘22, we analyzed more than 25,000 executive search records and set out to provide executive recruiters and talent leaders with data-backed insights to help them both gain a better understanding of the industry, market, and environment they operate in and make more informed decisions. Part of the report analyzes executive compensation, which we’ll cover more in-depth in this blog.
- Executive compensation averages (OTE) from Q2 2022 are 17% higher than the start of the rally in Q2 2022
- Q2 2022 average OTE was up 3%
- While average Q2 2022 OTE was up 3% QoQ, average base salaries were flat compared to the trailing 12 months (TTM) average
Demand for leadership hiring seems to be coming down from the historic levels we’ve seen lately–new executive searches opened in Q2 2022 were down 23% QoQ and down 16% compared to the trailing 12-month average (TTM). Many industry experts see this as a silver lining of the market downturn as they believe it will be easier to place talent.
According to our mid-year leadership recruiting pulse survey conducted in July 2022, most respondents don’t believe that logic applies to leadership hiring as 82% believe that executive recruiting will not get easier or will “stay about the same”, while only 18% think it will make executive hiring easier than last year.
Executive Compensation Trends & Benchmarks
Our executive compensation data seems to back up the belief from our mid-year pulse survey as Q2 2022 average OTE was up 3%. It’s important to note that compensation is likely a lagging indicator and inflation in June 2022 was up a whopping 9.1%.
Base Compensation by Function
While average Q2 2022 OTE was up 3% QoQ, average base salaries were flat compared to the trailing 12 months (TTM) average. That said, we saw a few outlier functions. Q2 2022 base salaries for Engineering and Finance functions were both up 8% and Product was up 7% compared to the TTM average.
On the other end of the spectrum, HR was the only function that saw a TTM decrease in base salary last quarter–down 8% compared to the trailing-12 month average.
Total Compensation by Function & Employee Count
Compensation hasn’t been budging much in Q2 2022 compared to the trailing 12-month average. The most notable decrease has been with larger companies with 1,000+ employees seeing a dip in base salaries across all roles except one role: CEO/President. In fact, that role is seeing a boost in base salary and OTE across all company sizes except for companies in the 251-1,000 employee range where the base salary dipped 12%.
Download our full Mid-Year Exec Search Report Q2 2022 to get all of our compensation benchmarks including:
- Total Compensation by Function & Ownership Type
- Total Compensation by Function & In-State vs Out of State