The salaries of top managers with digital experience have risen rapidly in recent years – despite the recession and multiple crises. Last year, managers at the so-called C-level, i.e. the highest management level in the company, earned an average of 319,127 euros. This was determined by the headhunting company I-Potentials, which helps companies from start-ups to medium-sized companies to large corporations to fill such positions. In 2021, digitally savvy managers still earned an average of 302,773 euros. In the past decade, income has increased by a good ten percent annually – that is, significantly more than the average salary and also more than top salaries for other management positions.
“It’s a highly competitive market,” says Martina van Hettinga, one of the heads of I-Potentials. “There are too few who have both a modern management style and can make decisions for companies based on knowledge of modern technologies and markets.” Digital expertise is proven by having managed a digital start-up beforehand, for example. There aren’t many people like that anyway – and at the same time the number of companies that urgently need them is increasing.
This is mainly due to the fact that it has changed which companies are actually looking for executives who are well versed in technology. Twelve years ago, says van Hettinga, she would have organized trips to Silicon Valley with managers from German medium-sized companies. The entrepreneurs were very impressed there – but often went home afterwards with the feeling that none of this had anything to do with them and their business. That changed at the latest with the pandemic, says van Hettinga. “Corona was like a catalyst, everyone suddenly had to go digital.” And for that, everyone suddenly needed people.
Anyone who is in such demand can easily negotiate high salaries. According to van Hettinga, 2 to 5 million euros per year are possible, depending on the industry, the size of the company and the urgency of the appointment. “There is no upper limit.” Salaries are highest outside of the metropolises, especially in Hesse. However, many managers also decided to forego part of the salary and instead demand more flexibility, such as the option of working from home and not having to move to the new company headquarters.
More remote companies take longer to search – and pay more
The average search for a new top manager takes four months. In more remote locations, it could easily be extended by six to twelve months. After signing the contract, it usually takes another three to six months until the new manager actually starts work, which is due to the notice periods. One factor that makes the selection of candidates much smaller is that many companies still insist that the top people speak German. Almost exclusively start-ups that have received money from international venture capitalists or European branches of international corporations could live with the fact that the new chief technology officer only speaks English.
A modern management style is now also an issue for many medium-sized companies. HR consultants therefore use standardized diagnostic procedures to check the strengths and weaknesses of the candidates beforehand, including personality tests. “Many companies want managers to establish a healthier error culture than is common in Germany,” says van Hettinga.
How hotly courted tech managers are has also been shown in the past few months by the speed with which available people get new jobs. In the US and also in Europe, many large tech companies and start-ups, including Amazon, Meta and Yahoo, have laid off thousands of people. After the layoffs, the founders and bosses of the companies often published lists of those laid off on the LinkedIn social network so that they could find new jobs as quickly as possible. “Within two weeks, almost everyone was redistributed,” says van Hettinga. “When many medium-sized companies in Germany noticed that these lists existed, many top talents were already gone.”