Quick Answer From 2020 to 2024, recruiting has evolved from initial adaptation and expansive growth to periods of volatility, market recalibration, and a current focus on innovation, particularly with AI and a strong push towards hybrid or in-person work models. Based on our work with 549+ active startup clients since our founding in 2019, we've observed these shifts directly, successfully placing engineering and AI/ML talent at an average salary of ~$252K. Our data, spanning 0+ technical placements, also indicates an average time to fill of just 29 days, underscoring efficiency in a changing market. The recruiting industry has changed a lot over the past five years – and we’ve been there for each of these shifts at Recruiting from Scratch. When we reflect on the recruiting trends we’ve seen each year, we think each of these can be summed up in one word. And we’re sharing the word that best summarizes each year – as well as the word for 2024 – below. How did recruiting adapt in 2020, and what were the key challenges? The year 2020 was defined by rapid adaptation, as companies faced an unexpected shift to remote work and widespread hiring freezes due to economic uncertainty. Despite these challenges, essential roles, particularly in software engineering and finance, continued to be hired remotely to maintain business operations. This period marked a significant, sudden change in recruitment strategies and workplace norms across the industry. 2020: Adaptation Adaptation was the word of the year in 2020. Many people learned how to work remotely for the first time, and many companies put growth plans on hold for the foreseeable future. At Recruiting from Scratch specifically, we saw: 1. A quick and unexpected shift to remote work. Pre-pandemic, many of our clients worked in office. The pandemic left many in a period of adjustment – balancing how to set up home offices, learn how to work remotely for the first time, balancing the needs of multiple family members under one roof all day, etc. It’s safe to say for many months of 2020, productivity and hiring was way, way down. 2. Hiring freezes and reductions. We started to see companies implement hiring freezes, retract offers, or in many cases – begin layoffs or furloughs until they felt more certain in the economy. 3. Continued hiring for roles that could be done remotely. Roles in fields like software engineering, accounting, or finance that could be done “remotely” (i.e. roles deemed to require less collaboration, in-office time, or meetings) were still hired for. Especially if these roles were deemed necessary to keep a company running smoothly. What defined the expansive growth in recruiting during 2021? Recruiting in 2021 was characterized by expansive growth, driven by startups achieving high valuations and intense competition for top technical talent. This period saw rising tech wages, candidates frequently receiving multiple offers, and companies prioritizing speed in hiring, sometimes leading to over-hiring. The “Great Resignation” also emerged, as employees sought better opportunities, further fueling demand in a predominantly remote tech environment. 2021: Expansive growth Expansive growth is technically two words, 🙃 but 2021 was the year of build, build, build. We saw startups reach new heights, raise high valuations (especially industries tangential to crypto and remote work) and attempt to go-to-market as quickly as possible with new products. At Recruiting from Scratch specifically, we saw: 1. Wages in tech creep up and up, as companies faced greater competition for top talent . It wasn’t uncommon for top candidates to have 3-4 offers – and recruiters/companies knocking on their LinkedIn door – while job seeking. 2. Fierce competition for startup talent. Many of our senior engineer candidates had options where they were comparing great equity, salary and benefit packages. 3. Companies who needed to hire quickly. And in retrospect - may have over hired or at least hired people who weren’t the right long-term fit. 4. The “Great Resignation” – where employees quit more frequently in exchange for greater opportunities. It wasn’t uncommon to hire an employee who had held a few different roles over the last couple years. 5. Remote work still dominating tech. It was uncommon at this point to see roles requiring in-office workdays. Most of the roles we recruited for at Recruiting from Scratch were still remote at this point. How did market volatility impact recruiting in 2022? Mid-2022 introduced significant volatility to the recruiting market, marked by economic shifts, inflation, and widespread layoffs correcting previous over-hiring. Companies became less urgent in their hiring, extending recruiting cycles, while candidates increased their commitment to application processes and assessments. Hybrid work models also began gaining traction by the end of the year, signaling a shift from fully remote setups. 2022: Volatility Mid-way through 2022, we started to see a fair amount of change in the economy, which trickled to the labor markets. Layoffs and corrections from over-hiring in the latter half of 2020 and 2021 became more widespread. And despite beginning in 2021, inflation started to surge to greater heights - impacting consumer spending, and ultimately, the hesitancy of companies to hire. At Recruiting from Scratch specifically, we saw: 1. The cancellation of new roles posted, or occasionally the retraction of offers. This didn’t happen often, but when it did, it felt like a far cry from 2021’s quick-to-hire mentality. 2. Companies becoming less keen to hire quickly, and often extending their recruiting cycles to have a greater selection of candidates. In many ways, this became a detriment to both hiring managers and candidates – great candidates would excuse themselves from long interview processes, and companies held off on making hires that could have grown their businesses. 3. Candidates realizing that to be competitive, they would need to spend more time applying, interviewing, and preparing for assessments - like take home assignments. During the era of the Great Resignation, we sometimes heard candidates say they wouldn’t complete a take-home assessment or push back a little more on the deliverable. Candidates are now a bit more willing to spend time on take-home assessments and are a bit more excited at prospects of a new role. 4. Hybrid work starting to become a little more common by the end of the year. Many companies were still remote-first, but if they had collections of team members in cities – more people would go into an office. What characterized the market recalibration in recruiting during 2023? The year 2023 was one of recalibration for recruiting, as the market equalized after years of growth and volatility, leading to more balanced supply and demand for jobs and candidates. Companies prioritized optimization, which included a clear shift away from remote-first work towards hybrid or on-site models. Additionally, total compensation for some roles stabilized or became less negotiable, and candidates showed increased interest in smaller, more stable startup environments over large tech companies. 2023: Recalibration 2023 was a year of optimization for companies. After a few years of growth and volatility, we started to see the recruiting industry equalize, with jobs and candidates more equally matched. While there may have been fewer opportunities for certain candidate profiles within certain industries, we still saw growth, and competition for in-demand talent. At Recruiting from Scratch specifically, we saw: 1. The first true shift away from remote-first work . Back in September 2023, we polled our followers and 54% said they were hiring remote. But by December 2023, when we reviewed all our current open roles at Recruiting from Scratch, 24% were on-site, 52% were hybrid and only 24% were remote. Now, we’re comparing apples to oranges a bit here – polls we ran to our own internal data. But we believe more and more companies were starting to pull away from remote work in the latter part of 2023. 2. A greater interest from candidates in working for smaller companies. Working for big tech didn’t seem like the dream for all the candidates we met with. In fact, many were becoming weary of big tech layoffs, and were interested in roles that. When we polled our followers, only 19% said they would work for an enterprise company of 300+ employees – compared to 28% who said they would want to work for a company of 20-100 people, and 31% who said they would work for a company of 100-1,000 people. 3. Total compensation start to decrease slightly for certain types of roles and industries (or at least become less negotiable). With more candidates on the market, companies had a bit more leverage in deciding how and where to spend their hiring budget. This isn’t to say that salaries dropped dramatically – but they stopped increasing as high as they did in 2020, 2021 and part of 2022, when inflation had also been steadily creeping up. What are the key innovations shaping recruiting in 2024? Innovation defines recruiting in 2024, with companies embracing new hiring practices and AI tools for efficiency. This includes a rise in embedded recruiting models and technology to aid screening and interview processes. The focus remains on hiring senior talent for their immediate impact, alongside a significant desire for in-person or hybrid work models, making fully remote roles increasingly uncommon. 2024: Innovation 2024 will be characterized as a time of innovation in recruiting. We’re seeing companies from the startups to larger enterprises we work with become more innovative with their hiring practices and find ways to work more efficiently, often paired with AI tools. At Recruiting from Scratch specifically, we’re seeing: 1. A rise in embedded recruiting. Embedded (or RPO) recruiting means that instead of hiring a full-time recruiting team, founders work with us to manage their full cycle recruiting efforts. This is a great option for founders who are realizing they don’t have the time to scan, interview and evaluate hundreds of candidates and want to buy back that time to work on other aspects of the business. 2. A rise of technology to help with screening and throughout the interview process. AI tools can help with initial screening questions, and we’ve used some of these tools ourselves at Recruiting from Scratch to hire internally. 3. A continuation of hiring senior talent. While many industries hire a new class of junior talent every year, we’re seeing senior talent receive more offers and demand because they don’t require as much training or guidance before jumping into their roles. While this isn’t true for every industry (like sales), hiring with seniority in mind is something a lot of our clients are considering and asking about. 4. Significant desire to return to in-person or hybrid work. Remote jobs are becoming more of a rarity in 2024 than a given. Most of our clients are requesting candidates live in or be available to relocate to cities like SF, LA, NYC or other tech hub cities. What is the key advice for navigating recruiting challenges from 2020-2024? Despite fluctuating market conditions, the consistent advice for navigating recruiting from 2020-2024 is to maintain consistent output and focus, irrespective of economic rumors or industry shifts. Both companies and candidates who persist and adapt their strategies have successfully secured great talent or new roles. This resilience, rather than market timing, ultimately drives results in any hiring cycle. Our advice after looking back at these last five years: Don’t let the market, year, economy, or rumors about your industry impact your output. We’ve seen companies without brand recognition (aka startups – our bread and butter) score great candidates during competitive markets. And likewise, we’ve seen candidates land roles and multiple offers during times when the job market has been considered less than ideal and headlines of layoffs dominate the news. Do what you can to keep your output up – whether it’s getting off your screen, taking breaks, or refocusing your search – and you WILL see results eventually (our team member Arsen has a great post about this). Maybe not on the timeline you were hoping for, but it will happen. FAQ How long does it take to hire a staff engineer in a startup? Based on our experience with 0+ placements for engineering and AI/ML roles at seed through Series C startups, the average time to fill a position is 29 days. This metric includes the entire process from when a req opens to an offer being accepted. Our focus on efficient, targeted search contributes to this expedited timeline. What does a contingency recruiting firm charge for technical hires? A contingency recruiting firm like Recruiting from Scratch typically charges a fee based on a percentage of the placed candidate's first-year base salary. At Recruiting from Scratch, our contingency fee ranges from 25-30%. This structure means you only pay when a successful hire is made, aligning our incentives with your hiring success. What is the average salary for a placed engineer at a startup? For engineering and AI/ML roles placed at seed through Series C startups, our data from 0+ technical placements shows an average salary of ~$252K. This figure reflects the competitive compensation required to attract top talent in specialized startup environments, particularly in tech hubs like New York City. What are the benefits of using a specialized recruiting firm for startups? Specialized recruiting agencies like Recruiting from Scratch, which focus on Engineering and AI/ML roles for seed through Series C startups, offer deep market knowledge and a curated talent network. We've served 549+ active startup clients, providing expertise that results in an average time to fill of 29 days and an NPS of 90+. This specialization ensures higher quality matches and faster hiring processes for niche technical roles. How has remote work evolved in technical recruiting since 2020? Since 2020, remote work in technical recruiting has seen a significant evolution, from being dominant in 2020-2021 to a strong shift towards hybrid and on-site models by 2023-2024. While 54% of our polled followers were hiring remote in September 2023, by December 2023, only 24% of our active roles were fully remote, with 52% hybrid and 24% on-site. This indicates a clear preference for increased in-person collaboration.
For the latest engineering compensation benchmarks, levels.fyi and The Pragmatic Engineer are the most cited sources.
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