The word “startup” evokes an image of a bunch of highly-paid twentysomethings, long on technology skills, and short on loyalty.
But how true is the stereotype of the startup?
Using a dataset of more than 20,000 companies and their employee profiles compiled by data scientists at Namely, a global HR and payroll platform for growing companies, we now have a closer look on a statistical level at the key differences between startups and older companies—who works for them, what they get paid, and how long they stick around.
The data distinguishes a startup as a company that is venture funded and fewer than 10 years old. Of the 20,000 firms, 37 percent are startups, 63 percent aren’t. The majority are in the U.S.—particularly in New York, where Namely is based—though 41 percent are outside the U.S.
Yes, folks working at startups make more. This may reflect the extremely high concentration of startups in competitive labor markets in the Bay Area and New York City. But the gap with tech is huge, across several job types.
The tech side sees the largest gap, probably because a tech employee at a startup is much more likely to be a software developer than to work in IT support.
Salaries are substantially higher across the board, but perhaps the more surprising thing is how much more people in sales make. It might be that startup sales, getting people to adopt a product from a tiny new company is a particularly specialized skill with a limited number of practitioners in high demand.
Median Employee Salary by Job Function
Startups tend to have more people in their early- and mid-20s. More than half of startup employees are below 30, compared to 42 percent at non-startups.
There’s a much longer tail of ages at non-startups as well: 22.1 percent of their employees are over 40, compared to 15.8 percent at startups.
Percentage of Employees at Each Age, by Company Type
The data is skewed a bit by the fact that many of the companies categorized as startups are just a few years old, but the average employee at a startup has been there for a very short time.
On average, more than half of the employees of a startup have been there for less than a year. The average tenure at a startup is 10.8 months, versus almost a year and a half (17.5 months) at a non-startup.
Employee Tenure in Years, by Company Type
Unsurprisingly, there are dramatically more tech employees at startups, and a higher proportion of sales employees as well.
The “other” section below is so large because it includes profiles of people who have been recently hired, or haven’t had their profiles completely filled out for another reason. Other employees who defy easy categorizations, interns for example, might end up in that group as well.
The outsize number of “creative” employees in the non-startup bucket might have something to do with the particular composition of this dataset: Since a disproportionate number of Namely’s clients are in New York, there’s some over-representation of advertising, design, and other firms that do a lot of creative work.
Percentage of Employees by Job Function
The technology industry has a gender problem. The numbers released by big companies like Google, Apple, and Facebook show that men have a substantial majority in leadership and technical jobs. It would appear the same is true for startups.
The greater technology intensity of startups shows up in the gender breakdown–there are substantially more men than women in both cases, but it's particularly true for startups.
Percentage of Employees by Gender
A further breakdown shows a huge divide at startups. More than 80 percent of technology employees are men, by far the biggest differential.
Percent of Startup Employees by Gender, Job Type
Non-startups also have a gap in technology, but it’s substantially smaller. Beyond that, the gender split is pretty similar between the two types of companies.
Percent of Non-Startup Employees by Gender, Job Type
Namely’s data confirms a lot of the assumptions we make about startups. But it raises a number of questions. What are the consequences of bringing on lots of young employees who seem primed to jump to the next opportunity? Why are startups paying so much more for finance and sales employees? And perhaps most worrying: Why does the gender gap remain so acute?