NEWHR continues its series of expert pieces on the real cost of hiring on today's market. We have already written about what helps to headhunt product and data analysts and heads of analytics; now let's talk about the product team.
Today the focus of our hunting analytics is the CPO.
As usual, we will describe in detail:
- how much it costs to hire a strong CPO now;
- what raises/lowers their cost;
- what else, besides money, increases the chances of attracting a candidate.
In this review we look specifically at hiring heads of product. We will cover product managers in the next article in the series.
This is expert analytics from the international recruiting agency NEWHR, based on data we received directly from candidates and employers during 2024.
Why does this matter?
At NEWHR we know how important it is for employers to rely on real data when planning a hiring budget, and for candidates when entering the market and assessing their own value as specialists. That is why we publish our public hunting analytics and produce salary analytics for companies. Our goal is to make the labour market more transparent and understandable.
Who we are writing about
First of all, we are writing about Russian-speaking CPOs from the IT/Tech industry who work at product technology companies in both B2B and B2C.
Most of the specialists we assessed are not actively looking for a job but are open to interesting offers. Such candidates are usually ready for work that is interesting in terms of professional growth and other prospects.
We did not include in our assessment candidates who are urgently looking for a job and are therefore potentially ready to accept what the market offers instead of offers that genuinely interest them.
What a CPO does
- Is responsible for developing the company's key product or product portfolio.
- Solves strategic problems, most often directly tied to money and the business's key metrics.
For example: growing market share and revenue, entering new markets, modelling product economics, defining key metrics, working on pricing, setting up and optimising internal processes, etc. - Works with high-level metrics and breaks them down to the required level on their own.
How CPO income is structured
CPO income usually consists of several parts*:
- a fixed base salary;
- regular bonuses (quarterly, annual);
- one-off bonuses for delivering on specific agreements/projects;
- long-term incentives (LTI) and options.
*What exactly makes up the variable part of a CPO's income depends on each individual company's compensation policy.
A bonus component is almost always present in a CPO's compensation package. As a rule, it amounts to 10–20% of the base salary. However, in some cases (more often at B2C companies aiming for aggressive growth) the variable part of the salary can be much higher (from 50 to 100%).
Salary range
It is very hard to give an average figure for CPO salaries. Candidates with almost identical profiles may ask for amounts that differ by up to 50%. Quite possibly, such differences come from not understanding their own market value.
In this review we give averaged data, without the extremes.
CPO income (monthly, gross):
850 thousand–1.2 million ₽
CPOs working for Russian companies
up to 2–3 million ₽
CPOs from BigTech, who as a rule cost an order of magnitude more due to large bonuses and LTI
10–18 thousand $/€
CPOs working abroad
What raises a CPO's cost:
- A technical background: candidates who grew out of development or have experience with technically complex products usually sit at the top of the range.
- Experience with well-known and/or large-scale products.
- Experience building a product function and processes from scratch.
- Successful product cases, for example: launching a new vertical, growing a key metric, etc.
- Experience working with a data-driven approach or introducing one.
- For certain fields, experience with niche products.
What can lower a CPO's cost:
- Candidates from startups with no direct reports or with 1–2 reports may cost less.
- A change of domain. When moving into a new field that interests them, some candidates are willing to take a pay cut of up to 30%.
- A lower fixed salary in favour of LTI (relevant for candidates with an entrepreneurial mindset).
- No experience building product processes at a company.
- No standout successful cases of implementing a product strategy they developed.
How to headhunt a strong CPO?
What attracts CPOs first of all:
An interesting product
Every CPO has their own idea of an interesting product, but all candidates look at least at one of these criteria:
Prospects. The chance to work in a growing, developing market. For example, today many are interested in AI-related products.
A well-known brand. What matters here is not only, and not so much, popularity with a wide audience. A good product culture and a reputation among professionals will interest candidates just as much.
Usefulness and domain. Almost all experienced B2C candidates talk about the importance of the product niche. They find socially useful products especially attractive, ones that solve a specific pain for a large number of users (WellTech, MedTech, EdTech).
New challenges
These may be ambitious business growth goals or tasks related to a large-scale transformation of businesses and processes.
A good salary
Against the backdrop of an unstable market, financial compensation has become one of the most important factors in loyalty to an employer.
What increases a CPO's interest in a vacancy:
Building a product function from scratch.
Of course, many leaders will agree to scale existing products, but far more often we hear that CPOs are interested in building something from scratch.
Wider geography.
The chance to work with new markets. CPOs based outside Russia will be more interested in companies working on the global market.
A broader area of responsibility.
Many CPOs are interested in combining product development with other functions. For example, positions at the intersection of CPO and CMO, or CPO and commercial director.
A strong product team in place
or a willingness to build one (including allocating the necessary hiring budgets).
Factors that make a vacancy less attractive:
An inadequate development strategy.
Many CPOs ignore companies without ambitious plans. For example, large businesses for which 1% growth a year is already an achievement. The other extreme is unjustifiably large-scale goals without resources.
No analytics and no willingness to build it.
Experienced candidates value a data-driven approach to product work.
A bad reputation of the company or product.
Bad product reviews, unethical promotion practices or a controversial field in general (for example, Gambling).
No product culture at the company
and no readiness to let the CPO introduce one.
Familiar tasks.
The offer largely repeats the leader's current area of responsibility, brings no new challenges and no sense of the next stage of development.
Where does this data come from?
At NEWHR we have been researching the labour market since 2018 and talk directly to employers and candidates, so we see important trends as they develop. We supplement expert data with quantitative research (you can explore our latest market research here).
Adapted from the original article in Russian on newhr.org. Read the Russian version.