Executive Summary

The European tech-talent landscape is complex to navigate for founders and recruiters. While the continent is home to world-leading universities and a growing pool of quality engineers, talent is more geographically dispersed than ever before. Remote work, inflation and cost-of-living considerations are causing both talent and recruiters to reevaluate their assumptions about location.

To complicate the challenge, talent is widely but not evenly distributed. London, with robust investment and a vibrant startup ecosystem, continues to offer the largest pool of tech talent in the region by a wide margin and has the largest number of engineers for every speciality analysed. However, many other cities across the region demonstrate a higher per-capita density of talent for specific skill areas. For example, Barcelona is a mobile-tech hotspot, while Europe’s densest per-capita concentration of robotics engineers is located in Munich.

For founders and hiring managers, navigating this nuance is critical to finding the right talent, especially in a labour market that’s remained competitive despite headline-grabbing layoffs. To make sense of the current tech talent landscape, Sequoia created Atlas, a multimodal research and data-visualisation programme. It surfaces 24 cities with outlier talent density across 14 key engineering skill areas, as well as wider trends in the tech-talent landscape. The inputs into this project included:

• A survey of 125 recruiters and hiring managers at European startups in the early and growth stages
• A survey of 809 working tech engineers and 226 STEM graduates preparing to enter the workforce
• Qualitative interviews with 17 early-stage founders and recruiters
• Data analysis from sources including SeekOut, DealRoom, Ledgy and Remote.com

Atlas brings these findings together in an interactive tool and content resource that founders, recruiters and hiring managers can use to find the pockets of talent their companies need to succeed—whether you’re looking for a single remote hire or to set up a new engineering hub.

Key insights clearly emerge

Going remote? Location still matters

• Six in ten companies in our survey have permanent distributed teams and nearly two-thirds expect to have more remote employees in the coming years.
• This is particularly relevant for engineering teams. Among respondents who reported their company operates with some form of distributed teams, 78% stated that their engineers work in a distributed manner—a figure exceeding other teams by over 20 percentage points.
• Nonetheless, the location of talent still matters, with around three-quarters of recruiters citing accessing specialist skills in other cities as a driving factor in going remote, particularly with sought-after front-end and DevOps specialists.
• Companies are increasingly setting up remote hubs for specialist engineers, thus gaining both the benefit of top talent and the opportunity for teams to work together in person.
• As conveyed by founders interviewed for this project, the UK’s withdrawal from the European Union appears to have had no visible impact on these trends. It would seem that Brexit’s consequences have not disrupted the interoperability of Europe’s tech talent pool.

Compensation: The Great Levelling Out

• Increasingly, high-calibre engineers can command similar fees, regardless of where they live. Almost three-quarters of respondents agree that pay differentials are eroding between countries; eight in ten see this within countries.
• Saving on compensation is thus a declining factor for remote hiring. Less than half (45%) cited it as a reason for recruiting remotely, versus 74% who cited specialist skills in other locations.

Europe’s tech hubs

We have identified 24 cities with outlier talent density in 14 key specialities. Dublin ranked first in per-capita density for five of these—more top placements than any other city. However, outlier cities span the region and offer a diverse range of talent profiles, cultures and regulatory considerations:

• AI: Dublin and Zurich have the top per-capita concentrations of AI engineers, but cities across Europe are showing momentum, including Athens, Berlin and Paris.
• Application development: While many cities are well supplied with talent in this speciality, Lisbon, Barcelona, and Porto emerge as a top cluster.
• Databases: Portugal is a hotspot, with Lisbon and Porto home to the highest concentration of local engineers in this area.
• Data Science: Dublin stands out as a clear leader in this area, boasting almost double the European average. Berlin follows in second place.
• DevOps: Amsterdam and Dublin have the densest supply of these engineers.
• Finance: Dublin has the greatest concentration in this area, followed closely by Berlin and Athens.
• Front-end frameworks: The highest concentrations are in the east: in Vilnius and Tallinn, the local density is 60% higher than in the average European city.
• Gaming & graphics: Helsinki is rich in this speciality, followed closely by Vilnius and Stockholm.
• Hardware: Cambridge and Bristol have the densest concentrations of hardware engineers, followed by Munich and Stuttgart.
• Mobile: Barcelona has the highest density of mobile engineers—1.5 times the average European city.
• Robotics, drones & autonomous vehicles: Germany is the frontrunner, with Munich and Stuttgart each boasting double the average European concentration of local talent.
• Security: Dublin leads the pack here, with Tallinn not far behind.
• Server & cloud: Dublin is a clear leader in this speciality, with a secondary cluster comprising Amsterdam, Berlin and Lisbon.
• Systems: Gothenburg is an outlier for systems engineers, with a local talent concentration roughly 1.5 times that of the average European city.

Wider trends

A Talented Home for AI

Europe has a standout concentration of dedicated AI practitioners relative to its overall engineering talent pool: 30% higher than in the U.S. and three times as high as in China. These practitioners are highly educated and experienced—70% have a master’s or PhD, and slightly more have over ten years of professional experience. With the region pursuing a raft of investment and regulatory initiatives, Europe is poised to become a global AI leader.

Ukrainian Talent Proves Resilient

Ukraine’s renowned tech talent has proved surprisingly steadfast in the face of the war. Global tech employers have scrambled to retain and protect their Ukrainian employees, and there have been coordinated drives across Europe to link this talent with remote work. The majority of IT professionals and software developers, more than 70% and 80% respectively, continue to work full time—despite most having to relocate to comparatively safer areas.

Navigating Divergent Priorities

Employers’ top criteria for potential employees were ownership, agency and the capacity to fit in with company culture. But for engineering candidates and graduating STEM students, these factors ranked last when choosing employers, behind salary and benefits, work-life balance and job security. In a competitive recruiting environment and uncertain economic climate, tech startups and job candidates need to understand each other’s hiring priorities and reconcile diverging expectations.

We invite you to use the interactive tool to explore this dynamic landscape for yourself or download the full report.