Tech Salaries Stagnant Despite Low Unemployment: Survey

https://insights.dice.com/2019/01/29/tech-salaries-stagnant-low-unemployment-dice-salary-survey/?CMPID=EM_RE_UP_JS_AD_DA_CP_A_&utm_source=Responsys&utm_medium=Email&utm_content=&utm_campaign=Advisory_DiceAdvisor_A

by rexarex • 7 years ago

70 64 7 years ago

insights.dice.com

iaw• 7 years ago

A trend I've seen is using salary consultation services that peg the company compensation to rest of market. When enough of an industry does this it has the same result as price fixing but without collusion.

jgalt212• 7 years ago

I don't buy it. FAANG pays X, so other companies know they need to pay 1.3X to hire FAANG level engineers. So the info sharing may help FAANG collude, but it won't suppress wages for those who can be poached from FAANG. That's assuming there aren't any behind the scenes no-poaching agreements.

https://www.cnet.com/news/apple-google-others-settle-anti-po...

xxxanony• 7 years ago

I'm not so sure... plenty of software engineers will gladly accept less than X to NOT work at a FAANG company.

kamarg2• 7 years ago

Are there many companies that can pay 1.3x of FAANG compensation? One of the big reasons people go work at the big 5 is the pay.

trhway• 7 years ago

I don't buy it. FAANG pays X, so other companies know they need to pay 1.3X to hire FAANG level engineers.

no. The rest knows that they can pay 0.3-0.5X to hire the rest of the engineers. C people hire C people and there are always more than enough C people around. Our BigCo has no talent shortage for example(we'll even be cutting 5-10% in the next few months - just fat trimming, the company has no financial issues forcing to do it), and i have hard time imagining what would a FAANG level engineer would be doing around here - try to imagine a Stanford CS MS grad with the thesis in deep learning helping a huge enterprise customer through 6 stages of grief during the escalation call :)

The overall stagnation is only overall. Inside the tech salaries distribution there is a structural change of it becoming strongly bi-modal. So there is very high competition for talent and very high salaries (Google L5/6/7 medians being like 550/650/750 with the rest of FAANG being similar) at the high segment, and the rest just happily chugging along with 2% yearly CPI increase at best which actually means slowly sliding downhill instead of mere stagnation.

conanbatt2• 7 years ago

Thats not how it works. You cant put prices unilaterally in a market: a single company offering more would capture all talent.

SquirrelOnFire2• 7 years ago

That's not how it works. Educated, creative workers look for more than just salary. Increases in autonomy, purpose, and opportunity for mastery are often viewed as more valuable than money (once threshold levels of income have been crossed)[1]

[1] Drive by Daniel Pink

lgleason2• 7 years ago

^^^^ This. There seems to be a built in incentive for these "salary surveys" for corporate sites like Dice to do this which is why actual salaries tend to be higher. It is funny to watch companies that rely on these and low ball surveys struggle to get good people.

polskibus• 7 years ago

That's all with a fairly strong USD. It means that outsourcing buys you more developers abroad than with cheap USD.

jkingsbery• 7 years ago

The article doesn't say, but I'm curious about the effect of the changing population has on this. I don't know the exact numbers, but if tech unemployment is low and salaries have remained on average the same, that could also be due to adding a lot of entry-level engineers. If that's the case then saying that tech salaries are "stagnant" could be misleading, because individuals in the population are not generally stagnating.

_bxg14• 7 years ago

I'd bet it's just a function of what people are willing to do the job for. $93k gives you a very comfortable lifestyle, and tech workers tend to be much more motivated by the work itself than their peers. Those who really care about getting rich will go to SV and do a startup. So there's not as much pressure for increase.

Apocryphon• 7 years ago

SV/SF CoL is still horribly high, NYC/DC and SEA probably little better.

kamarg2• 7 years ago

Er...isn't the general agreement that if you want to get rich you absolutely should not go work for or found a startup but instead get a steady job at big corp and live below your means? People are always on about how shares in a startup should be counted as $0 compensation. Not to mention $93k doesn't go very far in places with large populations and high job prospects.

_bxg14• 7 years ago

1) I assume the $93k isn't in SV and Seattle

2) The general wisdom if you want to get financially well-off is what you describe. Those who'd prefer to risk it all for a shot at being filthy rich do startups.

ummonk5• 7 years ago

Founding a startup is a decent way to get rich, although a big roll of the dice. Joining one is not though.

idiot900• 7 years ago

$93k does not give a very comfortable lifestyle in SF/NYC.

pkaye3• 7 years ago

You certainly can is you bought your house 10+ years ago.

GlickWick• 7 years ago

These are averages. SF/BOS/SEA/NYC/etc all have higher salaries. It also is a bit vague as to what a "tech worker" is, and these articles tend to include all of IT in that.

brundolf• 7 years ago

Presumably that amount is for living in normal places. Even in Austin TX, which has become relatively expensive, I lived quite comfortably on an entry-level salary of $65k in 2015.

commandlinefan• 7 years ago

I wouldn't say it's _uncomfortable_, but it's liable to leave you struggling from time to time even here in north Texas.

toomuchtodo4• 7 years ago

$93k supporting a family (stay at home partner, two kids) is most definitely not comfortable, whether in the Midwest or the coasts. Insurance premiums alone would be ~$15k/year (pretax, but still). Throw in a mortgage or rent @ $1500/month, that's another $18k/year, you've already consumed a third of your wages.

jriot3• 7 years ago

Im at a $100k, my wife stays at home with our two school age kids, we live quite comfortably.

oflannabhra2• 7 years ago

Different people have different definitions of "comfortable", but it is entirely possible to live comfortably in the Midwest on a household income of ~$100k.

ummonk5• 7 years ago

15k/year after the employer contribution?

oceanplexian2• 7 years ago

I don't really agree with this premise for a few reasons. $1500 a month is insane for the midwest (Unless you're talking about a huge house on a few acres, or a luxury condo in a large midwestern city). You could spend $1000 a month on a mortgage and live comfortably in a nice 3-4 bedroom house in a good neighborhood in most parts of Iowa, for example.

Lastly, if you have a family of 4, there is a Federal Child Tax Credit of $2000 per child, your standard deduction goes up significantly if you're married and head of household and the lower tax brackets cover a larger portion of your income. So the overall tax burden is much, much less than a single guy making 100k a year.

I did a quick calculation and figured someone making 93k a year in Iowa would be taking home $1,332 a week with 4 allowances. That's 5300/mo - 1200 for insurance (Which seems nuts unless your employer doesn't have good plans), and $1000 for housing, and 1000 for food and 500 for transportation/misc bills, that leaves $1600 a month extra. I wouldn't say that's rich but it is comfortable and even enough to save a for retirement.

souprock2• 7 years ago

I'll work that out for my office, which is right by the beach in Florida. First of all, that pay would likely be for a somewhat junior position. Also, bonuses are common, but I guess I won't count that because it isn't promised.

Insurance is provided. BTW, we also add on a bit more for a 401K, in addition to whatever you might choose to contribute.

I don't know what you'd want for a home, and I don't know your credit score, but throwing some numbers into a mortgage calculator for 30-year mortgages gives me: You could pay $1250/month on a home that is 7 minutes from work, on 1.16 acres, going for $275,000. If you don't mind an older house, one on 1.3 acres (like a football field) is 11 minutes away and is selling for $320,000. That looks like $1455/month, which is almost what you propose. This might be excessive for you though; a smaller piece of land can be had for half that price unless it has a new McMansion or a waterfront.

So I think it's more realistic that housing would consume 1/6 of your wages.

Note also the lack of a state income tax. Fuel is half the price you'd pay in California.

stevev• 7 years ago

At 94K, stay at home spouse w/ kids. I live in upper midwest, avg cost of apartment renting $1200 2bd rm. Own a home, $1800/month. You are correct, @ 94K I am struggling to save.

m0zg2• 7 years ago

Job market is sort of similar to the real estate market. If you're shopping for a house (or looking for a job), it's pointless to look at the "market as a whole", because that's not the segment you're in: you're shopping for something narrow and specific.

A much better statistic would be to break things down by specialization, seniority, and whether or not a person had a stint at FAANG (which, and this will be deliberately misinterpreted, is a proxy for not completely sucking as an engineer). It's plausible that things have stagnated or gone down in the lower-skill segments with over-saturated labor supply. But anecdotally, on the higher end and in the segment where the talent is relatively scarce, I've never seen it better than it is now.

ummonk5• 7 years ago

Also should be noted that the runup in tech valuations has meant that engineers who joined a few years ago at a fang have seen their stock grants go up a lot in value. Now, to be able to hire experienced engineers from each other, companies have upped the size of their signing bonus and initial grants to match the run up in value of unvested stock.

Alex3917• 7 years ago

Job market is sort of similar to the real estate market.

It's even more straightforward than that; tech salaries, like real estate prices, are heavily influenced by interest rates.

matco11• 7 years ago

You can apply the same reasoning, perhaps in an even simpler way, to the “low unemployment” part of the statement. “unemployment” is a stat defined at general population level, reaching well beyond the engineering space. Low unemployment means it is probably harder to hire someone out there, but it does not contain any information about how is now harder/easier to hire engineers, let alone tech engineers.

m0zg2• 7 years ago

Absolutely. Talking averages is pointless on most topics where stats are presented. I always want to see both the distributions conditioned on several important variables, as well as marginalized versions thereof for each variable, but such nuance is not commonly available in public discourse. And when it is, people are shocked that it contradicts the simplistic world view they've been sold earlier.

GVIrish• 7 years ago

I'd be curious to see what job descriptions made up the survey. There's easily more than $100k difference between the something like a junior help desk analyst vs a senior sw engineer, and that's not even getting into FAANG compensation levels.

If you mix all of those roles into the same bucket for this survey, it makes the average salary number somewhat useless. Not to mention that geography plays a big role.

seem_2211• 7 years ago

In tech sales at startups there has been a significant uptick in base salaries and total compensation packages. The most lucrative companies two years ago are fighting to remain relevant (when they haven't updated their compensation packages). It's not all good as it does mean that there's much less margin than there was a few years ago, but as other commentators have pointed out, this data is less than worthless.

I have a pretty good pulse on B2B software sales comp data (because that's my job), but I know nothing about how marketers or engineers or FAANG pay. It's like trying to make a generalization about "Finance" but then putting together a compensation survey that takes in the M&A rainmakers at Goldman Sachs in with retail tellers at Bank of America and gives you an average. Pointless.

lgleason2• 7 years ago

Most of the salary surveys on sites like dice show numbers that are lower than what people who know what they are doing actually end up getting. Sites like Blind etc. tell a better story.

oflannabhra2• 7 years ago

Wow. In this thread, I am seeing a lot of people severely overestimating the percentage that FAANG employees comprise of the total market.

Just as the Bay Area and New York have real estate markets that are outliers of the rest of the country, so are the salaries outliers for the rest of our industry.

The report covers the industry as a whole, and demand for developers is growing just about everywhere. The questions the report raises can't be answered solely through the lens of Silicon Valley.

There is a lot of evidence that wages aren't rising across the entire economy, even with a tight labor market. I don't know of anyone that has proposed a solid economic theory for why that is, but it looks like our industry is only part of a larger trend.

trextrex• 7 years ago

This link has a pretty good explanation of why the supply-demand model for the job market doesn't work: https://www.bloomberg.com/opinion/articles/2018-04-05/supply...

ummonk5• 7 years ago

I wonder how much of this is because students don’t count in unemployment statistics. Most new grads from non-elite schools have trouble finding their first job, but do manage to line one up while they graduate. However, during the time they’re trying to line up a job, they’re effectively behaving as unemployed job seekers, rather desperate and willing to accept low wages for example.

dawhizkid• 7 years ago

Anyone go from engineering to sales? Everyone talks about high programmer salaries but from what I have seen enterprise sales is where the real money is.

justfor1comment• 7 years ago

The barriers to switch jobs (tech interviews) are so high that people who are willing to switch may not be able to. This reduces their negotiating power in asking for raises.

Tech Salaries Stagnant Despite Low Unemployment: Survey

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