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Tech Salaries Stagnant Despite Low Unemployment: Survey
- iaw 8y agoA 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 8y agoI 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-poaching-lawsuit-for-415-million/ https://www.cnet.com/news/apple-google-others-settle-anti-po...
- trhway 8y 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.
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- xxxanony 8y agoI'm not so sure... plenty of software engineers will gladly accept less than X to NOT work at a FAANG company.
- monsk 8y agoTrue, but another problem is that there are woefully few companies outside of FAANG that will even come close to a FAANG compensation.
- zn44 8y agonot to mention there's quite a few companies who don't want FAANG type of engineers
- esrauch 8y agoWhat is the aspect of FAANG engineers they don't want?
- kamarg 8y agoAre 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.
- codemac 8y agoJust SV unicorns usually, and even then a lot of it is speculated value. But the unicorns definitely pay if you're above a certain experience level - and if you build the correct professional network you can basically demand it.
- ummonk 8y agoDecacorns more accurately. Lots of mediocre paying startups out there with 1-2 billion valuations.
- dilyevsky 8y agoGoogle is famous for lowballing and downlevelling so at least in G case it’s not always the case.
- conanbatt 8y agoThats not how it works. You cant put prices unilaterally in a market: a single company offering more would capture all talent.
- SquirrelOnFire 8y agoThat'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
- conanbatt 8y agoThat is captured by the word 'more'
- SquirrelOnFire 8y agoBS. in a comment about pricing "more" does not include complex concepts like autonomy - it clearly only referred to money.
- lgleason 8y 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 8y agoThat's all with a fairly strong USD. It means that outsourcing buys you more developers abroad than with cheap USD.
- jkingsbery 8y agoThe 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.
- _bxg1 8y agoI'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.
- idiot900 8y ago$93k does not give a very comfortable lifestyle in SF/NYC.
- pkaye 8y agoYou certainly can is you bought your house 10+ years ago.
- TuringNYC 8y agoSo i guess 93k + a time machine would be great for most new grads.
- pkaye 8y agoI'm not stating it a solution to any problem. I'm just stating a fact that there are plenty of people who lived here a long time and bought their house cheap by current standards. I've lived in the bay area for a long time and my own unique circumstances made it difficult to build up savings to buy a house for a long time. People think everything was easier in the past but salaries were less also.
- VRay 8y agoIf that's the situation, maybe you should just quit your job, rent out your house, move way out to the middle of nowhere, and live off the rental profits
- pkaye 8y agoI'm perfectly fine where I live. I own my house and don't plan to rent it out anytime soon.
- m0zg 8y agoJob 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.
- ummonk 8y agoAlso 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 8y 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 8y agoYou 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.
- m0zg 8y agoAbsolutely. 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 8y agoI'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 8y agoIn 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.
- lgleason 8y agoMost 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.
- oflannabhra 8y agoWow. 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 8y agoThis 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-and-demand-does-a-poor-job-of-explaining-depressed-wages https://www.bloomberg.com/opinion/articles/2018-04-05/supply...
- ummonk 8y agoI 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 8y agoAnyone 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 8y agoThe 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.