44 ms·

Ask HN: How to increase SWE salaries in Europe?

• omeze 6y ago
  I might be biased by personal experience, but I think this has less to do with US regulation vs Europe and more to do with direct competition between tech firms’ equity value, notably late stage private companies and recent IPOs. A recent example is circa FB’s IPO, Google would always try to match or beat the other’s comp. Over the long term, you’re hoping that most of your wealth will have come from equity, not salary, if youre an engineer in SV. Senior engineers earn ~half their comp as equity grants even at public companies. Salary is simply a knob to adjust risk. Theres an interesting sort of recursion where companies compete with others slightly earlier and slightly later than them, where the more mature company promises less risk (in the form of cash and equity $ value as of the last round raise) compared to the less mature company. This means that e.g. Stripe must offer comparable or higher salaries than a series B or C company, and slightly “less” equity compared to the less mature companies more risky but higher potential equity. So the salary floor is driven by very early upstarts, and companies are pressured as they mature to increase that floor or employees leave to other companies with the same salary but less equity risk. So, 2 things: early companies must be able to grow (so their equity over the long term outpaces or matches larger companies) and early companies must be able to pay something close to reasonable salary (in SV this is usually ~70% salary of top of market, so 90k from a seed startup vs 130k from a FAANG). Basically, more companies need to be started and access to initial investment is a huge part of that.
• legerdemain 6y ago
  There is a reason why Poles, Bulgarians, and Ukrainians are ubiquitous on remote teams in tech: they are cheap, they are hungry for a challenge, and they get gold medals on the IOI (at least the Poles and Bulgarians do). Dramatically increasing the pay of these people would be doing them a disservice by making them less employable.
  • mrwoggle 6y ago
    They work like machines! It is hard to compete with them
  • walshemj 6y ago
    So they are not as good your saying? From my experience eastern developers seem to need a lot of hand holding their don't seem to be many technical leads / CTO who can take broad instructions and produce a good piece of work
    • legerdemain 6y ago
      How did you manage to go from "IOI gold" to "not as good"?
      • walshemj 6y ago
        Kind of obvious given this comment "doing them a disservice by making them less employable."
    • killtimeatwork 6y ago
      > From my experience eastern developers seem to need a lot of hand holding their don't seem to be many technical leads / CTO who can take broad instructions and produce a good piece of work Hmm that's interesting and there may be something to it (I'm Polish). I've seen some very competent Polish tech leads, but no one higher than that really. It may be because the local value of a developer or tech lead salary is so high in Poland (esp. if you contract for rich Western/US companies) that people don't really have the motivation to move up the ladder - they're living like kings already and build wealth that will stay in their families for generations.
• rover0 6y ago
  Adding more reasons: Europe as a single entity is problematic, there's a north-south gradient, the cold war east-west divide, and EU/non EU. * Switching jobs was less common, there used to be loyalty from both sides. * It's easy to get competent workers from outside of "western" europe with a matching culture and timezone. I've seen a switch from outsourcing to poland(former east) to the ukraine(non EU+east). This is good for the polish guys, they're almost at our level now. * Residence requirements for people outside of the European continent are low, and on base wage mostly lower than for any other sector. This makes the wages more internationally competitive from a business perspective, and hooks into "Individual contributors in Europe are not as valued as much as managerial professions" Because you can get the work from somewhere else cheaper.
• nojito 6y ago
  Create a housing shortage. SV salaries are inflated due to COL in NYC/SV
  • nly 6y ago
    It's not like housing is much cheaper in e.g. London. In London you can be on the top 2% of earners in the country and still not be able to afford somewhere decent to live
    • nly 6y ago
      Oh, and interest rates on mortgages in the UK are still like 3-4% for the longer fixes and you won't find a fixed term of more than 5 years...
      • matthewmacleod 6y ago
        No, they’re not. A 10-year fixed rate 65% LTV mortgage from Halifax is currently 2.15%
        • nly 6y ago
          65% LTV is completely unobtainable to most people, and definitely to most first-time buyers. The average house price to earnings ratio in the UK is over 8x, so your 65% loan becomes 5.2x earnings, which is actually higher than the 4.5x that mortgage lenders are allowed to lend by regulation (only 15% of mortgages can be lent above this). So let's be generous and say your 65% loan is 4.5x earnings. That means the other 35% is 2.4x earnings. 2.4x earnings is equivalent to saving something like at least 15% of your gross salary for 10 years, assuming a 7% annual investment return (which in itself is unobtainable, but lets be generous). 15% of gross salary is going to be 20-25% of take-home for most people...not exactly obtainable when you're already spending 40-50% of your take-home on rent. When you finally get the mortgage the monthly payments might be affordable, but getting there is the problem for the vast majority. So no, most people are still looking at 3-4% mortgages with the equity they have at hand.
• toper-centage 6y ago
  You see low salaries, I see more salary equality between engineers and non engineers. Most engineers don't add that much more value than other people in the company to justify earning 2x or more.
  • 908B64B197 6y ago
    > Most engineers don't add that much more value than other people in the company to justify earning 2x or more. At an engineering firm? Seriously?
  • walshemj 6y ago
    Depends I and the company secretary saved one company several million in todays terms by fixing a broken BACS feed and pissed of Jack Schofield in the process More recently I found a bug costing >£500000 for a Major UK Job listings board.
  • cmdshiftf4 6y ago
    This literally only benefits the company owners.
• LaEc 6y ago
  Lower income tax. Lower corporate tax. Eliminate onerous labour laws. Eliminate unnecessary regulation. Improve English education. Raise public sector tech salaries. Stronger accounting and capital market regulations. Stronger contract laws.
  • shrimp_emoji 6y ago
    Spread the neoliberal, inhumane meatgrinding cancer of American oligarchic capitalism to all shores! :D
    • dang 6y ago
      Please don't take HN threads further into ideological or nationalistic flamewar. Comments like this are just what we don't want here, and we've had to ask you this before. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
  • iso1631 6y ago
    > Lower income tax Why would that increase gross salaries? > Lower corporate tax Why would that increase gross salaries? Corperations pay the minimum they can for the product they get > Eliminate unnecessary regulation Well the UK has just created a ton, so that's unlikely to happen, but what specific regulation, and how does it keep wages low? > Improve English education They should try that in the States first > Raise public sector tech salaries That doesn't really mesh with lowering taxes > Stronger accounting and capital market regulations Seems the opposite to elimintating regulations > Stronger contract laws. In what specific way?
    • sguo35 6y ago
      Lower income tax allows high earning engineers to found their own companies and become angel investors. This builds the startup ecosystem and makes it more self sustaining; new startups receive angel funding from prior employees that are moderately wealthy, and when they get big they fund the next generation. A social safety net is not a substitute for this because you can’t invest government welfare into your company. As for regulation, [1] suggests EU employment regulations for performance can require documented performance improvement plans before firing an employee is permitted. This basically makes early stage startups untenable, as you can’t easily remove employees that are incompatible with the company’s goal. For example, if you suddenly pivot you can’t just let go of an entire product line’s employees in a week. A recent example of this happening that made it to the HN front page is Gumtree laying off most of their employees a few years back. The trade off is obviously employment stability for employees, but in a hot labor market like software engineering there is not much downside to decreased stability. Ultimately startups provide competition for big tech and drive up salaries, since if big tech doesn’t pay high enough people will flock to startups that will eat the big tech company’s lunch. That ecosystem doesn’t exist in Europe at least partially because of high income taxes and burdensome labor regulations. [1]: https://www.saplaw.co.uk/brexit-articles/669-dismissing-an-employee-in-france-2 https://www.saplaw.co.uk/brexit-articles/669-dismissing-an-e...
• trcollinson 6y ago
  Do you mean a particular part of Europe? I only ask because there are more factors than salary. I have friends who have moved to work in France, Norway, and Germany. They do make markedly less than I do on my US salary. However, they also get: * Substantially more actual vacation time * Substantially cheaper and yet similar health, dental, and vision coverage * Less risk/stress associated with job security * A very similar job market I don't imagine this is the same in every country in the EU, just as technical job markets are different in the US. But working in the US Tech Sector isn't the panacea of work related issues.
  • Jyaif 6y ago
    In 3 years in the US you earn significantly more than in 5 years in France, so the vacation and health coverage arguments do not hold, unless you have an expensive illness (>30k$ per year). The job security on the other hand is very real, so if you want to coast at your job, europe is the way to go.
    • ergocoder 6y ago
      There is absolutely no way to get 500k/year from being just an engineer in Europe. I recall the React creator's base salary is 100k/year in London, and he works at Facebook.
      • ingvul 6y ago
        The average salary for a Software Engineer is $107K per year in United States. The average salary for a Software Engineer is $66K per year in Germany (~61% less). Source: indeed and payscale. I always find a bit funny when US devs in HN talk about getting salaries above $200K/year... when the average US dev gets half of that. (I find it funny because everybody here thinks we are above the average dev level and can get a job at Facebook/Google/Amazon/etc... which is statistically incorrect).
        • thecleaner 6y ago
          Wrong math. 61 percent of the US average. Not 61 percent less.
• deleted 6y ago
  [deleted]
• tolbish 6y ago
  Careful what you wish for. The US has no guaranteed paternity/maternity leave, and the majority of workplaces have less than a month of vacation time. Then there is the healthcare system.
  • deleted 6y ago
    [deleted]
  • JMTQp8lwXL 6y ago
    The U.S. Wage, minus paying for your own health care, minus saving for your own (p|m)aternity leave, is still greater than the European wage, at least for the Software Engineering career track. The calculation is probably more favorable to traditional middle class jobs in Europe.
    • deleted 6y ago
      [deleted]
    • deleted 6y ago
      [deleted]
    • giantg2 6y ago
      I wonder what the pension/retirement system differences would like like too.
  • digianarchist 6y ago
    I don't think any of these reasons explain why European SWE salaries are so low and I don't think they need to be compromised in order to raise wages.
    • tolbish 6y ago
      Care to elaborate?
      • digianarchist 6y ago
        I don’t buy the idea that employing people in Europe is so expensive because of these benefit programs that wages are lowered to compensate. Some of those costs aren’t even borne by the employer.
• alkonaut 6y ago
  I got my higher education for free. I expect to save nothing for my children or their education. I expect to have to put aside very little for retirement. The thing is, I just can’t find an argument why I should be able to get very rich doing my job. It’s a comfortable job. It pays a good salary. I got here by taking no risk at all. I wouldn’t want to switch jobs just to drive up my pay even if I could. I have other things to think about. I have worked 20 years in the same job and so have my colleagues. This is a cultural difference I feel.
  • friedman23 6y ago
    I don't think you've fully thought through your position. You making less isn't some altruistic thing. You making less directly contributes to your (already likely wealthy) boss making more. It's not like you making less means the poor live better lives, it's essentially donating money to your employer.
    • seltzered_ 6y ago
      There's cultural differences here depending on where the employer is based. I believe the employee-CEO pay gap is substantially less for many European companies (excluding UK).
      • titanomachy 6y ago
        So do the shareholders make a lot more then? Or are companies just less productive?
        • alkonaut 6y ago
          It's probably true that in software, there are fewer companies that make silly revenue per employee. I work in "traditional" industry, meaning the revenue we make is for saying widgets we make in factories. Having 10% profit margins or 5% yearly growth is fantastic in our industry. In the US my feeling is that a larger fraction of developers work in the type of tech that has higher room for growth. And more importantly, the entire industry has to compete pay wise with these tech companies that can pay based on exponential growth and almost unlimmited properties (like FAANG). Since I don't have people across the street making twice my pay because they work at a FAANG, there is less of that.
• mrwoggle 6y ago
  There are a few FAANG-ish companies in my country that pay well. Besides those companies, it is really hard to get a good salary. Other companies top out at 60-80k EUR. And then you'll probably need a lot of experience. It is not hard to pass the whiteboard interviews, but if the senior devs only take home 80k, why would they give you more? I'm looking for a job change. Purely for money. Anywhere in Europe is fine actually. I mean, looking at the US, how hard can it be to earn 80k EUR with a CS degree and a few years of experience.
• elindbe3 6y ago
  Admittedly I don't know much about work relations in Europe but are SW engineers unionized there? A union could 1.)allow workers to aggressively collectively bargain for more money 2.)add additional requirements (licensure, education requirements, etc) to keep down the supply of labor. I'm not saying such a move would be good for everyone, but it could be good for those who become members of the union.
  • jonex 6y ago
    In Sweden a significant portion of tech workers are unionized. It doesn't work well for creating leverage in term of wages though. If anything, the impression I got at my last job where I was in the union was that the union negotiations mostly created an excuse for not increasing individual pay. "Sure, you perform really great and all, but if we give you more we'll have to reduce pay for someone else based on the agreed upon average increase." For high-in-demand jobs such as SWE, the leverage of "if you don't maintain competitive pay I'll probably start look around for other work" is much more effective than union negotiations when no one is paid bad enough that they'd be willing to go on strike to get better terms. Education is good and free enough that the supply of qualified labor would be hard to keep down without governmental intervention.
    • foogazi 6y ago
      >”Sure, you perform really great and all, but if we give you more we'll have to reduce pay for someone else based on the agreed upon average increase." You do give up some agency by going through intermediaries. Good thing you are not forced to stay
      • xur17 6y ago
        One of the reasons I personally don't want tech industry unions.
  • soinus 6y ago
    If anything, I've seen union doing exactly the opposite, at least in Germany for senior level jobs. Coming to work for a big company the only chance of getting a higher salary is to be above the union negotiated margin. The companies generally don't really want you to get there and it can be really tough to negotiate this. You are really well protected and basically unfirable in union but there is a top margin to your salary. If outside the margin of union salaries you're on your own with your own responsibilities. I really did not like working on a company that had a union as I've seen lots of people with zero motivation and nothing that a company could do about it.
• LatteLazy 6y ago
  You need to increase demand: * Offer tax breaks for tech startups. The UK has a whole suite of these and London is number one in EU (out of now) for tech startups * Similarly non-tax pro-entrepreneur reforms and help: bankruptcy protections (the US does this very well, the UK very badly); access to mortgages / leases and credit for the self employed; better management of taxes and benefits; reform of regulation for smaller businesses; and media campaigns to make starting (and failing at) a new company more acceptable socially. The UK does great at some of these (starting a business is easy), badly at others (bankruptcy is a nightmare here). * Legal reforms around freedom: so you can break non-competes (the UK does ok at this and the EU too I think); so it's harder to enforce IP that isn't being actively used; to prevent large established companies from bullying smaller ones (less of a problem already because the rest of the world doesn't follow the "American Rule" for court cost...) * there are a bunch of smaller initiatives that can assist too: government buy-local and buy-small policies; entrepreneur training and projects in schools and universities, requiring graduate programs to accept delayed/older entries (so you can take a year off between uni and SafeCorp without worrying you'll never get back on the ladder), encouraging contracting over employment. All of that should drive entrepreneurship. That will hopefully build an eco system (suppliers, capital providers etc.) and it can grow organically from there. I'm not sure it will ever be Silicon Valley in London or Amsterdam or Berlin. Partly there are established industries that soak up talent tech workers (finance in the UK) but also because software is a "winner take all" market most of the time. Even hardware can be that way too. And that's just not the European culture.
  • xxpor 6y ago
    Reading about how the bankruptcy system works in the UK a few years ago (when Thomas Cook collapsed) was mind blowing. How could any system where the firm has to cease operations immediately no matter the circumstance be considered a good idea?
    • iso1631 6y ago
      If you run out of money then you're screwed. What do you do if you are a person who runs out of money and can't pay debt? Surely you have your assets repossessed and some form of debt charge hanging over you for some time so you can't get into that position again (or rather that others will know not to lend you money again) Is it different in the US?
• Barrin92 6y ago
  It's not trivial to do. First you have to account for a lot of things if you want to make a fair wage comparison. Europeans generally work much less. Germans almost work 500 hours per year less than Americans. Cost of living is vastly different. I've heard from a lot of friends in the US they pay tens of thousands per year on education and childcare in expensive cities, that's not the case in Europe where most of it is free, so lower salary is a function of that. The one thing that probably has a real impact is the enormous size and and profitability and competition of large American software firms for talent. There's not many of them in Europe with the exception of SAP or something? So that's a real difference but it's not easy to recreate because the European market is not homogeneous and policy environment is much more weary of big tech. I don't actually think Europe should or can compete on wages. Europe has other things to offer. Smaller, healthier ecosystems with focus on working on tech that solves social problems, better balance of life and work, free education and high degrees of safety and equality, walkable cities, and so on. There's no need to be more market-driven.
  • Cthulhu_ 6y ago
    Another commenter mentioned the income-per-employee of SAP compared to US companies, and it was 4-8x difference. I think SAP has the problem of scaling, in that they need to hire people to grow the company, whereas the FAANGs can multiply their revenue without having to hire. Spotify is also mentioned in that same post; it has the (profit) scaling problem that the more usage it gets, the more they have to pay their artists. Income and expenses scale alongside each other.
• say_it_as_it_is 6y ago
  Americans are hired at-will, with barely any job protection, where as Europeans received far more protection and regulations governing paid time off, universal healthcare and so forth. You're not being paid as much as Americans in Europe but you're also treated far more humanely. I think the question isn't how to increase wages in Europe but how to get the rest of the world to adopt Sweden's labor laws, assuming it has the most progressive ones. I'm an American who would gladly accept Swedish rates with Swedish benefits.
  • esoterica 6y ago
    Taking a $200k pay cut to get a couple weeks of extra vacation, government healthcare (which is only a marginal upgrade if you already have high quality private insurance) and better job security seems like a raw deal to me.
    • ivan1783 6y ago
      Not having to save for your kids education will already offset that, if you look at American university prices.
      • esoterica 6y ago
        That doesn’t cost $200k for each working year of your life.
• lazyant 6y ago
  I've noticed from recruiter email that some US companies have decided to go fully remote (no doubt due to COVID-19) and have started looking for talent in Canada, offering a bit more compensation than our local one (not parity) so I expect this effect will start pushing salaries up outside the US, starting with us in Canada due to time zone/language/culture.
  • 908B64B197 6y ago
    Canada has out of control immigration quotas, that will push wages down, and quite a large brain drain to the US.
    • paledot 6y ago
      [citation needed]
      • 908B64B197 6y ago
        10x per capita for permanent residency compared to the US. And the point based system is also... interesting, as one can score very high and yet be unemployable.
• ghgdynb1 6y ago
  You say those reasons aside, but I think they’re the difference that makes the difference. No practical changes to the Euro tech job market will change the salary discount compared to the U.S. barring a dislocation in the factors you mention. It’s generally true that the US is more comfortable with variance in outcomes than the EU. This is a cultural thing which also presents legislatively.
  • kazen44 6y ago
    this cultural reason for a lot of countries is logical aswell. for instance, after world war 2, most European counties had to do heavy intervention in their economy to rebuild their country from scratch. (the dutch and French had wage freezes until the late 50's, Britain had rationing until the 50's, not to mention the insane human sacrifice during the war. Belarus lost a majority of its population during the war for instance). not to mention everything behind the iron curtain being completely mismanaged for 50 years after being the area which took the brunt of world war 2. having two oceans between your country and the rest of the world helps a ton in keeping your economy stable and growing, while Europe at that time was turning itself into literal dust twice in 30 years.
• cmdshiftf4 6y ago
  What’s the incentive for companies to pay European devs more?
  • xxpor 6y ago
    Ability to attract and retain talent better than their peers? Alternatively: What's the incentive for firms in the US to pay high wages?
    • johbjo 6y ago
      Managers in US software companies base their seniority on experience in software engineering. Up-valuing software engineers also up-values their own position. Most large employers of engineers in Europe are rather old industrial companies. Management generally do not have software engineering backgrounds.
  • chrisseaton 6y ago
    If they could compete with American companies to get better developers they could build move valuable companies.
    • matthewmacleod 6y ago
      I’m pretty certain that lack of technical talent is not one of the factors contributing to the relatively fewer numbers of large European tech companies.
• nickpp 6y ago
  Just like anything worthwhile is done: through free market competition. Build a successful startup, make some nice money and attract the best in the business to work for you by making them eye-popping offers. This will make your competitors react by raising their pay and with it the whole market. It’s how Silicon Valley reached those salaries after all...
  • cies 6y ago
    > Just like anything worthwhile is done: through free market competition. Dont know where to begin unpacking the falsehood of this. Maybe a counter question serves best: how is non-competitive behavior not worthwhile?
    • toolz 6y ago
      I can't speak for OP, but I can say that OP never said non-competitive behavior isn't worthwhile. The question being answered is how to increase salaries, not how to make something worthwhile.
    • throwaway3699 6y ago
      Note that free market competition doesn't preclude cooperation within its framework. It's a bit of a misnomer.
  • arcticbull 6y ago
    I mean, it's not a great way to raise the salaries of retail and restaurant workers. It's also a terrible way of providing healthcare. Ultimately it's more a question of supply and demand as to why US SWEs are paid so much.
    • eloff 6y ago
      This is it. It's not your other comment about equality. It's basic supply and demand.
    • nackerhewz 6y ago
      The SWEs will buy more stuff and eat out more, increasing the demand for retail and restaurant workers. It does trickle down, but due to continuous influx (because qualification requirements are low) of new potential retail and restaurant workers you don't notice on an individual level but on a globalized level it matters because those new retail/restaurant workers have improved themselves.
• jchallis 6y ago
  One option is to emigrate to the United States, driving up pressure on the engineers who remain. My near-term ancestors all left Germany due to poor wages and a tendency for Bismarck to sacrifice draft-age men in wars, and while moving to the US helped their own status it also did a bit to increase pressure at home.
  • 908B64B197 6y ago
    EU engineers should vote with their feet. That's the only way.
    • joelbluminator 6y ago
      Wont work. Big brother will import talent from Africa, Middle East, India.
      • H8crilA 6y ago
        It has been working for over a century up to today. What will change that it "wont work" any more?
    • person_of_color 6y ago
      FAANG companies are filled with British/European refugees.
    • PurpleFoxy 6y ago
      But they don’t because having an average pay in Europe is still preferable to having a high pay in America.
      • oh_sigh 6y ago
        I suspect you don't have any evidence for this claim. Looking at immigration numbers, a far higher percent of Europeans move to America than Americans move to Europe.
        • 6y ago
• username90 6y ago
  Join Google and move to Switzerland. It isn't that easy to join Google Switzerland but it pays like Silicon Valley.
  • lrossi 6y ago
    This strategy doesn’t scale.
    • username90 6y ago
      Salaries are only raised when workers are chasing the money, why else would companies raise salaries? All threads about salaries in Europe are full of people telling us how happy they are with what they got, that is the wrong attitude if you want things to change. Edit: To expand further, think like this: The easier it is for companies like Google to hire good talent in Europe the more they will hire talent in Europe and the more development they will do in Europe. They already do quite a lot of development here as is, there is no reason that couldn't be expanded.
      • lrossi 6y ago
        I agree with you, but moving to Switzerland is not a very good solution to achieve that. Salaries are high there only because the cost of living is much higher than neighboring countries. The country is very small, so demand for workers is not high. Also, Switzerland is not part of the EU, so the salary levels there have little influence on the salaries in neighboring Germany, France and especially Italy. FAANG offices in the EU pay significantly less.
  • rdevsrex 6y ago
    And to be precise, you mean Zurich, right? I haven't seen many Google jobs in other parts of the country.
• tomp 6y ago
  Make non-competes illegal (or, well, unenforceable).
  • kube-system 6y ago
    Are non-competes common in Europe?
    • tomp 6y ago
      I have one, though I work in finance (in London). I’ve heard the same for finance / trading companies elsewhere (e.g. Slovenia). Not sure about pure software companies though...
    • Xylakant 6y ago
      It’s definitely possible to have non-competes in some cases in germany, but they come with a catch: the employer needs to pay the employee the (usually full) salary for the entire period, potentially reduced by any income from a job. And it needs to be negotiated in the work contract and cannot be unilaterally enforced after the fact. So generally speaking, they’re only worthwhile for people that have important company secrets.
    • toyg 6y ago
      Sadly in UK they are, even though in practice they can be challenged (since the right to work trumps it, basically). To be honest I don’t think they are much of a factor when it comes to compensation though. It’s largely a cultural issue: SV was largely built by engineers for engineers, so there is an awareness of what a happy engineer can deliver to a company. In Europe anybody technical is just that, a technical resource, a cog. That also links into the degree of freedom they are (not) granted, freedom to choose their tools etc.
    • 2rsf 6y ago
      Not in Sweden
• TheAnswerMan 6y ago
  You have to destroy your social safety net or escape it.
• jrvarela56 6y ago
  Remote work will take care of this. Developers will work for companies in USA that can pay more. Companies want developers and will pay market rates. We will converge towards a global rate for devs.
  • SiempreViernes 6y ago
    Маybe, but currently the world is going towards decoupling, not internationalisation.
    • jrvarela56 6y ago
      I don't think this applies to remote positions. Local labor market restrictions + taxes create ample room for a win-win between remote employee and employer. So there's a strong incentive to hire from abroad.
  • TheAnswerMan 6y ago
    > Remote work will take care of this. If by "take care of" you mean put downward pressure on European wages, then sure. Unrestricted remote competition would benefit 3rd world developers and the 1st world employers. But not the 1st world employee.
    • jrvarela56 6y ago
      My assumption was that European devs are underpaid wrt USA and that their wages will go up as shortage of devs in USA forces them to pay up for European devs.
      • TheAnswerMan 6y ago
        Your assumption forgot that remote applies to the entire world, not just the Europe. Have fun competing with team from <insert South American Country> who mirrors time zones more closely with the US.
• jt2190 6y ago
  Your second point is the main reason. A company that can generate more revenue by hiring more devs is incentivized to hire more devs. [1] As an investor this is a no-brainer. There are plenty of US companies that hire devs that do not have these economics, but they’re forced to pay more or loose the few developers they have. What reduces the upside of European companies hiring? [1] Calculate the revenue per employee of Facebook, Apple, Google etc to see how much money is involved.
• tsycho 6y ago
  Asking: Do European tech companies just offer lower salary, or do they also offer less equity? In the US, most people I know made a significant chunk of their wealth from their equity growth, especially as equity grants grow much more than salary, as people get promoted.
  • deleted 6y ago
    [deleted]
  • terwey 6y ago
    Equity is not really as thing, most companies you end up working for are not publicly traded and if they are of that size they're generally not offering equity to hire you. We tend to say: stock doesn't pay the rent.
  • distances 6y ago
    I can confirm the other commenter: in general European companies don't offer equity, at all. There are exceptions especially in managerial positions but that's the general rule. I know exactly one developer who has part of their compensation in equity.
• shekispeaks 6y ago
  In Silicon valley, its usually a race of execution. Hire an engineer today at any price rather than wait for tomorrow. This is due to sheer competition breathing down your neck. I do not see this in Europe and hence they do not have the urgency and low wages.
  • ketamine__ 6y ago
    I'm guessing SWE's in more chill markets make more as well.
• anonuser123456 6y ago
  Be more productive. Companies can only pay more when they make more. SV is awash in capital because it grows earnings in the 20+% YoY basis. Euro zone companies don’t seem to do this. My understanding is that EU regulates high growth away too early in corporate life cycle, so anyone wanting to grow fast goes somewhere else.
  • ff232fffffrt 6y ago
    You just can create a competitive business in Europe. Everything is overregulated and you will spend 70% of your time to comply with laws, instead of developing your product. Even in China companies have more freedom that in Europe. All that will end like Soviet Union.
• joelbluminator 6y ago
  Stop skilled visas and free movement of people within the EU.
  • ff232fffffrt 6y ago
    Skilled people usually pass by the Europe, because they can make much more money somewhere else. It's poorly educated people who move to Europe to get free social services.
    • joelbluminator 6y ago
      Thats nonsense, tech companies in Germany,Netherlands etc are filled with educated developers from Russia, Ukraine, India and so on. Not everyone wants to or can go to the U.S. btw Pfizer vaccine was developed in Germany by a Turkish immigrant.
• slumdev 6y ago
  Your university education and healthcare are free, your public transportation is ubiquitous and functional, and your retirement is a bit more secure than ours. The method of financing these things (VAT) affects your employer's top line. Where in the United States we get to see the money first and then have to dispense it, in Europe, it's gone before it even shows up as revenue to your employer. To-may-to, to-mah-to. I doubt it's strictly SWEs who are affected by this phenomenon, either. Most of your professionals probably appear to make less than their U.S. counterparts.
• beaunative 6y ago
  Simply put, internet giants taking a majority of their profit from the global market, and since a large share of those cooperations are headquartered in the valley, where they would have most of their staff, reasonably, valley pays are much higher.
• peteretep 6y ago
  Oh that’s easy, make those darned socialists pay for their education and healthcare out of pocket, remove public transport infrastructure, and have the police randomly shoot a good percentage of them annually
• Zaheer 6y ago
  I'm obviously biased but... Transparency. I've heard from compensation and hiring managers directly that Levels.fyi has had an impact on compensation. We believe we're making a significant dent in the market.
• topkai22 6y ago
  I unfortunately don’t have much perspective on software development on Europe, but one of the differentiators I’ve observed in the US between high salary SWE jobs/regions and lower SWE jobs/regions is that engineered in the higher categories are considered a core part of the business and are deeply integrated across the business. The engineers sit closer to and interact more with the “money people” than in companies where there might be a layer of analysts or business program managers, etc... As a result, engineering and computing at permeated throughout the business. This often makes these companies more agile (the cycle times for requirements and feedback are shorter) and seems to make the business more willing to pay for engineering talent generally (as the decision makers see the value or are former engineers themselves.) This is easier in some industries than others - consumer internet and commercial software companies will tend to organize more like this then health care, for example. So I guess my answer would be ensure your software engineers aren't just doing software, but helping define the businesses
  • mlinksva 6y ago
    That answer aligns with https://blog.pragmaticengineer.com/what-silicon-valley-gets-right-on-software-engineers/ https://blog.pragmaticengineer.com/what-silicon-valley-gets-... heavily discussed a few days ago https://news.ycombinator.com/item?id=25717390 https://news.ycombinator.com/item?id=25717390
  • LogicWolfe 6y ago
    This explanation does a great job of describing what I've seen in Australia. I moved here from San Francisco after working at several startups including a long stint at Airbnb. I've been consistently stunned by how peripheral software is to businesses here. In the bay area organizations are structured around how they build technology and see it as a key point of competition. Here it's viewed as a cost center and usually outsourced to consulting firms who integrate some semi-generalized third party solution. This isn't universal, there are startups here that "get it". But it's ubiquitous in large companies that have money, and that drives the salary market. It seems inevitable that this will change in time either by the old guard catching up or new companies displacing them. I think one of the key driving forces behind this could be the return home of people with experience from SV style companies. As they join companies or start their own they are likely to advocate for approaches that more strongly couple the organization to its technology. In the Canadian startup circles I once inhabited this was a broadly accepted idea. Seeing people move to the US for high paying tech jobs was generally celebrated, because there was an expectation that many of them would eventually return and be a boost to the overall ecosystem.
• jariel 6y ago
  ? Companies have to make more money. Salaries will invariably follow because the pressures for talent become very obvious.
• onethought 6y ago
  Is it just the VC thing? There is heaps more money sloshing around in Silicon Valley than anywhere in Europe. Then market dynamics have come in and you fund 1 company with a gazillion dollars it pays Market + 30% then another company gets a gazillion and it pays Market + 30% + 30% (of course it isn't all cash it's tied up in options, and bonuses etc). So when someone at google say earns 350k/annum* it's not as insane as that sounds to a european because they actually mean something like: 180k (money) / 100k (shares) / 70k bonus (I mean it's still insane). So having companies and a healthy stock market, and bonuses are usually tied to performance of individual and/or company so It's possible in a bad year they dont get their bonus and their shares reduce heavily in value. * No idea if this is even ballpark, but just random names and numbers for example sake
• musicale 6y ago
  Eliminate affordable housing.
• kepler1 6y ago
  How to increase salaries? Hah, fundamentally change the supply and demand of labor. Not gonna get around that basic dynamic. Too many unemployed / underemployed educated people willing to take the job for less. Too few companies generating enough profit and growth to employ such numbers of people at good salaries. All you have to do is change even 1 of those 2 things, and get out of the curse of the middle aged advanced economy.
• ff232fffffrt 6y ago
  Western Europe is the worst place to be a software engineer. Your salaries will only be like 20% above average salary in the country. However, unlike other jobs, you spend tons of time to learn new technologies, visit a university and all that for absolutely nothing. Decline of Europe is inevitable. In Germany, a tiler with almost no education will make more money than a software engineer.
  • Hamuko 6y ago
    >However, unlike other jobs, you spend tons of time to learn new technologies, visit a university and all that for absolutely nothing. I mean, I have a ton of perks, my job isn't that stressful and I don't even have to leave my home. I feel like as a software engineer, I'm pretty well off in general.
• argonaut 6y ago
  People tend to forget that Silicon Valley tech firms used to collude to keep wages down by agreeing not to try to poach employees: https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L.... Of course, SV engineers were already paid well at the time, but nothing like it is now. Facebook played a big role in messing up the scheme by refusing to collude and aggressively going after Google's employees (https://techcrunch.com/2014/03/24/sheryl-sandberg-facebook-refused-no-poaching-agreement-with-google/ https://techcrunch.com/2014/03/24/sheryl-sandberg-facebook-r...). They started doing this in 2008, years before any antitrust action from the government. Basically, Europe needs a rocketship tech company, flush with cash and trying to hire away everyone's engineers.
• techsin101 6y ago
  make more laws that make it expensive to run a company so never get big companies which in turn in results in no big community/supply and lack of entire eco-system.
• k__ 6y ago
  I solved the problem by being self-employed. No I can simply "export" my services in better paying countries.
• nackerhewz 6y ago
  One way things might become more competitive is when more people become freelancers. The freelance market is more volatile than the rigidly regulated traditional labor markets allowing for larger pay increases during good times (and also decreases during bad times), in general, it approaches a more realistic compensation of real added value. Personally I've greatly benefited from becoming a freelancer in Europe and have never been one day unemployed since I started over 7 years ago (4 different customers in total). The significantly higher income (almost 3 times my old, already decently above average, _net_ income) royally compensates the lack of unemployment benefits or reduced pensions. I feel that if more devs would become freelancers it would create real upward pressure towards compensation because compensation isn't entrenched in company policies and regulations. One downside is the proliferation of those in-between rent-seeking businesses, they're probably needed to get started initially but they take huge cuts and have a lot of absurd contract requirements so it's wise to develop an active strategy to find jobs without them.
  • dom96 6y ago
    Do you or somebody else in this thread have some tips for those of us who never freelanced but would be interested in giving it a shot? What’s the best way to get started?
    • nackerhewz 6y ago
      Start by defining your rate. Find out how much you cost to your current employer (including any additional costs and taxes your employment incurs which you never get to see), add at least 10% for shifting risk towards yourself (e.g. when you get ill the employer doesn't need to pay, cheap to fire you, etc.). Try to read up on some taxation basics and try to understand what your net income would be. Don't worry about not being good enough for freelancing, there's a market for juniors as well, it's all reflected in the rate. Start looking for contracts: e.g. just search for "reactjs contract london". You'll find some stuff, but keep in mind most contracts never even get published as the recruiters also have people on call. See how the rates align with what you have in mind, note which skills you know are in high demand, make a list of companies that are involved, contact their recruiters through linkedin by sending your CV and rate, say you're a starting contractor so you need a bit of time to set things up. They will understand, everybody has to start. Things move pretty quickly in that world, once you have a contract, contact an accountant and set up your business and off you go. You might want to be a bit more flexible (e.g. in terms of location) in the beginning just so you can get started. Once you're up and running, things move by themselves. Keep in mind you'll probably be poor during the first year because you have to upfront taxes and things like that. Don't let them push your rate down too much, rates are negotiable but keep in mind the customer will probably be paying an already agreed upon rate and you're just giving the recruiters more rent for doing nothing. If you become a tax hacker you can _really_ optimize your income, don't expect accountants to do an exceptional job for you. Tax systems aren't that different from a quirky legacy code base you can hack around in. Talking to people who are also interested in that might help as well, some people are real tax nerds.
• paxys 6y ago
  Competition. The only way a company will pay you more is if you threaten to go work for the one across the street. European labor laws actually work against the interest of employees in this case, since everyone there has longer term contracts, long notice periods and strict non-compete agreements. I also don't agree with your second point. Salaries of software engineers in the US aren't "skewed" or "inflated". If anything they are underpaid. Up until recently there was a lot of illegal anti-poaching collusion happening among the big tech companies which kept salaries low.
  • deleted 6y ago
    [deleted]
  • distances 6y ago
    I don't know anyone with a non-compete in Europe. I'm sure some exist, but they are exceedingly rare and expensive for the employer as they'll of course have to pay compensation for the non-compete period.
• suscitate 6y ago
  While I think that lower salaries are a result of multiple factors, one interesting data point is that governments actively disincentivize high salaries for workers through taxation, and low salary requirements for visas. For example, the "high" salary tax income bracket starts at £50k in the UK [1] and at €54k in Germany [2]. More or less, these rates are similar across western Europe (except for Switzerland). In the US, tax brackets are far more permissive [3]. Also, in the UK a £25k salary is fair enough to guarantee a visa [3], or €40k [4] in the Netherlands, hinting that these governments think that such a salary is high enough. Most policies enacted by governments, I think more through ignorance rather than malice, assume that workers making ~€50k have enough and shouldn't need to get increased. While other factors (lack of big companies & lack of VC investment) probably have a higher impact on the low wages, I think that government policies also have an affect on it. [1] https://www.gov.uk/income-tax-rates https://www.gov.uk/income-tax-rates [2] https://www.academics.com/guide/taxes-in-germany https://www.academics.com/guide/taxes-in-germany [3] https://www.bbc.com/news/uk-politics-51430811 https://www.bbc.com/news/uk-politics-51430811 [4] https://www.iamexpat.nl/career/employment-news/2019-income-requirements-residence-highly-skilled-migrant-netherlands https://www.iamexpat.nl/career/employment-news/2019-income-r...
  • deleted 6y ago
    [deleted]
  • physicsguy 6y ago
    Yeah, there's also serious disadvantages to taking > £100k salary in the UK because your marginal tax rate hits 60% as the personal allowance is withdrawn.
    • jpat 6y ago
      True, but it does dip back down to the marginal rate of 40% at £120k. https://www.contractorcalculator.co.uk/marginal_tax_rates_explained.aspx https://www.contractorcalculator.co.uk/marginal_tax_rates_ex... shows this with a clear graph.
• 6gvONxR4sf7o 6y ago
  Do engineers in Europe get as much of their comp in stock as the do in Silicon Valley? My hypothesis on why salaries have gone up so high here is if you want to hire folks away from successful companies, that success means their stock grant is likely worth loads more than it was when they signed on, which you now have to match to compete. If hypothetically every engineer at Apple hired in 2017 got $100k/yr (say $70k cash and $30k RSUs) but because the stock has 4x’d in that time, now they’re making $200k ($70k cash, $130k RSUs). To hire them away now you have to offer $200k as a starting package. And that’s for every single Apple employee with significant stock comp. There’s a critical mass of successful companies, so for google to hire from Airbnb, they have to pay that skyrocketing-comp premium. Airbnb has to do the same to hire from Uber. Uber has to do the same to hire from Facebook, and so on. Stock based comp in an on-average-growing competitive environment means market comp goes up too.
  • MuffinFlavored 6y ago
    > If hypothetically every engineer at Apple hired in 2017 got $100k/yr https://www.levels.fyi/?compare=Apple&track=Software%20Engineer https://www.levels.fyi/?compare=Apple&track=Software%20Engin... ICT2: $165k ICT3: $214k ICT4: $315k ICT5: $440k ICT6: $681k Point: $100k/yr total comp is pretty low for Apple's standards.
    • 6gvONxR4sf7o 6y ago
      Yup, and that was on purpose. If salaries were low (like in OP's area), then you'd see this rapid upward pressure, presumably contributing to a change towards the higher salaries you mention. The more relevant bit is probably whether I was way off on the percent split between cash and RSUs.
    • ff232fffffrt 6y ago
      I am a software developer for 15 years and I don't know a single developer who make more than 100K$ a year in Germany (I only talk about regular employment and not about freelancers, because freelancers can work overtime and get bills from other countries including USA).
• dzonga 6y ago
  the problem here you're only looking at one measurement. but life is not measured using one number. honestly, some things can't be measured using numbers. and to those saying competition raises salary, I would say they're roughly right - but you're falling for the narrative fallacy. the reason, salaries are high here (US) has mostly to do with inequality. remember the average ceo has 2100x wage than the average employee. and likewise, that also pushes the wage envelope for people in the profit center. but in tech not everything is code. support people etc are massively underpaid compared to the value they produce. also while scrum masters are massively overpaid. so yeah you answer is more cultural!! not competition or market factors. but cultural. in america culture is individualistic, case in point there's huge wage discrepancy between people working the same role | level e.g one Software Engineer could make 20k more or 30k because of negotiation skills. and I bet quality of life of an average engineer in low paid Europe is way better than your run off the mill engineer here in the US. Healthcare is atrocious! let's see what your high salary will do when you get a surprise medical bill. Last thing SV salaries are not representative of average american tech salaries. most people here seem to forget that.
• kodah 6y ago
  Europeaners seem to think getting by is just fine. They're happy that they're hyper educated, that their kids are going to be hyper educated, that their healthcare is paid for, and they get lots of vacation. Because you can't save, you are entirely dependent, in a broader sense, on the government's stability (I am not using this sentiment in a pejorative sense like some might.) Americans want their fair share of the pie, which will always lead to certain people making more and others making less. Compensation is more than just money to us. It's vacation, stock, better healthcare, expanded education resources and benefits, buying programs, etc... This can be both good and bad. I suspect you can find an endless list of rosy and dark examples to draw from. Most Americans would like to think of themselves as quite independent from the government, whether they want to admit it or not. The value in risk and reward versus security and stability is just different. It's okay that they're different too. Personally, I believe letting people leave the US without monetary penalties so they can pursue cultures that more match their own values is the solution. I once thought that having a system setup so that people could switch places between countries might be beneficial, one that augments the current immigration system.
  • benrbray 6y ago
    > Compensation is more than just money to us. It's vacation, stock, better healthcare, expanded education resources and benefits, buying programs, etc... This can be both good and bad. I don't think this is the right take at all. They way I see it, Americans want to get rich so they have access to the same quality of education / healthcare and leisure time / stability that the average (western) European has by default. Americans fight for scraps. For instance, look at the list of minimum annual leave by country [1], or countries by infant and under five mortality rate [2], or education rankings [3], or countries by traffic-related death rate [4]. [1]: https://en.wikipedia.org/wiki/List_of_minimum_annual_leave_by_country https://en.wikipedia.org/wiki/List_of_minimum_annual_leave_b... [2]: https://en.wikipedia.org/wiki/List_of_countries_by_infant_and_under-five_mortality_rates https://en.wikipedia.org/wiki/List_of_countries_by_infant_an... [3]: https://en.wikipedia.org/wiki/Programme_for_International_Student_Assessment https://en.wikipedia.org/wiki/Programme_for_International_St... [4]: https://en.wikipedia.org/wiki/List_of_countries_by_traffic-related_death_rate https://en.wikipedia.org/wiki/List_of_countries_by_traffic-r...
• bourgeoisbandit 6y ago
  You should look at all salaries. Broadly US salaries are much higher across the board - whether in IT, finance, engineering, industry etc. So the question should be is how to raise salaries in Europe. Broadly, in economics salaries are tied to productivity. This is best captured by total factor productivity. So you would need to make economies more productive across the board. You can also generally predict the highest salaries with this. What is the most productive economy in Europe? Switzerland. Where are the highest salaries? Also Switzerland.
• throwaway7281 6y ago
  Speaking of low salaries, I saw a $30K/year job ad in a western EU country for a research engineer who will need to build a secure and scalable infrastructure - and I laughed hard. It wasn't even scam, quite to opposite.
• ChuckMcM 6y ago
  Warning, this post is a bit cynical. Okay, it is a LOT cynical. Sorry. I suppose this is obvious but the traditional way of increasing prices is to lower the supply. If you want SWE's to get more money, first pass a rule that a SWE has to have some EU certification, and make the certification something reasonably expensive and not easy to get, say a certificate than can only be granted by accredited authorities after some number of years of study/testing/work. Back in the day that was the role of guilds. They trained and tested individuals and at some point granted and individual "master" status. Consumers paid a premium for goods and services provided by a "master <xxx>." These days, 6 weeks of "coding boot camp" or maybe spending your days hanging out on mailing lists and watching youtube videos can give you the illusion of being a "SWE." I say it is an "illusion" because while a person doing this can write code it doesn't really mean they can write code that will be durable. Much like someone who considers themself to be an automotive engineer because they grew up doing their own car maintenance. That said, there are a LOT of programming jobs for which someone who learned coding casually is perfectly appropriate. Just as there are jobs where such people would be completely inappropriate. Unfortunately we call both sets of people "SWEs" when the job requirements are quite different. An interesting exercise would be to survey jobs and salaries for software engineers an see if you could correlate salary with job responsibility. For example, does a web site "front end" engineer make more or less than a "operations/infrastructure" engineer? Does an engineer writing embedded software for modem chips in phones make more or less than an engineer writing embedded software for a toy. Do engineers writing software for vehicle control systems make more or less than software engineers writing drivers for USB peripherals? My point here is that because software is eating the world "SWE" has grown as a category to span jobs that are trivial and those that require years of study and experience to do. I would not be surprised at all if the "simple" jobs were much more prevalent than the "hard" jobs and so your dataset's salary numbers would be more interesting to look at as percentiles rather than as an overall average.
  • rednum 6y ago
    > I suppose this is obvious but the traditional way of increasing prices is to lower the supply. I've been thinking about this recently and it feels like the current culture in software engineering is to increase the supply. I see people who code and offer free coding lessons to their friends. Pre-covid there has been multiple meetups where I live in themed like "programming for no programmers" or "build your first app". At the same time when I look at other high impact jobs, like lawyers or doctors, they seem to be keen on building moats around their profession. There are no "six week law bootcamps" that would give you useful skills or anything like that. I'm getting a feeling that engineers are unwittingly cutting the branch they sit on, but they will only realize this years from now when it's too late.
• ahupp 6y ago
  Major US tech companies earn a profit-per-employee of $200-400k[0]. That's across every employee, so depending on how you attribute value the profit-per-SWE is much higher. That gives a lot of headroom to drive up salaries when competing for hires, and in part sets the market price. I suspect that low European software salaries are just a function of low profitability of European software companies. e.g, spotify is (at best) around $44k per employee, SAP is $41k. [0] https://fortune.com/2020/08/24/apple-microsoft-facebook-amazon-alphabet-profit-per-employee/ https://fortune.com/2020/08/24/apple-microsoft-facebook-amaz...
  • softwaredoug 6y ago
    My sense is there's a larger US market than a pan-Europe market. If I go from German to France to Spain, I'm almost certainly not going to see the same grocery store chains. In the US, there are regional chains, but also a high proportion of homogeneity. In Europe you have strong national and cultural differences that lead to economies more isolated from the whole. In the US, there's regional differences, but I can order at a Starbucks pretty easily in all 50 states without breaking a sweat. Maybe why US brands tend to get big in the US and then export overseas? US has a homogenous and large market, which brands can make a lot of money in and develop a solid profitable base. That's probably very hard to do in Europe.
    • fy20 6y ago
      > I'm almost certainly not going to see the same grocery store chains That's not really true. It's fair to say that a lot of supermarket chains have operations only in a single country, but there are quite a few multi-country brands as well which aren't uncommon. A few examples: Carrefour, Auchen, Lidl, Audi, Tesco, (Euro/Inter)Spar, Iceland, Rewe - and that doesn't include subsidiaries of the same company (e.g. ICA/Rimi).
      • Uberphallus 6y ago
        > It's fair to say that a lot of supermarket chains have operations only in a single country, but there are quite a few multi-country brands as well which aren't uncommon. Actually it's fair to say most of the business is done by local chains, and Europe-wide operations are rather uncommon. From your mentions, I'd only consider to be "Europe-wide" Carrefour and Spar. Carrefour is everywhere (though their market strategy changes a lot from country to country) and Spar's operations are kinda spotty but also kinda everywhere. Auchan is everywhere, but in heavy decline because they're basically the Walmart (supercenter) of Europe and people don't like to drive to a hypermarket that much anymore. Almost their only profitable branch at the moment is their Chinese one. Lidl and Aldi's presence is very spotty outside of Germany. Many countries copied their hard discount model so they have to fight with local companies that have a cultural edge (Lidl and Aldi tend to have tons of German products no matter the host country). Tesco is a leader in the UK, then kinda common in Central-Eastern Europe, but then almost universally unknown in Germany-Austria-Italy and westward. There are more Tesco in Thailand than in the whole of Continental Europe, to put it in perspective. Rewe is just in Germany, Austria and Eastern Europe (under different names and with wildly different marketing). Iceland I never heard about, but it's overwhelmingly a UK operation from a quick search. From your mentions I'd take the wild guess that you live (or have lived) a significant amount of time in the UK ;)
• esoterica 6y ago
  Costs don't scale linearly with size when you're a tech company that doesn't make physical objects, so large tech companies are insanely profitable because their revenue goes up a lot faster than their costs as their grow. Even small companies can raise a ton of funding if investors think they have the potential to become very big. Some of this money trickles down to the engineers. It's a lot easier for US companies to become large because the domestic market is huge and there is a common language and regulatory framework. The EU does have a common market but there are still more language/regulatory barriers to expansion than in the US. The EU is also much poorer than the US. France has a lower GDP per capita than Alabama, and they are one of the wealthier EU states. This means it's harder to make money selling to European consumers.
• kotxig 6y ago
  1. The culture around equity should be changed. There are too many companies where employees are only offered equity if they ask for it, and people don't understand it. We can educate the SWE community about matters of financial literacy and normalise equity for all full time employees. I personally will not accept a job at any company without equity. 2. Focusing on salary. We need a european alternative to glassdoor and it needs to become popular. People need to know what they are worth. We are quite shy when it comes to discussing salary. TC info is more readily accessible in the US. 3. Europe needs to grow tech giants that demand top tier talent. That's the main problem with Europe, there isn't a huge amount of ambition to home grow 100bn+ companies that attract the best talent globally. Europe is at a disadvantage because it takes fewer risks and it's also more likely to sell out before reaching tech giant status. We are all using Google, Facebook (or some product of) and Amazon (in countries where amazon can effectively avoid taxes). And the UK sold off ARM, though there is ongoing discussion about that. If you look at industries that are world leading (i.e banking in London for example), you'll find opportunities to double or triple your salary. Turns out that enough of us are turned off by the idea of working in the banking sector that it doesn't appear to translate into pressure for talent. We are also very well educated so it's not as hard to find people
• blunte 6y ago
  I too lament the comparatively low tech salaries in Europe. But I suspect the comparatively higher quality of living keeps us happy enough that we won't move (back, in my case) to the US for just more income. That said, this new +remote world is providing new salary competition from US companies who do pay more but don't require moving to SF for example. Even so, the work-life balance here is much better than in the US, and I suspect part of that also has to do with salary. If the salary is not super high, the workers feel more entitled to take their actual vacation days. In the US, not only are there fewer paid vacation days, but many employees don't use them all. Many years of my life I took no more than one week; when you're gone, stuff happens, landscapes shift, job security weakens, etc. In Europe however, your job is more likely to be as solid when you return from holiday as it was when you left for holiday. I am debating right now whether to stay with my medium pay happy relatively easy company (with very good job security) for more money and less of the other things. We shall see. What does bother me a bit is seeing managers who frankly use less of their brains getting paid as much or more. I don't bemoan doctors earning more than me because I recognize they have worked harder, studied more, and have more real daily risk in their work than I do. But likewise, many managerial positions can be trained in a matter of weeks, but the work I do takes years to learn and perfect. But c'est la vie.
  • westoque 6y ago
    > What does bother me a bit is seeing managers who frankly use less of their brains getting paid as much or more. The statement "use less of their brains" does not necessarily do managers justice. Managers are good at (guess what) managing people, and that takes relationship skills that some people might not have or not good at. Having being both a software engineer and a manager, I would say it takes some special skill to do either work, who gets paid more is up for debate but not necessarily that an engineer should be paid more because they use their "brains" more. Another example is a CEO who is non-technical. What skills do they have that make them have higher salaries or even bonuses? Guess what, they can make deals happen. They can secure a funding round, they can close an enterprise deal and it takes some special skills to do that as well.
    • blunte 6y ago
• pashamur 6y ago
  Other reasons for the U.S. salaries not mentioned yet: 0) Banning of non-competes in Silicon Valley (!!) and ease of incorporation / listing on markets back in the 90's and before 1) Foreign investment in the U.S. (Saudi, Chinese, Russian money due to favorable treatment, anonymity (!)) and presence of U.S. dollar worldwide as a reserve currency - lots of that money ended up in Silicon Valley (Softbank etc). This especially matters since a lot of the compensation is in RSUs and the U.S. stocks have benefitted from above. 2) DotCom bubble because of (1) inflated salary expectations; U.S. had a head start over other countries also because of the DotCom bubble. 3) Personal bankruptcy laws are more lax than Europe I believe (although I'm not positive), since you can discharge all personal debt in a bankruptcy, cost of risk is lower (leads to more risk taking). 4) Gap between EU/US salaries has varied depending on exchange rate. Generally the way the world economy is set up tends to strengthen the dollar (everyone needs them to transact oil and pay foreign obligations after 1971/1974). That might be changing though; with a weaker dollar salary gap will naturally shrink. 5) As people mentioned before: vacation, school, healthcare cost differentials (though my hunch is that this is a small effect if any) 6) U.S. is a unified market of ~300 million people, most speaking English. EU is many smaller distinct markets because of language & cultural reasons (more-so than U.S. states), so more effort required for growth. Probably some other reasons that slipped my mind at the moment.
  • willeh 6y ago
    3) Is largely not true, the EU is largely heterogeneous when it comes to personal bankruptcy laws. The fact that unsecured consumer loans are as cheap as secured consumer loans (e.g. car loans), in many EU countries, shows that it is very to get rid of debt permanently. In the country I know best a personal bankruptcy means that you have to keep paying your debts for a period of 5 years before they are forgiven. During this time you must live on $500 per month (excl. rent) the rest goes to the creditors.
    • pashamur 6y ago
      I think we're in agreement then that the U.S. is more lenient with its bankruptcy laws than Europe (on the whole, although as you pointed out it varies by country)
• draw_down 6y ago
  It’s so funny to look at this crazy economy where these companies are worth tens and even hundreds of billions and say you know, the people who helped build this really make too much money.
• gorgoiler 6y ago
  From what I know of the UK, professionals, executives, and the professional service sector are some of the best compensated roles. This may be the case for any EU economy with a burgeoning financial service sector, too. It’s a similar story in NYC though the city has more and more developer presence than 10 years ago. The more your SWE role can look like that of an auditor, accountant, management consultant, or financier, the more you will be valued. (Literally: valued.) I think the traditional solution along these lines is to become a contractor, which I don’t think is out of line with the reasons given here for why US entrepreneurialism is so well paid.
  • physicsguy 6y ago
    IR35 has definitely slowed down the IT contractor route in the UK though.
• numlock86 6y ago
  > even adjusting for lower cost of living Ha, good one! If I wasn't living in Europe probably even three concurrent full-time FAANG-like SWE jobs for the last 10 years wouldn't cover the medical expenses I have accumulated by now. Makes sense people earn more money over there. And don't even get me started on my education ...
• Laarlf 6y ago
  Let’s be honest: most jobs are underpaid in Europe. Especially the lower wage ones. Living costs are rather similar in the us and in the eu. That mostly depends on what city you live. You can’t fire people easily so there is a huge risk involved into employing people. Especially low wage jobs. High taxes for companies and high income taxes add to that and you generally have less money to spend at the end of the month.
• KorematsuFred 6y ago
  In my personal opinion: - Increase immigration. Especially from China and India. - Figure a way out to clip the wings of EU while keeping the free trade and open EU borders intact. EU's unelectable government servants are bringing immense harm.
• xyzelement 6y ago
  This is a pretty simple topic if you have a good understanding of what enabled developers to pull in large comps, and what kinds of employers pay such comps. I comment on comp threads on HN frequently and don't want to rehash my entire advice, but I can illustrate one example that can be generalized to Europe and America. Consider two hypothetical employers: Employer 1: - We want to hire only the best. - We expect people to care about the company and act like owners. - We expect people to flex in and out of different roles. - We fire underperformers. Employer 2: - We state exact technical qualifications for our roles. - We hire anyone who adequately meets the qualifications. - We don't expect people to do anything not in the job description. - We don't expect people to care about the company, it's just a job. - We never fire anyone. I hope it's clear that you can make a lot more money at #1 than #2. #1 may be a FAANG and #2 may be your state's Motor Vehicles department. I also hope it's clear that #2 sounds very mainstream European in its attitude towards work while #1 oozes American exceptionalism. In short, there's no way to raise comp without employers competing for talent but that would basically mean a complete change in employer/employee expectations. So what happens to European developers who are good/aggressive enough to work for a place like #1? They find it in London and New York. For what it's worth I am a dual EU/US citizen living in NYC, and my previous job took me a lot to our London office which was primarily staffed with European developers who left Europe exactly for the reasons I described.
  • inflagranti 6y ago
    Except salaries in London are not at all competitive with US especially if you factor in cost of living, unless you get into Fintech.
    • xyzelement 6y ago
      What do you mean "except?". That's exactly what I am referring to - high expectations employers who compete for too talent.
  • throwawayzRUU6f 6y ago
    In my experience, the share of employers with culture like 'Employer 1' who pay like 'Employer 2' is much higher than the amount of all-around 'Employer 2's.
• drzoltar 6y ago
  My understanding is that high SWE salaries require the confluence of two factors: - Competition for talent. - (Potential) Output value. I think a very rough rule is that at a FAANG-like company, a really good engineer can be delivering at least $1M in revenue/value, per year. So the only logical conclusion seems to be that there’s too much supply of qualified engineers. But then that leads me to believe that many big European tech companies are just piling up money in a vault somewhere. So my question is: who gets that vault money?
• ricc 6y ago
  This is just a PSA for those comparing financial (in)equality between Europe and the USA: income inequality is different from wealth equality. Income inequality might be lower in Europe but apparently wealth inequality is relatively high. This video gives a good explanation about their difference: https://youtu.be/Ot4qdCs54ZE https://youtu.be/Ot4qdCs54ZE
• anovikov 6y ago
  Does it become more competitive by increasing salaries? If anything, increased salaries can make outsourcing to say Ukraine more attractive.
• socialdemocrat 6y ago
  Unlikely. Education is much more expensive in the US which means having a degree will fetch a higher premium. With free education European software developers need lower salary to make getting the education worthwhile. Also European work days are much shorter. A key reason American software developers earn more is because they work a lot more hours. Last time I checked this I think I concluded I had much better hourly salary here in Europe than in the US because work weeks where crazy in the US. Not to mention much shorter vacations. I got 6 weeks full paid vacation with plenty of national holidays on top, and long paternity leave for each kid. It is unrealistic for why we should have the same pay as Americans with all the benefits we enjoy.
• throwaway4good 6y ago
  It is not only SWE jobs that have lower salaries in Europe. Broadly speaking all jobs in Europe have lower salaries; the living standard in Europe are considerably lower than in the US. The US has a GDP pr capita of 65.000 USD, whereas the number for EU is just 36.000 USD. So what can we do? My suggestion would be to do as the Americans: Expand our military ten-fold, enforce our currency as reserve currency onto the rest of the world, run massive deficits. We used to be really good at this stuff, too bad we have fallen behind.
  • Cthulhu_ 6y ago
    > the living standard in Europe are considerably lower than in the US. Citation needed, unless you're being sarcastic throughout your post (can't tell, Poe's law?). If I get the 'rona, I might die but at least I won't go bankrupt. Anyway, GDP per capita in Europe is not the best measure, because there's still a massive economic disparity within Europe; the east is still feeling the effects of the Soviet Union (and Russia's influence), the south has been struggling financially for a long while now (Greece had to be bailed out). The West and North are doing all right for themselves; Germany has a GDP per capita of $46K, 10K higher than the number you cited. Netherlands is even higher at $52K, Switzerland does $82K, Ireland, the base of operations for a lot of US companies has $89K and Luxembourg, a tiny country, trounces the whole world at $114K per capita.
    • throwaway4good 6y ago
      The first part is non-sarcastic. The GDP pr capita is really the closest to an objective measurement for living standards. And the GDP pr capita varies a lot inside the US as well.
• euengtaway50 6y ago
  In my experience, salaries start getting much more similar US ones at the staff/principal level, where salaries get into 170k ~ 200k USD/year range and total comp can go into 500~1M USD/year, at least in the main markets (UK, Germany, Sweden if you are working for Spotify).
• visarga 6y ago
  I got a simpler explanation - it's what the hiring market allows to happen. If they want to hire a SWE in Europe the market will allow them to offer a lower salary. They set the salary lower in Europe because they can.
• tobyhinloopen 6y ago
  As a contractor/freelancer one could earn €70 an hour if you’re decent. Earning over €100K a year can be achieved this way. Our rates are up to €100 an hour. The minimum rate we’re currently working at is 60
  • mclightning 6y ago
    except most of it goes to tax, when you want to transfer money from your company account to personal. In case of Sweden, minimum %54 to pay salary to yourself from your contract/freelancing company. Then you pay %25 VAT when you buy anything. As an individual, you would pay a hefty %76 marginal tax in Sweden from that base earning. That also explains why salaries are lower. Because there are hidden costs to employer.
    • ptr 6y ago
      54% is maximum and if you have your own company you can optimize that. 76% marginal tax is incorrect. 25% VAT isn’t added on everything. Freelancing in Sweden is definitely a path for becoming wealthy.
      • mclightning 6y ago
        I am including employment tax in that %54 figure, which is a cost as well. So %31 + %33, ends up being roughly %54-53 on the total. Then add VAT. I am running my own company, freelancing successfully for 2 years now. So I know these numbers from experience. Yes, you can optimize the %33 out of the %54. %33 is minimum you can get, up to 42K sek salary.
• ivan1783 6y ago
  Been working in Europe for about 10 years now with "low" wages as a Hardware Engineer (6 figures US). Sorry but America seems like a third world country compared with what we get here. I have: 35 days vacation per year, 35 hour work week, overtime pay, free education, childcare money each month, healthcare that wont bankrupt me if I lose my job, up to 3 years in parental leave (6 mo. paid), probably other things which I'm forgetting. No amount of money would make me go back to that dumpster fire that is America.
  • artemonster 6y ago
    What is a salary range for a hardware engineer? Can you shed some light, just a rough number?
    • ivan1783 6y ago
      I work at a unionised company, our union is called IG Metall. You can google the EG (entgelt) levels - engineers range from EG14-17 + an additional % each month (depending on your productivity range from 10-25% of brutto on top) + we get 14 salaries instead of 12 (roughly - union agreement). https://www.igmetall.de/download/docs_MuE_ERA_Entgelte_Juni2018_78d3e1848939887f53dcf9506907870bb637c493.pdf https://www.igmetall.de/download/docs_MuE_ERA_Entgelte_Juni2...
      • artemonster 6y ago
        I always was confused when somebody told me exactly like you did. These levels are inconsistent across different lands. How much brutto is that practically? My calculations are 75-90k, but this is a huge spread :) Anyways thanks for the insight!
  • hgretg3443 6y ago
    Only a very few developers in Europe have 35 hour week and many have to do unpaid overtime.
• rognjen 6y ago
  Isn't one of the reasons that the total cost of employing a person being significantly higher. I believe I read that in Europe it's often calculated to be about twice the person's salary. I could be mistaken but don't have the patience to look for the source at the moment.
• alacombe 6y ago
  The problem in Europe is a cultural problem, SWE are seen as factory workers, only with managerial position being seen as "successful" ones.
• thom 6y ago
  No thanks.
• ChrisRR 6y ago
  This may sound stupid speaking as a non-american engineer, but do engineers really need to earn insane amounts? We already earn well above average, don't have to pay healthcare and bay area rent. I don't see many experienced devs/engineers complaining that they're not paid double like americans, because we already earn enough to keep us in a decently above average lifestyle.
  • 2rsf 6y ago
    please define "need"...
• danielrhodes 6y ago
  Successful Silicon Valley companies have an incredible amount of revenue and profit per employee. Software engineers create a lot of the leverage that drives those numbers. As such, it does not seem like such a big deal if they are paid well (excluding labor market demands). If European software companies are seeing similar numbers, they are ripping off their engineers.
  • marcus_holmes 6y ago
    European management (and specifically accountant managers) see IT as a cost, and view revenue as being generated by sales and marketing. So if European software companies are seeing those kind of numbers, they'll be very generous to their sales and marketing folks who created those returns, and continue trying to drive down the costs of engineering.
• Kappe 6y ago
  It is changing slightly; Like right now in Munich, there is a boom: Google and SAP are building in Munich right now; Apple isincreasing its workforce, Amazon rented new bigger offices and is also already at 2,5k employees and they have a warehouse in munich as well. This will pull alot of talent away from the small companies and increase the general salary numbers.
• comick 6y ago
  Salaries in most European countries have "batteries included" by design of society. Free/cheap education from zero to graduate, free/cheap health care, free pension plan, free job security, ..., you got the point. In turn you get a beautiful, diverse, stable an extremely well connected economic/social/natural context. Some countries (I can think of Italy or the Netherlands) also offer consistent tax discounts for qualified foreigner workers/entrepreneurs moving there.
• napolux 6y ago
  > Europe has less freedom of enterprise (debatable) You would be suprised by the amount of shit you have to deal with in Italy in order to start even the smallest company.
  • comick 6y ago
    Italians tend to complain a lot about their country. And by the way, my fellow Italians and Foreign pizza-lovers. Did you know that Italy can be your tax heaven: https://www.agenziaentrate.gov.it/portale/documents/20143/233483/Tax+incentives+for+attracting+human+capital+in+Italy_Tax_incentives_for_attracting_human_capital_in_Italy.pdf/f4a91a80-8ed0-92a5-0186-424a9013bfc3 https://www.agenziaentrate.gov.it/portale/documents/20143/23...
• probinso 6y ago
  European tech companies can raise wages 4 technical workers by participating in workplace democracies
• hallqv 6y ago
  European software companies are generally creating less value compared to US ones. Market cap of big tech companies in Europe vs US is probably the best proxy for that. Makes sense that less value will trickle down to employees IMO.
• tsjq 6y ago
  Stop accepting low salaries. Do not allow the H1B-kinda cheap-labour visa for tech workers. Perhaps be extra careful with those tech-body-shop companies like IBM, Accenture, Cognizant, Wipro, HCL, TCS , Infosys, and their smaller siblings
  • benhurmarcel 6y ago
    > Stop accepting low salaries Ok, now I'm unemployed, then what? Salaries are determined by how much they'd need to pay someone else to replace you. It's an auction, not something you can set yourself by being stubborn.
• sbt 6y ago
  Salaries in the US are not that much higher than in western Europe if you exclude Big Tech. Curbing the power of Big Tech is pending a new international tax agreement (don't hold your breath).
• enriquto 6y ago
  > how can the European tech job market become more competitive? As an European (working in "tech"), first and foremost: The salaries of teachers in primary and secondary education must be at least doubled or tripled. The rest will likely trickle down from that. Software engineers already make a very good living in Europe, no need to give more money to them. If anything, useless managerial jobs must be culled.
• agilob 6y ago
  Europe doesn't have Amerikan Dream fallacy, that by moving to a country you become rich if you work hard enough, we also don't go bankrupt after breaking a leg twice in 5 years. Worst student debt you can get is in the UK, its fees are capped at £9k for each academic year. I paid off my student debt in 4 years after graduation, while financially supporting my family and saving for a house in top5 biggest city, which I bought 5.5 years after graduation. When I was made redundant I got paid 300% of my salary as a security deposit + what I earned that months and cash for unused holidays, it was close to 5 months salary in one pay. I was given fair review and 3 weeks notice before my last day, I didn't go bankrupt or homeless. In fact market is so good here that I had 2 job offers on next working day. I would not change this program for American version. I don't think my salary is that low that needs increase by a significant %. We get a lot of other benefits, higher living standard, higher job security, paid holidays (20+ days in the UK + a few bank holidays - depends on country), maternity and paternity leave (weeks or months depending on country).
  • brianmcc 6y ago
    I don't think Americans really comprehend the shock and horror that many of us feel about the state of their healthcare and the lack of vacation time, or other European norms such as maternity/paternity time or sick pay. 100% Would Not Swap. Compulsory nit-pick that not all UK nations charge tuition fees to their residents btw :-)
    • agilob 6y ago
      >Compulsory nit-pick that not all UK nations charge tuition fees to their residents btw :-) True that, Welsh government can also cover 2/3 of tuition for students from poor families.
    • 2rsf 6y ago
      And more nit picking, some countries in Europe don't charge at all for higher education
      • agilob 6y ago
• daleharvey 6y ago
  Why? I earn ~8x the salary my Mum ever earned, I earn more than anyone I know that I went to school with. I can support myself and my family. I started paying attention to my spending last year and realise around half of it was on stuff that I not only didnt need, but felt better without (tbh it was mostly takeaway food). Buying a house was hard despite my "high" salary, thats ridiculous, but I don't think the solution is to earn more. I would like to see more support for my mum who lost her job of 28 years due to COVID, I would like to see less homeless addicts on the street due to lack of support, I would like to see the people around me working as hard as they can barely able to pay rent to have more options. Seeing what tech has made of the Bay Area and asking for more of that please is misguided imo.
  • nivenkos 6y ago
    Do you own a house though? My worry is what happens when we hit ages 50-80 and the ageism in Tech hits us hard. Without a house, retirement is a pipe dream. And houses are incredibly expensive.
    • Dayshine 6y ago
      In the UK, median household income is ~£30k. Average intermediate dev salary is something like £30-45k. Mortgage cost in the most expensive non-London areas (Cambridge/Oxford/Reading/South east) is maybe £1.5k/m. If your household is one developer and one person working minimum wage (~£17k) you can comfortable afford to cover all your living costs and probably save a little.
• ronyfadel 6y ago
  Start contracting remotely for US based companies. For them, you’re cheap(-er) labor, for yourself, you’ll make more than what you used to make in Europe.
  • knuthsat 6y ago
    Not cheap if USD keeps falling compared to EUR. My income dropped about 12% since the last peak. Not that I'm complaining, but given the current USD circulation I'm thinking it might lose 50% of value in the next years.
    • ronyfadel 6y ago
      It should self regulate, once American exports become cheap again. 12% is not much, the USD has had its ups and its downs in the last 20 years (compared to the EUR).
    • kmlx 6y ago
      if you can, just invoice in EUR. that's what i did.
  • st1ck 6y ago
    Seriously. There are many US-based remote positions e.g. in Who is hiring threads, but most of them are still limited to US residents.
• jakub_g 6y ago
  As already discussed in many places, it's not possible to reach US/SV levels of salary in Europe due to differences in the model of society, taxation etc. Note however that US companies in Europe pay definitely above the market. So it's not impossible. Partially they pay more because they have more money, as they have access to VS/are listed on stock exchange (and being US-based is almost a most to have this opportunity, even if there are a few successful EU companies) IMO the diff is that in US companies, developers are more than code monkeys who execute what they are told by the PM. Developers in US companies have more impact hence higher salary: This article nicely summarizes this: https://blog.pragmaticengineer.com/what-silicon-valley-gets-right-on-software-engineers/ https://blog.pragmaticengineer.com/what-silicon-valley-gets-... Can we reproduce this in EU? EU historically has been more hierarchical when it comes to doing business. Young founders probably are less like that, but we need both different attitude to doing business ("IT brings value", not "IT is cost center") + the capital.
• dustinmoris 6y ago
  If you find that an employer tries to pay you less after moving to Europe then perhaps you can find some good negotiation points/advice in an article I wrote recently: https://dusted.codes/equal-pay-for-equal-work https://dusted.codes/equal-pay-for-equal-work
• atomashpolskiy 6y ago
  I don't think it's cheaper to live in Europe than in US. The reasons for lower salaries in my opinion are: - most developer jobs are in "real" businesses, which see IT as a cost center - compared to US, there is a vanishingly small number of technically innovative IT-first companies, so there's little competition for talented professionals - taxation is progressive and harsher in general due to being the primary source of govt income in most (all?) European countries, and increasing gross salary kinda stops making sense at some point It would be great, if these issues were addressed, and there are well-known ways to do that. But I'm not sure, if increasing salaries is a noble goal per se. While much lower than in US, they are still decent and allow one to live a comfortable life. So it's rather US being an outrageous outlier (no wonder, given that post-WWII economy is operated on their terms). The elephant in the room here (as almost everywhere in the world) is real estate. Now that one (and prevalence of mortgage) is a huge issue, and it needs to be solved at all costs, even if just for the sake of younger people. As for salaries, most developers simply don't generate that much real value (real, not money). Though they somewhat compensate for inproportionate incomes on a "higher" level of economy by over-spending the surplus above the necessary living costs, though I doubt it's by design. Overall, I'd argue, that developer (and many other occupations) salaries should be lower, so that we had fewer get-rich-quickers to work and to compete with. To be clear, I'm not saying that a dev should earn as a janitor, but rather on par with other "highly skilled" occupations.
  • 2rsf 6y ago
    > due to being the primary source of govt income in most (all?) European countries, and increasing gross salary kinda stops making sense at some point It's the same in the US > It would be great, if these issues were addressed, and there are well-known ways to do that. How ? moving to bonuses or equity is a way to defer taxes but at the end you would pay the same
    • atomashpolskiy 6y ago
      I rather meant government taking measures to stimulate IT business and venture capital, like it's done in certain Eastern European countries, for instance - mostly by tax exemptions and concessions. Regarding bonuses - here in Spain they are subject to personal income tax...so yeah, it's only good for employers.
• mikkelam 6y ago
  I'm pretty happy with what I'm getting in Denmark. I think there are many jobs more important than what I do (teachers, nurses, doctors and so on) that get way less than me. I do wish we had more startup culture and VCs in europe..
• syats 6y ago
  I would like to pose the question: why do you think these salaries have to increase? I work in Europe in a SW company, earning a well above country-average salary (around 2.5x). I live quite well. My colleagues live quite well. The company is doing quite well. Do keep in mind, that every extra euro that ends up in my savings account, is an euro that is not ending up in someone else's wallet in the country where the customers are. That is, if my company decided to raise our salaries, the customers would have to raise prices on their customers, and so on, I would have more savings, but someone else wouldn't be able to have a coffee or pay their tuition money. Why then, would we want the already well above average salaries raised?
• yc-kraln 6y ago
  The European tech job market is plenty competitive, especially if you're not looking just at money. I gladly moved to Germany from the US, taking a lower salary. I have never had less stress.
• leto_ii 6y ago
  My impression is that in Europe software development tends more often to be considered a cost center, rather than a profit center. At its core I suspect this difference comes from the fact that after WW2 Europe lost its place at the cutting edge of scientific and technological development. There are still companies and universities pushing the boundaries, just fewer than before (due to the massive brain-drain caused by the war). In turn, European companies often tend to play catch-up and they more often need competent executants rather than independent innovative thinkers. Competent executants are cheaper as they do less significant work. To this you of course have to add the social security, shorter office hours, longer holidays etc. that you get in Europe, but maybe not so much in the US.
• nilsbrev 6y ago
  In France, IT consuling and outsourcing companies are promoting wage dumping. It is not common to be an independant SWE, so consulting companies have a better supply when they hire, thus lowering the wages. Now, cuturally speaking, in Europe the cult of principles and values reigns whereas in USA it's the cult of god and money (which both work together, cf Harari's thesis). Interesting topic demanding hours of debate.
• nick45674748 6y ago
  More jobs, less candidates, higher salaries. Nothing else.
• eriktrautman 6y ago
  Plenty of good points but don’t forget that the fully loaded cost to an employer of a European employee is anywhere from 1.5-2x of what it is in the US. This alone is a major driving factor since it doesn’t matter how much of your salary you take home, it matters how much you cost the employer.
• sonthonax 6y ago
  There are a few reasons why they're lower, which other commentators have addressed, such as: different tax regimes; the welfare state; and the scale of the European market. As an aside I think it's also important to point out while there is a difference, it's not quite as large as you think when you factor in the pay of contractors being around the 500euro mark. These people give up the right to sick leave, workplace security, and supposedly career advancement. Personally, I only contract in the UK because there is little career advancement beyond being a senior engineer anyway, and the rate more than makes up for it. I'm a fairly middling engineer in London, I'm 24 and I made 120GBP last year (I just have to be content I'll never make anything more than that). You're right in attributing the difference in pay to corporate culture in the USA. In the USA where a senior engineer at a Silicon Valley style company will be seen as a key part of building the product, as if they were a product manager. At nearly all the companies I've worked for in London, engineering has played a subordinate role to product managers (who also stand the most to gain from a successful project). This subordinate nature often takes the form of siloed access to business data: where I frequently have to fight to run queries on PowerBI; or to sit in client meetings.
• wnnzl 6y ago
  I’m SWE for 10 years. I started with very low salary, and I’m about to start a new job in next month and be at the very top (7k euro net, monthly). TBH I do not need that kind of money. I do it for new challenges that come with it. I live with my partner, we both had our higher education for free, we plan no children, and we both have 80k euro in our saving accounts. Why would I need to earn more? I would prefer to pay more taxes so everything is growing more evenly - less poverty = less crimes, more happiness. Just my $0.02
  • flr03 6y ago
    Same situation as you here, 10y xp, free education, girlfriend SWE as well... We have a household income around 190k euro before tax, no kids. The only reason why we could wish to earn more is to afford a nice flat in London, it makes you wonder who can really afford it.
    • wnnzl 6y ago
      I’m from southern Poland, flats are dirty cheap here. I bought one for 35k euro 4 years ago. However, we are about to become expats in one month so I kind of think of selling now (few reasons, government taxes, house prices went up). I think that renting is way better in a long run (unless you plan to live in one city for more than 10+ years). As for buying, maybe some small house in my 50s in some less populated area like mountains or forest :)
• thorin 6y ago
  UK Here. Keep salary how it is, give me free education including University (as we had 10 years ago), give us free healthcare (which we're clinging onto), give us decent pensions (which have got a lot worse over the last couple of decades), give us affordable housing. Let us choose our work location, so we don't have to commute to London or anywhere (COVID may actually improve this!). Unfortunately UK doesn't highly value technical skills - real engineers (civil, electric, mechanical) are even worse off. To improve things many have been forced to go to Asia, US or Germany. It would be nice to earn more as a SE, but not without retaining the stuff in the first list.
• timwaagh 6y ago
  Basically companies do not recognize the value engineers bring. They are seen as costs which need to be minimised, when in reality it's their core business. Little is invested in helping engineers to get better. Agile practices are implemented poorly. People do not start tech companies. The average software company is a body shop that rents out to insurers, banks and the government, which aren't really tech. This model is only popular because it helps business dissociate itself from tech and gets around all employee protections. More lucrative models like Freelancing are sometimes legally restricted because of the same employee protections, so is not popular. Engineers wait for the hours to pass so they can go home. Code reviews are a tool for office politics. Software engineering is kind of a blue collar ish job which employers think anyone can do. There's just no cachet to being a programmer in my slice of Europe. Simply put, there are so many things wrong with software engineering here that I would not know where to even start to address the issues even if I had the power to do it. And it's not just about money too. It's about something being completely and utterly broken.
• tilolebo 6y ago
  I wish European companies would offer stock options as part of their compensation package. The only European company that offered me something similar was SAP and it was a ridiculous one time 9k EUR. The American 4-year vesting system is much more attractive. But somehow EU startups won't do that.
• m33k44 6y ago
  It is about the mindset that needs to change for the SWE salaries to increase. I was working for a world leader in mobile space. The company was located in a place where there are lot of startups, big world leading local companies, lot of investment activity, US companies etc. The salaries are pittance in that area even though it is a major place of tech and innovation. I will give you an example of what is the mindset of people(mostly HR) here. There were major changes going to happen at this company I was working for(we didn't know at that time, but came to know much later). The usual trick HR plays in these types of cases is to increase some perks to keep all employees "happy" so that they don't leave the company. So the HR of this company announced a perk via email, that the company will be providing "fruit bowl" to employees every day in the morning. Everyone was excited as there was no other means of eating at the office except for a small vending machine that delivered limited supply of sandwiches and a small coffee machine(did I mention that this company was a world-leader?). The day was announced for the "fruit bowl" perk. So on the day of the perk, when people came to the office they saw that a small bowl of fruits was kept in the "kitchen". There were 2-3 bananas, 2 pears, 1-2 kiwifruit, one apple and a bunch of grapes. One senior engineer who was with the company almost since its inception sent an angry email to the HR and CC'd it to the rest of employees at the office asking them how on earth this fruit bowl was going to be shared between 50+ employees at the office. The HR's reply was(again CC'd to everyone in the office) "But there are grapes"! And I am not kidding you, I saw this type of "perks" being advertised in the country where I am. The perks are something like this: "We provide our employees with lunch on Fridays" or "We provide our Employees lunch on first Thursday on the month" etc. What are engineers, beggars? But that is common in companies that are founded in the country where I stay. When I moved to an US founded company in my country, not only did my salary increase substantially(by local salary standards) but the perks were something like this: Breakfast, Lunch, Pizza if had to stay late, unlimited supply of coffee, onsite postal service, onsite laundry, haircut, manicure, shoe-polish, ironing service, on-site shop for snacks, payment for car fuel(extra pay if the car was environment friendly), 24-7 access to free gym at the Marriot, discounted shopping coupons and the list goes on. And this was not FAANG! The reaon this is happening is because(I learnt this indirectly), the local companies collaborate, in partnership with recruitment agencies, behind the scene to not only keep salaries low but to share the information with HR that someone is looking for a job or has interviewed at some other company. In the US, if I am not mistaken, there was a very famous litigation that forced US companies to stop collaborating in artificially keeping salaries down and deliberately not hire from certain companies. This is not there in Europe I suppose.
• amai 6y ago
  Create a union for software engineers, make many software engineers join and threaten employers with labour strike. It works for other professions, so why not for software engineers?
• nodelessness 6y ago
  I am based out of Europe. I am a developer here. I have worked in a different tech market before coming here - India. The whole of Europe's tech scene is smaller than India's. I think that is the reason for the pay gap. Even despite that the pay for engineers is significantly above the median wage. I live in the Netherlands and I make a salary similar to doctors, lawyers and dentists. So the face value of the salary may be lower but it is a lot for here.
• sneeuwpopsneeuw 6y ago
  Just a random question. But is it common that SWE is used as a shorthand for Software Engineering? In the Netherlands I always have seen the shorthand SE instead.
• Grustaf 6y ago
  Salaries in Europe are less spread out than in the US and you don't need a lot of money to live a comfortable life here. Plus, European companies are smaller.
• UK-Al05 6y ago
  I think a lot of people isn't the fact we earn less, because we do get more benefits. We acutally earn less than other professions like accountacy, etc Where as in america that isn't true.
• davidwsilva 6y ago
  My 2 cents: we are living in a certain time when where you live is not as relevant as what you do. IMHO, if you work in areas of high demand and few available professionals (such as machine learning, artificial intelligence, quantum computing, cybersecurity, machine-human interface, etc) you will be a desirable asset and will probably be in the position of choosing what offer is the best one for you. Recruiters are going crazy on Linkedin right now and before you ask they let you know that you can work remotely with very competitive salaries. So as an attempt to answer your question as of how to increase SWE salaries in Europe (as in any other place in the world really) is to consider making a move towards some hot career paths related to areas such as the ones I cited (not restricted to those obviously). I am a firm believer of this type of initiative. It might take time and be very challenging (and it will) but it definitely pays off.