Data Reveals the Point in Your Career with the Highest Earning Potential
If you’re just starting out in your tech career, take heart in the fact that your salary will likely increase steadily for a number of years before hitting any sort of plateau.
New data in our latest State of Salaries Report finds that average salaries for tech workers increase with age until people are in their mid-40’s, then decline just slightly in the years between 45 and retirement. Read on for more detail on how tech salaries look over the course of a career, as well as insights into how employees’ salary expectations change as they become more senior.
Better with age
The lowest-paid tech workers in our dataset are (unsurprisingly) also the most junior; 20-24 year old software engineers, designers, data analytics professionals, and product managers earned an average of $113K in 2017. Younger workers also see larger salary growth in the early years of their careers, with 25-29 year olds earning an average of $126K and 30-34 year olds an average of $140K. That’s around 11% salary growth every five years, and given these are average numbers, some will see even higher growth rates.
Salary growth slows at ages above 35, with 35-39 year olds earning an average of $146K and 40-44 year olds $151K on average. This represents 3-4% salary growth every five years, a big drop from previous decades—but growth nonetheless.
From ages 45-54, the average tech worker earns $148K, just slightly below the peak for those in their early 40s. The data shows one more increase for workers between 55-59 to $150K, then a dip to $147K for ages 60 and over.
It’s not just salaries that change over the years, but also people’s expectations and preferences. In general, younger employees expect lower salaries than they end up being offered, while more senior tech workers would like to be paid more than they’re offered.
Expectations flip, however, once workers are in their late 30’s, with average preferred salaries for this age group reported to be $1,000 more than average offered salaries. The trend continues for workers through their mid-50’s, with preferred salaries being just over 1% higher than offered salaries.
The proximity between prefered and offered salaries later on in tech careers seems to suggests that workers are more aware of the value they can bring to a company—and the salary that value commands. While younger workers in the industry tend to underestimate their earning potential, more senior employees have a better lay of the land, and understandably set more realistic expectations.
Know your worth
If you’re a more junior employee, it’s worth keeping in mind the above points and making sure not to sell yourself short when it comes to salary expectations and negotiations. While your salary will certainly increase as you gain more work experience, that’s no reason to accept less than an employer is willing to pay you—even if it’s your first job out of school.
Begin researching salaries either before or during your job search so that you have a good sense of numbers before having any conversations about potential roles. There are plenty of online resources with employee-reported salaries, as well as industry-level data (including Hired’s State of Salaries Report) that can serve as guidelines as to what you can expect given your experience, the role, and other factors.
Once you’ve landed on a target salary and the job offers start rolling in, stay true to your expectations and negotiate for more if companies offer you less than expected. Remember that compensation can include things beyond salary, such as equity and other benefits, so take a holistic view when considering offers and use these non-cash incentives as leverage if the company won’t budge on salary. Finally, once you do decide on a role, don’t let your salary sit static for too long—high performers can expect significant salary growth early in their careers, so continue re-negotiating for more once you’ve proven your worth and started to move up within the company.