For the second year in a row, Hired has tapped into its data to reveal insights into technology workers’ salaries and the hiring market more generally. Because Hired facilitates the job searching process from the initial interview request all the way to the final job offer, we have unprecedented visibility into salaries across a variety of positions and companies. Most of the tools available to companies and job seekers are flawed and inaccurate. Salary calculators don’t account for company size, years of candidate experience or location, while many job sites are based on anonymous, self-reported data which can vary widely in accuracy. Hired’s data, on the other hand, is based on actual job offers made to real people.
This second edition of Global State of Tech Salaries report is part of our larger effort to bring more transparency to the hiring process and provide an inside look at the compensation landscape for tech workers. As a result of our recent expansion into France, Australia and Singapore, we now have access to salary information in 16 of the world’s biggest tech markets, and have broadened this year’s report to reflect our truly global reach. Moreover, we recently began collecting voluntary demographic data from candidates on our platform, which allows us to analyze how race, age and bias can impact one’s salary.
Ultimately, we want to empower candidates to understand their market value based on their skills and experience so that they can approach the job searching process armed with information. We also want to help companies recruit and hire with insight. We believe this transparency benefits everyone, so that individuals can find jobs they love and companies can attract the individuals who will drive their businesses forward.
Globally, software engineers tend to draw significantly smaller salaries than their U.S.-based counterparts. While there are many factors that contribute to this, one of the most likely causes is that the United States’ tech market is the most mature, which ultimately leads to higher salaries.
For decades, Silicon Valley has been the epicenter of the tech industry, but the rise of new technology and innovation hubs across the United States and the world are challenging the Bay Area’s reign. In fact, after adjusting for cost of living in San Francisco, cities like Austin, Melbourne, Seattle, and Toronto are increasingly attractive spots for tech workers to grow their careers.
In Austin, the average salary for a software engineer on Hired is $110K. But this is the equivalent to making $198K in San Francisco when you consider the cost of living difference between the two cities. Notably, Austin-based companies are especially willing to relocate the right talent, with more than 60 percent of job offers going to candidates living outside the Lone Star State. In comparison, only 30 percent of offers from SF Bay Area companies are given to non-local candidates.
Outside the U.S., we see a similar trend in Melbourne. Even though Melbourne’s average salary for software engineers is a relatively low $83K (A$107K), this is equivalent to making nearly $150K in San Francisco when factoring in cost of living. Like Austin, local companies are willing to relocate the right talent -- nearly a quarter of the candidates receiving offers from Melbourne-based companies are from outside of Australia.
Our analysis shows it’s a great time for tech workers to consider a role outside Silicon Valley. Whether looking to stretch their salaries or to be a part of a growing tech hub, companies across the globe are ready and willing to do what it takes to bring great candidates to their markets.
This year’s data reveals that higher salaries await candidates who are willing to move to a new city. In nearly every market, companies offer more money to individuals who are relocating than local candidates. This is particularly true of European, Canadian and Asian markets, where non-local candidates can earn up to 57 percent more than local candidates. Relocation becomes an even better option when you consider that most companies are willing to offer a package to help with moving expenses.
The importance of an experienced software engineer is second to none, but as companies grow, product managers and data scientists become increasingly critical, a fact that’s underscored by our data. To understand how their salaries have changed, we analyzed year-over-year data for both roles in the US and the UK, our most mature international market.
In the US, product managers bring in the highest average salary offers of any tech role at $138K, with strong year-over-year growth. While UK salaries are lower across the board, product managers are still coming out on top at $83K (£64K) on average in 2016. Data scientists in both countries are also seeing their salaries increase by a healthy margin as well.
At Hired, we believe it is important that companies and candidates understand the impact of bias, unconscious or not, on salaries and hiring practices. Recently we began collecting voluntary demographic data from candidates on our platform, allowing us to explore how a candidate’s identity affects the wages they receive and to share insight on the issues of employee diversity and hiring bias.
On our platform, we are able to compare the hire rates for software engineering candidates on Hired broken down by race, and the results are rather surprising. When we look at our two largest markets on Hired’s platform, San Francisco and New York, the average African-American candidate on the Hired platform is 49 percent more likely to get hired than the average white person. Interestingly enough, the average Latino candidate is 26 percent less likely than the average white candidate, and the average Asian candidate is 45 percent less likely.
The average white candidate on our platform, for software engineering roles in New York and San Francisco, asks for a preferred salary of $126K and ultimately receives an average offer of $125K. While African-American candidates are much more likely to get hired, they are also asking for and receiving a significantly lower salary ($113K and $115K, respectively). Latino and Asian candidates ask for and ultimately receive salaries that are more on par with white candidates, but their hire rate is also negatively impacted.
It's unclear if African American candidates are receiving more offers because they are more qualified, their preferred salaries are lower, because of diversity initiatives, or a combination of those and other factors.
While more attention is being paid to racial diversity, our data shows another form of bias is also present within the tech industry: ageism.
On Hired’s platform, candidates between the ages of 25 and 30 receive the highest number of average job offers. Once candidates pass the age of 45, however, they begin to see a decrease in their average salary and the number of job offers they receive. While salaries peak around ages 45-50, after the age of 50 we see a significant decrease in these individuals’ ability to draw salaries commensurate with their experience. Companies offer an average of $132k to candidates between age 50 and 60, which is on par with what they’re offering to candidates who are ten years younger, and presumably, who have ten years less experience.
From these findings, it appears that after a certain age experience becomes less important and a candidate’s likelihood of being hired may be impacted by less tangible factors such as culture fit or experience with new technologies. It’s worth noting that the majority of Hired’s candidates fall into the 2-8 years of experience range, which may be impacting our data around salary and hire rate for more experienced candidates.