He sites $165k average for senior engineers (which seems accurate), but its important to note the higher salaries as well - I have friends at Google who are making over $300k. In terms of the worth of a software engineer, the former company I worked at used to bill $150/hour (roughly equivalent to $300k/year salary) in the mobile space. I think that this is more likely a trend though - I don't see it being that sustainable but who knows.
If you add in data science or other technical knowledge, then the price stays high for the reasonably foreseeable future. That is, maybe the rate for iOS programming alone goes down quickly, but proper systems engineering that might also require an understanding of futures markets or Reynolds numbers will almost certainly stay expensive.
The trends appear to be the combination of the demand generated by increasing technology in our every day lives and a supply shortage of tech knowledge workers. I personally don't see the demand for tech falling anytime soon and, optimistically, the supply will take several years to train people with the proper skills to adequately fill these roles
well BMW dealers charge out labour at a very high rate (150 ph hour in central London in 2004) but the actual mechanic doesn't see anything like that in his pay check.
For information back in 2000 the internal Day rate for BT in systems engineering was £300 and the rate for top tier integrators at the time was around the £600-900
Aren't you conflating base with total comp here? $150/hour consulting is $300K at 2,000 hours / year. But if that's $300K base for your friends, then the total is likely way above $500K (bonuses, stocks...) He did say base $165K on average though, which sounds too high, TBH. Surely total comp average can be above that, but base?
$150k base for a guru-level talent in Austin is very reasonable. I'd expect somewhere around double that to adjust for the cost of living in San Fransisco.
Pretty common. At mid levels (senior manager, director), base is ~50% of total. At senior levels (VP, CxO), base is less than 25%. At the extreme (CEOs of major corps), base is negligible (e.g. Costello's base is $14k out of a total of ~$8.7 mm).
You could find consultants and firms billing $150/hour in the middle of the country during the post-dotcom years. That's not remotely as surprising as $300k/year salary.
I think this upper end is a lot more interesting than the mean. I'd love to see data on what the distribution in the upper percentiles of software engineers and engineering managers looks like, especially compared to traditionally high-paying professions like finance, law, medicine, etc.
I see the author giving zero evidence to support his claims. Well, apart from anecdotes about how people are getting hired at higher salaries (which is most likely hiring propaganda).
I'm very curious if this will lead to companies opening offices in other parts of the country - after all you might get two engineers for the same price you'd get one in SF.
Along the same lines, it's worth remembering that Bay Area companies aren't just competing with other Bay Area employers, they are also competing with equivalent jobs in areas with lower costs of living.
That means that Bay Area compensation packages need to keep ahead of the explosive growth of the cost of living in the Bay Area in order to stay competitive with an equivalent company in Denver or Houston.
In particular, I'm curious how much the cost of housing is driving growth in base salaries for Bay Area technologists.
For people complaining about engineer salaries: the median "fresh out of B-school" offer in the Bay area seems to be $125k base + $20k signing bonus + substantial bonus target.
Hence the reason cost of living is through the roof and the valley is becoming known more and more as just an echo chamber. Silicon Valley bends the laws of economic reality, but it won't last forever.
Two things:
1) The article is from March. If they are shilling, they are not doing a good job.
2) The article is the mobile version. The call to action is probably visible on their main site.
It's not on their full site [1] (as of right now).
But either way, there's nothing wrong with "content marketing" as long as the content is sufficient quality and not spammy. Wanting to build a business and making money is not a evil dark pattern.
It's one of the few ways to market that adds value, rather than simply promotes. But of course there are those who exploit it evilly.
The article implies that bidding wars and expectations are driving salary growth, but how about an alternate hypothesis?
I'm curious how much the escalating cost of housing is driving Silicon Valley base salary growth.
If I were in Silicon Valley making $130k base, I would be very interested to hear about $100k base jobs in lower cost of living areas. In areas like the sun belt, cost of living can be 40-50% lower than in the Bay Area, especially when you compare apples-to-apples for housing (i.e., a 3 bed, 2 bath in both markets).
Silicon Valley employers are competing with startups in San Antonio as much as startups in the Bay Area and the rest of the Pacific Northwest.
Boulder has been lagging somewhat, but starting to see averages approaching that range (the deleted comment mentioned $120K-ish). I also wish there was a way to measure the quality of pub/cafe conversation, because I feel like that has improved dramatically as of late.
Either way, people and companies in the Bay Area will have a hard time if the state of things gets too out of sync with the standard-of-living expectations of the rest of the U.S.
I've been wondering about the living cost disparity for a while. So far, there's no evidence of trouble. I think it would be a reasonable move, however, for several big companies to all open offices in a (single) different area. This would allow employees to migrate without feeling locked in the current employer.
I, too, am curious about how much of this is driven by housing costs.
The salaries sound impressive until you start adjusting for cost of living. I live in a part of the country with a very low cost of living, and make what I consider to be a decent salary for a developer (less than six figures). According to CNN Money's Cost of Living Calculator (http://money.cnn.com/calculator/pf/cost-of-living/), the equivalent standard of living in San Jose would require a salary of $131K (or $140K in San Francisco). Suddenly, the base salaries the article cites don't sound so impressive.
DC, Baltimore, and Austin have pay at ~80-85% of SV levels with 50% cost-of-living.
Chicago is a good option if you don't mind working in finance. Lots of companies out there that pay even better than SV; cost-of-living comparable to DC or Austin.
If your a single person who lives with roomates although, you can have rent just be $1200 vs $800 and capture the ~%15 extra income for your own savings.
I recently moved to the Valley from elsewhere. There are two key differences between "other places" I've experienced (Minneapolis/St. Paul, certain areas of Florida, Colorado, and Texas) and the Silicon Valley: employment availability and quality of life.
I'll just say this: a true "apples-to-apples" comparison can't be restricted to, e.g. the cost of a 3/2 in each market. The availability and quality of public services (parks, schools, government offices, etc.) and, for me, exposure to a variety of cultures, is a huge factor. Additionally there is consideration for the availability of work. My experience is that there simply isn't the wide availability of jobs elsewhere as in the Valley, even in places that are "hot" in the start-up scene, and for the most part they are more "enterprise-y" in nature (i.e. software developers belong in the IT department, are cost centers, and should be considered as fungible as our call center staff). Given the relatively disloyal, and even antagonistic view companies take towards employees I consider that last one to be a huge factor.
I will consider moving out of the Valley for a lower salary, when those places with lower salaries have: a) much higher job variety with more tech/software centric companies; b) much better public services and facilities.
Check out Southern California. I've recently moved down from Bay Area (cashed out on rising real estate prices, which makes my previous years of living there rent-free), and there's a good mix of technology companies competing for talent with Bay Area outfits, so reasonably similar salary/equity ranges, with much better array of public services (decent parks with playgrounds, roads that are actually paved, number of people defecating on city streets close to zero, etc.)
The drawback is car-centric culture. I hate driving, but didn't realize how much I hate it, until I moved down here.
a) Tons of other places have a variety of startup employers. You don't seem to be counting B2B startups that serve particular sectors like air travel, energy, manufacturing, government, insurance, etc. They don't blog about javascript, but that doesn't mean they don't exist.
b) Are you talking about a metro system? I can count on one hand the number of U.S. cities that have the population density to support that. Feel free to make that a deal-breaker, but realize that you're paying a premium in cost-of-living and limiting your career options and exposure to other ways of life.
Otherwise, I don't know what public services means. The DMV in smaller towns tend to be much better. They have museums, concerts, conventions, and theaters in other cities.
I am 29 years old. I command a salary just under his 2007 numbers as a senior engineer. Yet, I am not a senior engineer nor do I live in SV. I live in the DC area and I have an expected goal, by the time I am 35, I will either be making 180k or will own a profitable startup. By that time, I will consider my self senior. But I will also have another 30 solid years of development in front of me. Which could in fact drive the price up much higher.
They are just trying to advertise their site...they are recruiters. not good ones in fact. I've worked with them before. They don't give a sh*t about the people just their wallets.
I realise this article is from a recruiter and grains of salt etc., but if these salaries are accurate because of limited supply in the SV area, then I really hope this further opens the way to remote working, particularly from other parts of the US and Canada. I suspect there is a largely untapped pool of senior-ish people out there that would be fine to work with remotely. The tools are getting pretty good although I freely admit there is still some ways to go.
Granted, face-to-face is still necessary sometimes. I fly down to SF once a quarter to meet with my long-term client. They get a break on salary and I get to work at home so everyone's a winner.
You can actually filter by remote jobs on https://angel.co/jobs and the number is already significant.
Some companies build their culture around team's physical proximity and rapid iteration and communication flow that you get from that, but non-tech startups are usually pretty happy hiring someone to do Rails or iOS or other non-core function for them.
You might have a point if you want to draw attention to the fact that $150k in San Fran is equivalent to $80k in other areas, but bringing up inflation (at a time when inflation is stable and relatively low) makes you sound like a goofball.
What this tells me is that if you've reached a six figure salary point, it's time to branch out if you want your income to continue to grow.
If you were entry level at $70k, and now you're making $140k as a senior engineer, you're going to have to either do a start-up or add a new, significant skill to your resume if you want to double up again, because you've peaked as "just a developer".
> Right now top engineering talent is getting 165k and above. With some C-Level executives and lower-management in the same range it can make things challenging from an internal-equity standpoint. Do companies stick to their guns and lose out on candidates or do they look to adjust their entire structure?
It would be interesting if companies become willing to give top engineers a higher compensation than management.
50 comments
[ 3.8 ms ] story [ 151 ms ] threadFor information back in 2000 the internal Day rate for BT in systems engineering was £300 and the rate for top tier integrators at the time was around the £600-900
That means that Bay Area compensation packages need to keep ahead of the explosive growth of the cost of living in the Bay Area in order to stay competitive with an equivalent company in Denver or Houston.
In particular, I'm curious how much the cost of housing is driving growth in base salaries for Bay Area technologists.
The MBAs tend to make that 2-10x capture less likely...
... and, as you noted, drive up the cost of living.
This is an advertisement.
But either way, there's nothing wrong with "content marketing" as long as the content is sufficient quality and not spammy. Wanting to build a business and making money is not a evil dark pattern.
It's one of the few ways to market that adds value, rather than simply promotes. But of course there are those who exploit it evilly.
http://www.jobspringpartners.com/blog/posts/2013/3/4/the-war...
I'm curious how much the escalating cost of housing is driving Silicon Valley base salary growth.
If I were in Silicon Valley making $130k base, I would be very interested to hear about $100k base jobs in lower cost of living areas. In areas like the sun belt, cost of living can be 40-50% lower than in the Bay Area, especially when you compare apples-to-apples for housing (i.e., a 3 bed, 2 bath in both markets).
Silicon Valley employers are competing with startups in San Antonio as much as startups in the Bay Area and the rest of the Pacific Northwest.
Either way, people and companies in the Bay Area will have a hard time if the state of things gets too out of sync with the standard-of-living expectations of the rest of the U.S.
I've been wondering about the living cost disparity for a while. So far, there's no evidence of trouble. I think it would be a reasonable move, however, for several big companies to all open offices in a (single) different area. This would allow employees to migrate without feeling locked in the current employer.
The salaries sound impressive until you start adjusting for cost of living. I live in a part of the country with a very low cost of living, and make what I consider to be a decent salary for a developer (less than six figures). According to CNN Money's Cost of Living Calculator (http://money.cnn.com/calculator/pf/cost-of-living/), the equivalent standard of living in San Jose would require a salary of $131K (or $140K in San Francisco). Suddenly, the base salaries the article cites don't sound so impressive.
Chicago is a good option if you don't mind working in finance. Lots of companies out there that pay even better than SV; cost-of-living comparable to DC or Austin.
I'll just say this: a true "apples-to-apples" comparison can't be restricted to, e.g. the cost of a 3/2 in each market. The availability and quality of public services (parks, schools, government offices, etc.) and, for me, exposure to a variety of cultures, is a huge factor. Additionally there is consideration for the availability of work. My experience is that there simply isn't the wide availability of jobs elsewhere as in the Valley, even in places that are "hot" in the start-up scene, and for the most part they are more "enterprise-y" in nature (i.e. software developers belong in the IT department, are cost centers, and should be considered as fungible as our call center staff). Given the relatively disloyal, and even antagonistic view companies take towards employees I consider that last one to be a huge factor.
I will consider moving out of the Valley for a lower salary, when those places with lower salaries have: a) much higher job variety with more tech/software centric companies; b) much better public services and facilities.
The drawback is car-centric culture. I hate driving, but didn't realize how much I hate it, until I moved down here.
b) Are you talking about a metro system? I can count on one hand the number of U.S. cities that have the population density to support that. Feel free to make that a deal-breaker, but realize that you're paying a premium in cost-of-living and limiting your career options and exposure to other ways of life.
Otherwise, I don't know what public services means. The DMV in smaller towns tend to be much better. They have museums, concerts, conventions, and theaters in other cities.
Granted, face-to-face is still necessary sometimes. I fly down to SF once a quarter to meet with my long-term client. They get a break on salary and I get to work at home so everyone's a winner.
Some companies build their culture around team's physical proximity and rapid iteration and communication flow that you get from that, but non-tech startups are usually pretty happy hiring someone to do Rails or iOS or other non-core function for them.
If you were entry level at $70k, and now you're making $140k as a senior engineer, you're going to have to either do a start-up or add a new, significant skill to your resume if you want to double up again, because you've peaked as "just a developer".
It would be interesting if companies become willing to give top engineers a higher compensation than management.
That irrationality is why there are so many consultants.