The tech industry has a reputation for paying high salaries. But is the pay elevated enough to avoid feeling inflation’s bite?
According to Hired’s 2022 State of Tech Salaries report, 82 percent of “local” employees and 64.5 percent of remote workers felt their salaries weren’t in line with inflation and the rising costs of living. The report pegged the average software engineer salary at $160,469 per year, while engineering management pulled down an average of $196,193.
Although a significant portion of technologists now work remotely full-time, there was also significant disagreement about adjusting remote salaries to the employee’s location. Some 35 percent of respondents felt that remote/WFH salaries should be based on the employee’s local cost of living, while 27 percent strongly disagreed with that idea. In a certain way, that makes sense: if you’re an office worker in a city with a relatively low cost of living, you don’t want your remote team member to earn more than you do just because they decided to live in San Francisco or New York City.
At this juncture, it’s also worth pointing out that life in the largest tech hubs can quickly erode a technologist’s take-home pay; for example, earning $176,000 in the San Francisco area is the equivalent of making $216,000 in Austin and $211,000 in Dallas. And since many of the highest-skilled technologists live in these expensive hubs, some companies may be willing to pay a premium to secure their (remote) services.
After a few years of full-time working from home, many workers also want a salary sweetener to come back to the office. Earlier this year, The Muse surveyed 900 new grads about their job outlook; roughly 50 percent of respondents said they would need a pay bump of 20 percent or more to come into the office. “As salary expectations increase, people need more compensation to work on-site. This may also indicate that as people advance in their education and/or career, their life stage can create a desire for more flexibility—including where they do their work,” The Muse’s report added.
Whatever their salaries (and remote or hybrid work arrangements), it’s clear that many technologists are feeling the impact of inflation. Keeping your skills current can give you the leverage you need to negotiate for more compensation—and stay ahead.