Tech Salary Satisfaction
Overview
One of the most notable data points in this year’s study for HR professionals is a drop in salary satisfaction for technology professionals. Thirty percent of professionals were either somewhat or very dissatisfied with their salaries in 2022, up from 28% in 2021, and the number of those very satisfied dropped to 20% from 22% in the prior year. Further, nearly half of the technology professionals in our study believe they are underpaid relative to other people with the same occupation/skill level.
Do you think that you are underpaid relative to other people with your same occupation and skill level in your current job?
While salary satisfaction and underpaid numbers always need to be tempered with the knowledge that most workers, tech professionals or otherwise, are less likely to say they’re thrilled with their current salaries, this data is important as it could be the beginnings of an overall expectation gap for technology professional compensation. Add the numbers above to data from our 2022 Tech Sentiment Report, which showed that tech professionals were not happy with their merit increases during the year (they received 4.8% and expected 5.2%), and you have a narrative that tech professionals are feeling underappreciated.
How satisfied are you with the compensation in your current or most recent position?
Yes, tech professionals are higher-salaried workers, and will command higher base compensation; that doesn’t mean they’re not looking to organizations to continue to help them grow their earnings as they progress, especially in an environment where high inflation makes every merit increase less valuable. As money doesn’t grow on trees, it may also be helpful to focus on other ways to more effectively engage these professionals. While higher compensation was #1 from tech professionals in how to increase their engagement, “improved health or retirement benefits,” “more training or certifications” and “remote work options” all scored highly.
What would increase your engagement at work?
Salary Change
Throughout 2022, organizations were happy to pay more to attract and retain tech-centric employees: some 66% of tech professionals saw their annual income rise year over year, versus 63% in 2021. A mere 6% received a smaller paycheck, versus 8% last year, and 27% reported their income remained the same. The rise in income could also reflect executives’ attempts to curb employees’ fears of rampant inflation eating their paychecks.
Many companies handed out pay increases in the form of merit raises, which 30% of tech professionals reported receiving. However, another 24% of tech professionals said they landed their income boost by switching employers. For managers everywhere, that’s a warning signal to keep an eye on what rivals are offering, and be prepared to counter if necessary, either with additional cash or some other perk.
Income Change from One Year Ago
Some of this data also suggests that tech professionals aren’t just satisfied with money. Indeed, some 35% of respondents said their income dropped after jumping to a new employer. The number of tech professionals who took an income hit when they switched jobs climbed noticeably (from 29% in 2021 to 35% in 2022), implying that many have different considerations than pay when it comes to deciding where to work.
Employers can’t solve their hiring and retention issues simply by throwing cash at valuable employees. Listening to tech professionals’ needs and concerns, and tailoring compensation packages to take those findings into account, may yield just as much benefit as finding more room in the budget for larger paychecks.
What is the main reason for your salary increase?
What is the main reason for your salary decrease?
Negotiation
The percentage of technology professionals who negotiated their salaries at their new jobs in 2022 was unchanged over 2021. Only 50% negotiated with their new employer, which we consider to be a low number. The percentage of those who negotiated a new job at the same company rose from 31% to 34%.
The biggest change, growing five percentage points, was in the percentage of tech professionals who negotiated in their salary review for their current position. We believe this increase could be fueled by professionals who took on more work due to increased turnover and lack of backfills.
For organizations, an increase in negotiations isn’t necessarily a good thing, as it can put a strain on people-focused budgets. That said, in looking at the increases in tech professional dissatisfaction with their salaries and merit increases in 2022, compensation remains an element that organizations hiring (and retaining) technology professionals need to get right. This means ensuring that salary bands are as competitive as possible, as well as making sure that the organization both responds well to negotiation requests, and, in communication and in practice, shows that these conversations are welcomed.