Exactly. You can't whine about the lack of talent and at the same time offer 50K-60K EUR to senior engineers...
I'd say, "cheap labour" is (was?) the main reason one might find Berlin attractive.
That being said, I'm all for higher wages in Berlin and happy to see that some companies (like mine, SoundCloud, Zalando, ...) are paying quite a bit above market average to attract talent.
What is more interesting is that around EU prices of cars / consumer electronics, etc is relatively the same [1]. Not to mention airplane tickets, holidays which also cost the same in London and Berlin, but guys from London can spend on these more.
As a summary IMHO, having a small rent doesn't mean that competition rules shouldn't apply for Berlin and it's talent pool. From my perspective it looks like they don't. Founders put average salaries for their teams in their projection plans and in the end have their hands tied, because "no budget for 80k+ developer". It's a bit sad. Kudos to your companies ( exclude Zalando - sorry ) for putting more money for employees, nevertheless I consider them settled companies already, since they are huge.
[1] : http://www.iclarified.com/55272/iphone-6-prices-around-the-w...
Except that people contemplating a move from elsewhere -- especially from outside the continent -- need to think about certain things beyond their immediate living expenses. Like, you know, building savings buffer for the (inevitable, for most) return home, and maintaining a salary level not astronomically far off from what they can get in other major hubs (simply to not have to flinch at that inevitable question, "How much are you currently making?").
Which is what is fundamentally broken with the idea that salaries just need to match local living expenses. 80K salaries would do a lot to bridge the gap for outside talent, and wouldn't cost all that much more -- and in any case not nearly much as the opportunity cost of missing business opportunities due to not being able to assemble performant teams.
Again, I'm all for higher wages in Berlin, but let's be realistic, the market rate is what it is, no company in its right mind is going to hire someone asking for +50% with no good reason.
Also, this thread is about European tech hubs. Have a look at average startup salaries in London, Paris, Nordic countries, ...
They can give up on the idea of recruiting people from major hubs (SV/London/NYC) then.
Generally people who have some sense of reasonableness and proportion (that is, who don't aren't fixated on the dollar amount of their salary to the exclusion of all other factors) don't mind taking a bit of haircut to live in a greatly more affordable area (and to do interesting work).
But a 50% haircut ($120K to $60K) is really a hard pill to swallow for such folks.
From the SV and NYC, you're probably right. From a company's point of view, why would you even try? In Berlin you can easily hire people from all over Europe and nearby countries without much immigration hassle.
As for London, I don't agree, it's very easy. London salaries aren't that great on average, not every software developer works at a hedge fund.
Well a few lines up from here someone was claiming the exact opposite -- "there's a huge lack of talent." (Which would seem to imply both local talent, and talent that can be drawn from outside).
- London: higher salaries, much higher CoL => lower disposable income
- Dublin: barely higher salaries, higher CoL
- Amsterdam: similar/lower salaries, higher CoL
- Paris: lower salaries, higher CoL
- Stockholm, Helsinki: lower salaries, higher CoL (and crazy housing situation in Stockholm)
- Southern/Eastern Europe, Baltics: low CoL but the salaries are bad
You want to make good money? This leaves Oslo and Copenhagen where your overall purchasing power isn't going to be that much higher. The true outliers are Luxembourg and Switzerland where the tech ecosystem sadly isn't very exciting (why do you think a Swiss would take a job in Berlin? :)
I don't think Europe will ever be able to create a tech hub similar to the SV. And without a high concentration of talent, salaries can't go that much higher. London might get somewhere closer to NYC, but right now there's a very significant gap between finance and the rest. And Brexit will certainly not help.
Still probably more expensive than Berlin though :)
Not really. From my experience, only very large companies can sometimes offer you about 1-2K as a compensation for your relocation expenses and that's it. Consider yourself very lucky.
>> the market rate is what it is, no company in its right mind is going to hire someone asking for +50% with no good reason.
High living expenses is a good reason already. Also, what is not immediately obvious, an employee whose mind is constantly occupied with things like looking for a cheaper apartment or finding a more paying employment is not going to be performing well. He/she has other needs and building your product well just isn't high priority for them.
My experience has been that German bosses in general do not comprehend how hard and expensive it is for somebody from far away to come to Germany and organize their life in there. A lot of people arranged for everything they need in life years ago and already forgotten about it. With the young generation, many live with their parents, they basically have their own free apartment in the parent's house, they have a car purchased for them and some money in their bank account to cover their immediate needs. A very convenient setup which makes them oblivious to how much those things actually cost in the real world. It happened many times when in a conversation with them I shared my experiences and practically the universal reaction I was receiving from them was along the lines of: "Really? Now, that's tough. Good luck to you then."
If you come to a new country you by definition have nothing and you have to procure everything from the most basic tools to whatever you're going to need as a professional. Consider what you have to purchase/pay for:
Rent an apartment, pay the security deposit, pay the agent commission, purchase a set of furniture for the entire apartment (most are offered empty and unlivable), purchase the household appliances. Unless you fancy living with roommates, eating junk food and sleeping on the floor.
If you're a software engineer, you're most likely going to be buying a workstation, a couple of monitors, a large desk, an ergonomic chair, a printer, a scanner and whatever else you need. Unless you plan not to do anything programming-related beyond office hours.
If you're going to a location where the public transportation system is not well developed or if they like to call strikes there all the time, you'll also need to purchase a car and get yourself a local driving license. Unless you enjoy losing hours in commute and regularly being late for work.
See how the numbers quickly add up. And somebody's got to pay for all this fun.
Notice how I'm talking about the basic stuff only that practically every person would need. I haven't even gone into family/childcare expenses.
I remember having a conversation with my boss about all of this. I was trying to get across the point that the amount I was receiving was making it impossible for me to set up a life at that location. To which I was told if I was unable to rent an apartment then I should consider renting a room instead and share the apartment with others. Now, that's positive. Definitely a thing to say to a talent who has multiple other options and the whole world open. And since the same level of payment was being hold firmly by all other German companies I negotiated with, I finally made the choice to move out.
That probably explains why there's so little true talent you can find in Germany. The treatment just isn't good.
For an outsider to come to Germany and attempt to set up a life there from scratch, they would need at least 60-70K (for medium towns) and at least 80-90K for places like Munich, Stuttgart or Frankfurt, probably even more. These are the numbers from several years ago, today everything has become much more expensive. And for a family person even more than that.
Speaking from experience, I lived and worked in Germany for several years, and eventually I had to leave. One of the main reasons was the low payment, I was basically struggling to make the ends meet (with my modest salary of only 40K). In the end I decided I had better things to do with my time and returned home. I am aware of other people who finished their studies, had a look at the local job market, did the math and didn't even bother to try things out.
The other reason that pushes talent away from the German market is lack of recognition. There is some unhealthy division of labor that is prevalent in German companies. Basically, native Germans are deemed to be the brain center of the entire operation and foreign specialists are regarded as grunt workers who have little say in the process or influence over things (as well as practically no opportunities to rise up in the ranks). I can't see any real talent being enticed by this general framework.
As a resume, German companies need to pay much better and need to open up to other people and other cultures, if they want to become a real startup hub. You can't build a rich and vibrant place full of progressive ideas around a close-minded mentality and with people trying to survive on a diet. With the present state of things, they might trick some talent into joining on a case-by-case basis but most likely that relationship will not last.
Do I count myself as a talent? I really can't say. I'm an educated person (I have both Russian and German academic degrees), also enthusiastic and entrepreneurial type, full-stack developer, I can do complete projects and have ideas of my own which I've been trying to turn into my own products. I suppose I could have contributed a lot in a receptive environment, but my experience was that nobody really needed any unsolicited input or contribution, you just implement the things as you're told and the thinking is done by the other guys. So I took my ideas elsewhere.
This all truly is a shame, because on the whole Germany is a fantastic country with lots of nice and smart people. Yet there are certain [mental] barriers that prevent it from becoming something more. I very much hope people eventually remove those obstacles and then the IT industry will begin to flourish in Germany.
And yes, Berlin really is a cool place to live in. If it were to become a startup hub, then it would be just awesome.