Tech workers demand high salaries despite hiring slowdown
www2.staffingindustry.com
www2.staffingindustry.com
As in the "high salaries" of tech workers is just what average folks used to make relatively speaking previous decades.
"Luxury areas" are not somehow "optional" for the people that have to live there to work there, as the term "luxury area" implies.
Prior to COVID many similar disparities were able to be found. In fact, there was a growing counter-urbanization movement taking advantage of it. It does seem opportunists sitting at home not allowed to do anything else during COVID squeezed a lot of them dry along with everything else, granted.
Although most people want to buy a house, given a smartphone and a rent or a house but living with no smartphone or internet, I think most people would choose pay rent and have access to internet and a smartphone.
1: https://www.epi.org/publication/charting-wage-stagnation/ 2: https://clockify.me/productivity-pay-gap
For me at least from family in construction work it's very clear. They made the same hourly wage in the 80's as many workers do now, despite how much more productive construction has gotten.
The second article has a good quote:
> Wages and productivity were not growing at a directly proportional pace, but for some industries, such as high-tech (especially nowadays), wages are proportional to productivity. It all depends on the choice of variables taken into account.
As a European I wish more FAANG companies started hiring software engineers remotely. The only American companies that have offered me remote jobs with FAANG tier salaries were cryptobro startups.
The companies are pushing RTO in a bone headed way, will then have to pay the premium of having to hire talent in those expensive markets. It’s a fixable problem that companies don’t seem to want to fix.
The most expensive real estate markets are expensive because of tech
The demand for people who can write software slows down, but we aren't anywhere near a peak plateau where software engineering jobs aren't needed. Silicon Valley isn't going to turn into the rust belt anytime soon.
What's changing are the types of skills needed, and engineers are imminently poised to do that. Unlike factory workers our skills are malleable and constantly changing.
top tier still can see lots of salary increase in growing hot areas, like OpenAI pays 1M to ICs, bottom tiers yes, may be overcrowded.
For example it is likely very different type of people were building Google originally when company had 25k headcount in 2010, and now with 200k headcount and abusing monopoly.
The hiring pipeline has always been and continues to be hiring the least risky developer instead of trying to hire the "best" developer.
When the applicants far out number the time it would take to give a more in-depth hiring review for each candidate the approach to hiring the least risky candidate is one of "remove everyone who is risky and then see what you've got left."
This can look like "find reasons not to hire" ... but also consider that sometimes when you've got 300 applicants and even a simple test of programing capability rules out 270 of them (not exaggerating here) and the 30 that remain have unrealistic explications of compensation (not every company can match the pay of big tech) or have other red flags that make them a risky hire, well, that's a labor shortage.
When the hiring pool is smaller and the stickiness of hiring a candidate is greater (a new hire jumping to big tech after getting 6-12 months of of experience is a common thing), then you can hire for the potential to develop a worker. Developing an employee for half a year and then having them leave means that you now need to switch (again) to a very risk adverse hiring approach.
Spending 30 minutes per applicant gives way too much time commitment for the people doing the interview and way too long "candidate applied" and "narrowed down to less than five people" such that the best candidates have found a new job weeks before you're at that point.
This isn't the best way to hire people - its the least worst when factors of hiring bias, timeliness of process, and risk reduction enter into how hiring is to be done.
Devs are also the sort who can and will work for themselves or small companies. There's no leverage by employers - we can leave and work anywhere, or for ourselves, even in the current climate.
Another reality workers in all industries are starting to believe: all of us, especially the working class, deserve the fruits of our labor.
That strikes me as exceptionally high vs. past years when I was shopping around.
Very much an employer's market since half of the world wants to move here.
Till I landed my first contract (which included additional work for employer on residence permit as new entrant) I applied cca 75x, had few interviews (and landed 2 offers at the same time). This was with 6 years of diverse experience in exactly what I was looking for there, studied on uni exactly this, knew languages.
Second job was much easier, agency and company wanted exactly me, but that was rather unique match.
Compared to Czech republic I moved there from, they were so desperate for seniors that even 10 years after resettling they kept bombarding me almost every day with offers to move back, immediate hires for senior positions and high (locally) salaries.
Does this reference a tech sector-specific wage inflation?
Wage inflation will only peak if workers roll over and let employers take advantage of them.
Not too long ago that was lesser than SWE? I know plenty of certificate chasing cybersecurity professionals that can barely keep $100,000
The high-end cybersecurity jobs require zero certificates. Qualifications > Certifications.
If you have actual expertise in red-teaming, proven track-record with discovering CVEs etc, the money is there.
I stopped making reasonable offers to them. It was always a waste of time. We just move on now.
If we had, that would indicate their price was reasonable and that we needed to change our salary ranges.
If the only reason someone worked for me was because I was willing to pay them the most, I think I'd re-think my entire company culture.
Feeling like you’re undervalued or being taken advantage of? That’s a huge factor in someone leaving.
Being paid substantially under market? I would feel both undervalued and taken advantage of.
companies just don't want to pay it. they want you to make as little as possible
That's a loaded statement. Salaries are set based on market conditions.
And sometimes you're in a time a place where laborers are expected to take a greater share of the benefits of their labor.
Actually, the word deserve is probably stronger. I think workers deserve to reap almost all of the benefits of their labor, as opposed to capital or leadership benefitting.
This is true, but the long-term market condition has been "There are not enough tech workers to meet the demand."
Honestly, I hate how extortionate the higher education system is in the US, but I benefit from it because it does an amazing job of choking off the supply of labor and keeping wages high. I'd still vote to provide free universal higher education, but the lack of it is what's keeping everyone in the tech sector afloat. Look at what the scourge of affordable tuition has done to European tech workers.
You just don't want to pay it. You want him to make as little as possible.
Then they wonder why they have to pay so much for mid level to seniors.
A technician was a barista who went to a 3 month boot camp[1] that promised to turn him into a "Full Stack Developer" who got railroaded through the basics of the React-Express-Mongo stack (all of which is largely JS) and a certificate. A technician doesn't waste time understanding why the reports are coming out slightly wrong, they'll just go ahead and add some code that updates all the values that are off by 1. A technician is defined primarily by the tool they have and their ability to use it. A technician will do something like have an entire table returned to the client side and then filter through it in the frontend because it that's what they know how to do.[2]
For a while technician's could demand the salaries of skilled engineers by virtue of an enormous shortage, and the fact that VC capital meant there was always another unicorn to sling their code around at. The market is contracting now and the technicians are starting to be unable to demand six figure starting salaries, and get insulted that some of the offers are only 60-70k, which as an aside is still a decent salary for most people in the US, one of my good friends works in construction management and despite his years of experience he just transferred jobs, he was estatic at the prospect of possibly making 80k at his new job, but I digress. My point being I think that part of the problem is there was a bubble in tech salaries for a while that were unsustainable, and now we are seeing a mild corretion.
Notes:
1. I have nothing against boot camp grads who can be valuable engineers and contributors, if they either 1) Were already tinkering and interested in programming before and the boot camp was just their way of getting their foot in the door or 2) They understand the bootcamp is the beginning of their journey and not the end and are willing to put the effort into continuing education.
2. I know this comes off hard on technicians, but I have seen many even supposedly "senior" engineers who are overglorified technicians, the difference between a perpetual technician and an engineer is continually learning. Here's a tip, if you want to be a decent engineer you should probably have a decent grasp of at least 3 programming languages, be able to understand networking basics, and follow everything outlined in Norvig's "How to become a programmer in 10 years."
the problem is that many companies don't have good interviewing process to distinguish such engineers during hiring, so they are lost in crowd and salaries may receive hit.
and
"Long-term demand for tech talent is not expected to abate. Based on its digital ambitions the EU alone wants 20mn technology specialists, which compares with the 9mn it had in 2021."[1]
Seems like the layoffs have been mostly a short-term reaction to the shock of the pandemic era coming to a close. Long-term, we'll soon be back to the steady drumbeat of tech worker shortages.
[1] https://www.ft.com/content/b1b710a1-6d12-43e5-8508-ae4584a72...
COVID’s on track to kill another 200K people in the US this year, plus cause serious health problems for who knows how many more, so I don’t expect any of this to abate. They’ll just keep jacking up interest rates and screaming “NOBODY WANTS TO WORK ANYMORE” until the whole thing implodes.
The issue is middling engineers and junior engineers where before they would expect a 130k-150k salary in a tier 1 city, those offers are gone.
Some people figure it out.
Contract, make an LLC for more contracting, call that LLC experience, interview as senior engineer.
For example I used to work for a F500 retail company prior to and during the pandemic. They had a surprisingly large development department and has tons of jobs available prior to 2020. I was able to get in via a cold application and a seamless interview experience. More recently, I’ve tried going back and they barely have any non lead roles, and I tend to get screened out of the few roles they do post. I even got referrals from some senior people at companies like who think I’d get a good fit only to get screened out because the recruiter/hiring manager doesn’t like that I can’t check off their alphabet soup checklist. Should have spent my career doing resume driven development.
We have basically the same problem as UPS/Auto industry -> no trickle down.
Top 3 auto companies set to make 32 Billion this year. -> 580,000 employees Apple profit is 250 bill -> 164,000 employees