Nearly all tech roles are experiencing a global increase in salaries, driven primarily by professionals with over three years of experience, according to a newly released report by recruitment marketplace firm Hired.
The annual 2022 State of Tech Salaries report also found that more companies are seeking to hire remote junior-level talent; however, local salaries for junior-level candidates have failed to grow as quickly as salaries for professionals with more years of experience. This potentially points to salary pressures in current market conditions, with employers leaning heavier into hiring needs for more experienced talent, according to the report, which also details insights on global compensation trends, benefits and remote work shifts.
“The hiring climate this year has been full of contradictions and challenges,” said Josh Brenner, CEO of Hired. “We’ve seen climbing salaries, aggressive hiring, and layoffs — all at once. However, the hiring landscape remains competitive as companies innovate and diversify their teams through remote work. We’re seeing salaries rise globally as employers expand their talent pools and candidates find more opportunities outside their backyards.”
Cities with the top salaries for tech pros both remote and in-person
San Francisco Bay Area local salaries led markets with an average local salary of $174,063, with Seattle ($168,069), New York City ($161,128), Boston ($158,548) and Austin ($157,612) following respectively.
The average local salaries for the candidates in mid-size markets such as Boston, Los Angeles and Seattle have caught up to salaries on par with larger tech hubs such as NYC and SF, the report said.
As remote work continues to be the preferred model, remote salaries have continued to outpace local salaries — with remote roles paying $3,000 more on average globally in 2022. Average remote salaries climbed to $162,950 this year, ranking third highest overall in the report after the San Francisco Bay Area and New York average local salaries.
For remote salaries in the U.S., the top three highest paying markets in 2022 continue to be the San Francisco Bay Area ($175,909), Seattle ($171,432) and New York ($162,261), with remote salaries climbing in all three markets across the board year over year. In the U.S., SF was the only market in which local salaries continue to pay higher than remote salaries (by 1%).
Tech salaries see the highest earning power in Atlanta, which was the highest average salary earning market in 2022 when adjusted for cost of living, according to the report. When the cost of living is factored in, earning an average tech salary of $176,000 in SF would be equivalent to making $223,729 in Atlanta in 2022.
Practical benefits for attracting tech candidates
Surveyed tech candidates’ most compelling benefits from 2021 to 2022 remained the same — flexible work, paid time off and health insurance benefits — but this year candidates are willing to trade a higher salary for practical benefits (health insurance and 401K retirement matching) versus stock/equity in 2021, according to the report.
This may be to alleviate post-COVID burnout, Brenner said, as opposed to “more creative benefits like massages, unlimited PTO or free office meals that candidates have historically looked for. They also continue to prioritize a flexible work schedule as one of the most attractive benefits companies are offering to their employees.”
Additional key findings from Hired’s tech salaries report
Engineering management roles still pay the highest across the U.S., U.K. and Canada
The U.S. sees the highest local salaries for the role on average at $196,000, and engineering management remote salaries are $198,000 — the highest paying salary overall across every market globally. Roles outside of engineering, including design, data analytics and quality assurance, saw the highest salary increases this year, with remote salaries for all roles rising in 2022.
Employers continue to expand talent pipelines, and remote-first employers have a competitive edge
Businesses of all sizes are more open to interviewing candidates from other locations. Candidates showed an increased preference for remote-only roles, with 32% of all active job seekers open to “only remote” roles on the Hired platform as of June 2022, up from 18% in January 2022.
The exodus from traditional big tech hubs continues to push salaries higher in smaller cities
Philadelphia (+12%), Dallas/Fort Worth (+11%) and Denver (+11%) showed the highest average local salary increases across all markets. The other highest growth markets were Toronto and London, globally, which ranked above Boston, NYC, SF and Seattle this year in terms of YoY salary growth.
The salary gap is closing between startups and enterprise organizations
Salary levels at corporations (companies with 300+ employees) versus startups (companies with 300 employees) in the U.S. narrowed to the smallest pay difference to date since 2019.
Candidates are still willing to leave their current role for better fit and higher-paying opportunities
Even though the Hired survey data shows some potential for a power shift to employers in the next six months, if candidates are denied an expected raise in the next six months, the majority (90%) would start looking for a new job immediately, while half of the respondents expect salary increases by 2023.
Despite the current economic climate, remote/flexible work remains a top priority
When candidates were asked if they would be willing to return to the office if it meant greater job security, over half (54%) of them stated yes, but would start looking for other jobs with more flexible remote work options immediately. Only 33% of respondents would trade remote work for a full in-person role with a higher salary.
Continue to prioritize DEI initiatives
As businesses continue to navigate uncertainty, it is important for them to continue to prioritize DEI initiatives, regardless of their workplace model, Brenner said.
“From our data, we’ve seen that candidates are more worried about how the current economic climate will impact DEI initiatives,’’ Brenner noted. Regardless of whether they work remotely or in a hybrid setting, “it is critical that companies continue to uphold DEI initiatives to ensure that employees are supported in a holistic way.”
Details about this Hired survey
The findings are based on the analysis of more than 907,000 interview requests over 47,000 active positions, facilitated through Hired’s marketplace from January 2019 through June 2022. Hired also surveyed over 2,000 tech professionals on their salary, benefits and flexible work preferences.
Executive Briefing Newsletter
Discover the secrets to IT leadership success with these tips on project management, budgets, and dealing with day-to-day challenges.
Delivered Tuesdays and Thursdays