US tech talent expects a salary raise, considers after-COVID-19 office plans and possible moves

Hired's annual State of Salaries report also revealed black tech workers still earn--and expect--substantially less than any other racial group.

Businessperson Opening Envelope With Paycheck

Image: Getty Images/iStockphoto

The State of Salaries report from Hired.com offered some surprising results due to the coronavirus pandemic's effect. Hired's annual review explored changes in salaries, COVID-19's effect on salary expectations, and if remote work will take technology talent from pricey coastal hubs to a location with a lower cost of living. 

Tech workers speculated that once the coronavirus pandemic is over, they will go into the office at least once a week. In the next six months, nearly half (49%) of tech talent expect a raise of a minimum of 10%. They're also considering their living situations and may be on the move from the traditional tech hubs like Seattle, San Francisco, Los Angeles, and New York: 53% said they would be either "likely" or "very likely" to move to a city with a lower cost of living if they could work from home forever.

SEE: Coronavirus: Critical IT policies and tools every business needs (TechRepublic Premium)

Race's relevance in the tech industry

With the Black Lives Matter movement and protests worldwide, it was revealed in the Hired report that black technology workers still earn--and expect--substantially less than any other racial group. It reveals that existing diversity, equity, and inclusion initiatives are not making a meaningful impact. 

State of Salaries reported: "The salaries offered to black candidates, while significantly higher than in previous years, were still the lowest of any racial group and $10k less on average than those offered to white candidates. Black and Hispanic candidates continue to expect lower salaries than their white counterparts." When job seekers create a profile on the Hired site, they're required to include a preferred salary, based on their skills and the job they want, and "we found that black and Hispanic candidates list a preferred salary that's $9k and $4k less, respectively."

SEE: Life after lockdown: Your office job will never be the same--here's what to expect (cover story PDF) (TechRepublic)

"Wage gaps correlate with a phenomenon known as the 'expectation gap,' talent expecting to earn less than their eventual offer," said Mehul Patel, CEO of Hired.com. "The expectation gap is borne from a variety of external factors including lack of easily available compensation data and imposter syndrome which, combined with other influences, further cement the wage gap. To reach equity, greater salary transparency within companies and more publicly available data during the job search process can both significantly help reduce wage gaps and ensure that job seekers know the market value of their skills."

Before and after COVID-19

Hired analyzed salaries for software engineers, product managers, DevOps engineers, designers, and data scientists to examine reliable salary benchmarks. Clearly, this period of evaluation represents the new normal, and working from home (WFH) as COVID-19 shuttered tech HQs. It concluded that, "it is still too early to tell whether the 2020 tech salary trendline will stay steady" or be forever considered as before and after COVID-19. Report writers strongly recommend that as both companies and tech talent navigate the new normal, "it's more essential than ever to remove the stigma around salary discussions and promote transparency."

Pre-COVID-19

Before the pandemic hit the United States, the US market average salary was $146,000 vs. a global average of $130,000, and tech salaries grew in every major market in 2019.

The largest salary increases were for jobs in Austin and Toronto, with a 10% increase for each city. 

SEE: COVID-19: A guide and checklist for restarting your business (TechRepublic Premium)

The San Francisco Bay Area continues to boast the highest pay in all of tech, a 7% increase (average salary, $155,000) over the previous year.

Despite ranking third for highest average salaries behind New York and the San Francisco Bay area, Seattle had "the most modest salary increase at 3%."

Tech salaries in the healthcare industry went way up, with an average salary of $151,000 in the US.

These jobs had the highest pay rises in salary, from  2016 to 2019:

  1. Product management
  2. Software engineering
  3. Data science
  4. Design

If companies issue a permanent WFH order, there will be tech talent moving from the major hubs into places that have a lower cost of living. With Bay Area tech employees being generously paid (justified by the very high cost of living), the Hired report examined how much further average tech salaries in other cities stretch, when compared with the Bay Area.

Key living factors considered:

  • Rent
  • Real estate
  • Utilities
  • Groceries
  • Local taxes
  • Transportation

In other words you get more bang for your buck if you move from the Bay Area to either Austin or Denver, for example.

2020 state of salaries

Image: Hired.com

Ageism's ugly role

In addition to the racial bias, ageism is rampant in tech industries, as candidates older than 45 find salaries becoming stagnant and often declining.

ageism-salary-chart.jpg

Image: Hired.com

COVID-19 and after

Tech talent is so incentivized for permanent WFH status that 34% are willing to take a pay cut, but 55% said they would not. "This tells us that today's workforce still values in-office work and collaboration but is looking for more flexibility in an effort to create a schedule that works best for them and their working style," Patel said. "Secondly, with remote salaries being a hot-button topic among the tech community, we discovered that support for adjusted salaries is spread evenly." 

SEE: Top 100+ tips for telecommuters and managers (free PDF) (TechRepublic)

After the coronavirus sent most tech workers to WFH, only 7% said they want to work in the office every day, and half polled want to return to the office once weekly.

Remote or in-office work should have no bearing on salary, say the respondents, who overwhelmingly agreed (90%) the same job done as WFH should receive the same pay as working in the office. However, if the cost of living is factored in, 40% say they support location adjustments.

In job security, 42% are concerned and 58% are not concerned that they'll be laid off in the next six months.

Methodology

Hired's data science team focused on tech talent in 11 markets and more than 425,000 interview requests and job offers which comprised 10,000 participating companies and 98,000 job seekers. Additionally, Hired surveyed more than 2,300 tech professionals worldwide.

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