Tech salaries fall in Bay Area, New York City, rise in Austin, San Diego(bloomberg.com)
bloomberg.com
Tech salaries fall in Bay Area, New York City, rise in Austin, San Diego
https://www.bloomberg.com/news/articles/2021-10-19/new-york-san-francisco-see-tech-salaries-slip-amid-remote-work
69 comments
When combined with the nutty 5% CPI inflation we had over the summer, it's not a small chunk of change.
Don't confuse national inflation with regional inflation, though.
I'm pretty sure rent, for instance, has fallen significantly in the Bay Area. That alone could dramatically change the "inflation" rate.
At the end of the day the better deal on my apartment means I have more take home money, despite slightly changing costs everywhere else.
I'm pretty sure rent, for instance, has fallen significantly in the Bay Area. That alone could dramatically change the "inflation" rate.
At the end of the day the better deal on my apartment means I have more take home money, despite slightly changing costs everywhere else.
Rents are still down vs peak (ref: ApartmentList historical data for SF-Oakland-Berkeley and San Jose-Sunnyvale-Santa Clara metros) but housing for sale is way, way up (9% year-over-year, 35% over 5 years).
It did fall, but apparently has recovered to 2019 levels already.
https://socketsite.com/archives/2021/10/rents-in-san-francis...
Still 16% below pre-pandemic levels.
Still 16% below pre-pandemic levels.
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Hmm, I saw someone from levels.fyi report recently that tech salaries had gone up a lot recently, and so they needed to push faster updates to their data. Does Hired really have good data on this, or are only the lower-quality jobs placed on Hired? When the two conflict, I don't trust the data from Hired.
The nice thing about levels.fyi is that they report data per-company, which I can verify from friends and acquaintances is fairly accurate for those companies. It may not give an "industry average" but as long as you know precisely what information you're getting you should be able to draw your own conclusions.
The nice thing about levels.fyi is that they report data per-company, which I can verify from friends and acquaintances is fairly accurate for those companies. It may not give an "industry average" but as long as you know precisely what information you're getting you should be able to draw your own conclusions.
Tech compensation has gone up recently. All the tech stocks are skyrocketing.
Problem is - people think: "Oh, salary is everything" but it's only like half of senior TC.
Problem is - people think: "Oh, salary is everything" but it's only like half of senior TC.
This seems to only consider salaries, which means it's basically meaningless. Personally speaking, 2/3 of my take-home pay is RSUs, and that number has risen much faster than my salary.
Exactly. I took a 50K hit to my base salary (275k->225k) but I'm getting 400K/year more in equity. I was unintentionally part of the great resignation. I've seen many of my friends also leave FAANG after 4-10 years and be offered large raises by pre-IPO unicorns or other FAANG struggling to hire.
Any compensation article that doesn't acknowledge equity for tech is useless and I question their methodology.
Any compensation article that doesn't acknowledge equity for tech is useless and I question their methodology.
Yup, it's just the base salary – might be worth comparing to our data on Levels.fyi for total compensation, where we've been seeing compensation increase overall in the last few months.
> Levels.fyi
In my experience sites like that are only good for a few months of popularity before they start getting too much gamification and/or corruption.
Given how old and popular levels.fyi is now, how can we know that it still provides a good reference point?
In my experience sites like that are only good for a few months of popularity before they start getting too much gamification and/or corruption.
Given how old and popular levels.fyi is now, how can we know that it still provides a good reference point?
We actually don't gate any of our data on the site so there's not really much gamification (you can even view each individual data point [1] if you wish). If you find some value from using the site, our hope is then you might want to contribute back, and if not that's okay too – you're still welcome to use and benefit from the site.
We do encourage users in various places to contribute, but it's still entirely optional. That means less spammy data points since we remove the incentive to submit if you don't want to. That said, we do a variety of things to validate our data including manual review / a community reporting feature, as well as collecting proof docs such as W2s and offer letters [2] to validate the rest of our crowdsourced data. We also now have a negotiation service [3] to help candidates increase their offers which exposes us to how the market is today, and what compensation looks like in real time everyday.
Of course, we welcome any feedback that could help us make the data better and more accurate over time. We're currently working on tighter time ranges (if data is available for a particular company or region) to calculate our aggregate values such as averages, medians, etc.
[1] - https://levels.fyi/comp.html
[2] - https://levels.fyi/verified/
[3] - https://levels.fyi/services/
We do encourage users in various places to contribute, but it's still entirely optional. That means less spammy data points since we remove the incentive to submit if you don't want to. That said, we do a variety of things to validate our data including manual review / a community reporting feature, as well as collecting proof docs such as W2s and offer letters [2] to validate the rest of our crowdsourced data. We also now have a negotiation service [3] to help candidates increase their offers which exposes us to how the market is today, and what compensation looks like in real time everyday.
Of course, we welcome any feedback that could help us make the data better and more accurate over time. We're currently working on tighter time ranges (if data is available for a particular company or region) to calculate our aggregate values such as averages, medians, etc.
[1] - https://levels.fyi/comp.html
[2] - https://levels.fyi/verified/
[3] - https://levels.fyi/services/
I agree with your overall point, but their submission vetting process is at least less automated than say Glassdoor:
https://www.levels.fyi/addcomp.html
https://www.levels.fyi/addcomp.html
Anecdotally, I see many people in SF switching jobs because compensation has gone way up.
Also, seems this article is referring to salary. But most of the compensation growth I've seen is in equity.
Also, seems this article is referring to salary. But most of the compensation growth I've seen is in equity.
> the compensation growth I've seen is in equity.
there's two aspects to equity compensation - grants, and vesting.
It doesn't matter that vesting shares, granted in prior years, grew in value. The employee took risk holding on to it. This should not be counted as increased compensation from their work.
However, if new grants grew, then there is an increase in compensation.
there's two aspects to equity compensation - grants, and vesting.
It doesn't matter that vesting shares, granted in prior years, grew in value. The employee took risk holding on to it. This should not be counted as increased compensation from their work.
However, if new grants grew, then there is an increase in compensation.
I'm referring to people changing jobs, so this is new grants in job offers. Yes, equity packages in job offers are larger now than just a couple years ago.
> It doesn't matter that vesting shares, granted in prior years, grew in value. The employee took risk holding on to it. This should not be counted as increased compensation from their work.
On the contrary, some companies will base their salary increases on share price changes. If the share price remains unchanged over a year, they might bump up your salary 2-10%. If the share price has gone up 20%, they might keep your salary unchanged since you're making "too much" equity now. This is actually not an uncommon practice. With stocks skyrocketing in the past year, I can see many companies being stingy with salary increases.
> It doesn't matter that vesting shares, granted in prior years, grew in value. The employee took risk holding on to it. This should not be counted as increased compensation from their work.
On the contrary, some companies will base their salary increases on share price changes. If the share price remains unchanged over a year, they might bump up your salary 2-10%. If the share price has gone up 20%, they might keep your salary unchanged since you're making "too much" equity now. This is actually not an uncommon practice. With stocks skyrocketing in the past year, I can see many companies being stingy with salary increases.
Exactly; base salary is not a huge deciding factor for me when looking at offers.
“Salary” data is often grossly misinterpreted by those that don’t understand how tech comp packages work. Most highly compensated people in tech don’t make most of their money from “salary” but rather equity (eg RSUs). “Salary” might easily be only 25% or less of their total cash-equivalent compensation in a given year. Seems likely this article is skewed towards jobs that get most of their comp via salary which (generally speaking) are not the most sought after roles in tech.
Is that the part that's only worth usable money in a liquidity event?
RSUs are generally used for employees of publicly traded companies. They are are shares that you are awarded as comp but can only sell after a certain date. They are still at the whims of the market share price but are fully liquid (once vested) and easy to value (just look up the current share price). I’m a given year someone might get $150k “salary” but RSUs worth another $300k.
Very different from say equity in a startup which is very hard to value and often ends up being worth little to nothing.
Very different from say equity in a startup which is very hard to value and often ends up being worth little to nothing.
if it's a public company, RSUs are basically cash
To those noting this is salary only: that's a completely fair criticism. For many tech employees this is less than half of their total comp.
The article explicitly mentions the push for remote work. The one thing I'll add is that it tends to be engineers and/or more senior employees who go remote and these I bet will tend to be above median salaries.
Lastly, to those saying a 0.3% drop is noise, I'll point out that this happened while other areas grew 6%. That seems a little more significant.
The article explicitly mentions the push for remote work. The one thing I'll add is that it tends to be engineers and/or more senior employees who go remote and these I bet will tend to be above median salaries.
Lastly, to those saying a 0.3% drop is noise, I'll point out that this happened while other areas grew 6%. That seems a little more significant.
Presumably Simpson's paradox right? Since salaries are actually up everywhere. The composition is just shifting away from the superstars.
Top talent has freedom and flexibility b/c they can land a remote gig anywhere. Leave for better housing, lower taxes, etc. Bottom talent is stuck in low-productivity old-school employers in the Bay, many probably locked into an office.
Top talent has freedom and flexibility b/c they can land a remote gig anywhere. Leave for better housing, lower taxes, etc. Bottom talent is stuck in low-productivity old-school employers in the Bay, many probably locked into an office.
Potentially, but not necessarily supported by the article.
Simpson's paradox requires that you be looking at averages. An example would be if you compared average salaries of SF vs. Austin, and both tech and non-tech salaries were rising in both places, but tech workers were moving from SF to Austin so the average includes relatively fewer tech workers in SF and relatively more in Austin. The article is comparing specifically tech salaries, so it's free from this sort of bias.
It could have a similar bias by virtue of all being collected from Hired, though. Top tech companies do not use Hired. Hot startups generally do not use Hired. Mid- and low-tier tech companies that want to outsource their interview processes use Hired. If these are also primarily the companies that are going remote-first or moving their engineers to Austin or SD, you would expect to see tech salaries rise in those locations and fall in HCOL regions like the Bay Area. It's a real effect, but not necessarily reflective of the whole industry, which includes a number of large and very high-paying employees that aren't in the dataset because they don't use Hired.
Simpson's paradox requires that you be looking at averages. An example would be if you compared average salaries of SF vs. Austin, and both tech and non-tech salaries were rising in both places, but tech workers were moving from SF to Austin so the average includes relatively fewer tech workers in SF and relatively more in Austin. The article is comparing specifically tech salaries, so it's free from this sort of bias.
It could have a similar bias by virtue of all being collected from Hired, though. Top tech companies do not use Hired. Hot startups generally do not use Hired. Mid- and low-tier tech companies that want to outsource their interview processes use Hired. If these are also primarily the companies that are going remote-first or moving their engineers to Austin or SD, you would expect to see tech salaries rise in those locations and fall in HCOL regions like the Bay Area. It's a real effect, but not necessarily reflective of the whole industry, which includes a number of large and very high-paying employees that aren't in the dataset because they don't use Hired.
"Tech salaries" is a broad enough category that this sort of bias could very much still be present, particularly if the research by Hired wasn't controlling for level, seniority, etc.
I didn't read the report by Hired that this article was based on (because it's useless blogspam) but I did search for the word "control" to see if they were controlling for these sorts of confounding variables, and I came up empty-handed.
I didn't read the report by Hired that this article was based on (because it's useless blogspam) but I did search for the word "control" to see if they were controlling for these sorts of confounding variables, and I came up empty-handed.
Exactly, "IT worker" and "sysadmin" @ 70k are tech workers. So are FAANG engineers making $500k.
> Bottom talent is stuck in low-productivity old-school employers in the Bay
The Bay Area is the world's epicenter of tech talent. It's got the biggest software companies in the world, and recruits talent from around the world with its extremely high salaries.
People working for FAANG, or Oracle, or Adobe, or a thousand other companies are some of the best devs around.
I actually work better in an office, so I drive in nearly every day. (But it's probably just the free food.)
The Bay Area is the world's epicenter of tech talent. It's got the biggest software companies in the world, and recruits talent from around the world with its extremely high salaries.
People working for FAANG, or Oracle, or Adobe, or a thousand other companies are some of the best devs around.
I actually work better in an office, so I drive in nearly every day. (But it's probably just the free food.)
Hired also mentions:
> Exceptions included San Francisco and New York City from 2020 to 2021 due to increased demand for junior talent.
so maybe junior talent is replacing the more senior level talent in SF / NY and depressing wages.
https://hired.com/blog/highlights/state-of-tech-salaries-in-...
> Exceptions included San Francisco and New York City from 2020 to 2021 due to increased demand for junior talent.
so maybe junior talent is replacing the more senior level talent in SF / NY and depressing wages.
https://hired.com/blog/highlights/state-of-tech-salaries-in-...
Or it’s just that SF/NYC are adding a lot of younger new employees.
Both cities hired very few people from colleges, etc last year. In my experience from the alumni association of my college both cities have added more new graduates from our college than any year before, which may reflect some pent up demand.
Both cities hired very few people from colleges, etc last year. In my experience from the alumni association of my college both cities have added more new graduates from our college than any year before, which may reflect some pent up demand.
I also read in Hacker News a few months ago that past year had been a great time to get a raise of salary.
"Employers bow to tech workers in hottest job market since the dot-com era" https://news.ycombinator.com/item?id=28029344
"Employers bow to tech workers in hottest job market since the dot-com era" https://news.ycombinator.com/item?id=28029344
Is -.3% over one year considered statistically significant to draw the conclusion that salaries are falling?
I don't think this was a statistical analysis, but rather just the average change at Hired.com. The article does treat it as though it is an inference about the entire population, though, without justification, and their link goes to Hired.com, not an analysis.
Depends on how much salary appreciates elsewhere. It's quite significant compared to ny and texas (1.1% up + 0.3% down).
Salary is comparative by nature. If your worth increases less than someone similar, then it decreased.
Salary is comparative by nature. If your worth increases less than someone similar, then it decreased.
It looks like this is the cited report: https://hired.com/state-of-salaries-2021
Interestingly, tech workers in cities that Hired designates as "Tier 2" (Boston, LA, Seattle, Toronto) now out-earn workers in "Tier 1" cities (London, NY, SFBA).
I wonder how much of this is distributional in general - i.e., if the driver is that more experienced talent has the leverage to demand remote work (or onsite work in non-HQ cities) and the ones stuck behind in NY/SFBA are increasingly those who aren't good enough and/or senior enough to do so.
I looked up the report because I was wondering if figures were inflation-adjusted, it doesn't say but my guess is that they're not. So real wages probably went down by ~4% in those areas, compared to a pre-COVID trend of, what, +5%/year or something in real terms? That's a pretty big swing - though again, this is all probably distributional and it's unlikely that any particular tech worker (let alone all of them) really took a direct pay cut instead of a pay increase. (Ok, I actually happen to have taken a pay cut recently, but I still don't think that's representative.)
Interestingly, tech workers in cities that Hired designates as "Tier 2" (Boston, LA, Seattle, Toronto) now out-earn workers in "Tier 1" cities (London, NY, SFBA).
I wonder how much of this is distributional in general - i.e., if the driver is that more experienced talent has the leverage to demand remote work (or onsite work in non-HQ cities) and the ones stuck behind in NY/SFBA are increasingly those who aren't good enough and/or senior enough to do so.
I looked up the report because I was wondering if figures were inflation-adjusted, it doesn't say but my guess is that they're not. So real wages probably went down by ~4% in those areas, compared to a pre-COVID trend of, what, +5%/year or something in real terms? That's a pretty big swing - though again, this is all probably distributional and it's unlikely that any particular tech worker (let alone all of them) really took a direct pay cut instead of a pay increase. (Ok, I actually happen to have taken a pay cut recently, but I still don't think that's representative.)
How is London in the same tier as NY and SFBA when it comes to tech salaries?
The charitable answer is that it's positioned similarly to NY/SFBA relative to the rest of their respective countries.
The answer I really believe is that Hired is a for-profit company, this report is content marketing, and it would be bad PR with respect to its London clients for it to put London in Tier 4 below the likes of Philly and the Twin Cities.
The answer I really believe is that Hired is a for-profit company, this report is content marketing, and it would be bad PR with respect to its London clients for it to put London in Tier 4 below the likes of Philly and the Twin Cities.
Right, it seems London at 101 and Toronto at 92 USD pull down the averages of both those groups significantly.
> "Tier 2" (Boston, LA, Seattle, Toronto)
> "Tier 1" cities (London, NY, SFBA).
This makes absolutely no sense.
> "Tier 1" cities (London, NY, SFBA).
This makes absolutely no sense.
Seattle has got to be the #2 tech hub in the country, tied only with NYC because of the latter's sheer population size. The home of Amazon, Microsoft, Tableau, Valve, Redfin, Zulily, Cray, etc. cannot possibly be second tier.
Nope, no sense at all. Similarly, DC is listed as Tier 3 despite higher salaries than Tier 2 Toronto and major investment from Amazon, Google, and other big tech firms.
Toronto tier 2 ? Haha
This data comes from hired, so I don't think it includes the higher end of the market like big N etc. Anecdotally I think the higher end of the market has gone up even more in the bay area and new york
Also anecdotally, I recently posted my resume on Hired and found that they had increased the duration of the "window" where they promoted your resume from 3 weeks (2 years ago) to 10 weeks. I also received interview requests at a far slower rate. This leads me to believe that usage by employers has gone down significantly on their platform, and consequently they may be getting fewer candidates as well. I'm not sure if they use their user base as the sample for their surveys, but if so, I wouldn't be shocked to discover that their data is lower-quality than it used to be
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Anecdotal: I lived in Austin back in 2015-2017, moved to the Bay and worked for 3 years, then moved back to Austin as soon as the pandemic let me go remote. Recently transferred officially to a team in Austin so I can stay here forever, my TC is 3.5x what it was when I worked here back in 2017.
I have one coworker who also did this. So this checks out with my small sample size.
I have one coworker who also did this. So this checks out with my small sample size.
I'm a native austinite who's lived on the east coast for nearly a decade (boston and now NYC). Salaries aren't that great in Austin in regards to companies that actually reside here. If you have a nice remote salary, sure Austin can look decent - but this year things got really expensive, to the point that the delta between NYC and Austin isn't that large for a 1br apt. Comparing a "city" like Austin to NYC is also a complete joke in terms of the values both culturally and networking wise they provide.
Where you live and work is about more than "average salary" it's about networking and where the money is. The money is without a doubt not really in austin.
Where you live and work is about more than "average salary" it's about networking and where the money is. The money is without a doubt not really in austin.
Wait til all of those San Diego and Austin folks get their salaries adjusted down and then let's talk.
Also there are a number of people that have temporarily left the bay area. They'll be back when the offices open back up and everyone is herded back into them.
Also there are a number of people that have temporarily left the bay area. They'll be back when the offices open back up and everyone is herded back into them.
I don’t think they will come back. There are too many remote friendly well paying opportunities.
The Bay Area is a pretty shitty place to live if you’re looking to start a family. A lot of people who have moved out can see the higher QoL… they won’t be coming back.
In fact I’ve seen even more people leave SF recently. It only makes sense if you’re single or DINKing; once children come into play it becomes very expensive.
The Bay Area is a pretty shitty place to live if you’re looking to start a family. A lot of people who have moved out can see the higher QoL… they won’t be coming back.
In fact I’ve seen even more people leave SF recently. It only makes sense if you’re single or DINKing; once children come into play it becomes very expensive.
There is no way total comp is falling in the Bay Area :)
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Remember these articles are people in tech jobs, not just employees of tech companies. People in corporates in tech jobs dont get RSUs.
Interesting, if supply shifts to to the latter. It might also be due to increased cost of living.
Weird to see Hired and Levels.fyi have such wildly different data. The latter just posted about huge salary growth across the board in Bay Area tech.
Hired doesn't account for total compensation, also assuming their data is somewhat limited from employer side.
Compensation has definitely been increasing overall within tech from our observations.
Compensation has definitely been increasing overall within tech from our observations.
Because the Hired data is nonsense that does not reflect total compensation.
Do you have a link for that levels.fyi post? I couldn't find it on their site.
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Umm, tech salaries are indeed not falling in SF Bay Area thank you very much.
Nice marketing strategy Bloomberg, but I’m still not going to pay for a subscription to read what’s already on levels.fyi
Is anyone else fed up with pay walled articles on hacker news?
Is anyone else fed up with pay walled articles on hacker news?
It's annoying at times, but...the discussion on HN is often much higher quality content than the article itself. And what is important (usually not much) in the article can (usually) be predicted from the headline.
Nobody dies wishing that they'd spent even more time reading mediocre content on the web.
Nobody dies wishing that they'd spent even more time reading mediocre content on the web.
Just use archive.is - https://archive.md/BenNg
I wonder how Hired's data compares to levels.fyi
As a tech worker in San Diego, life's good. I can see why salaries are increasing here. Lots of large companies (like Apple and Amazon) are opening up offices. Come join us.
https://www.amazon.jobs/en/search?base_query=&city=San%20Die...
https://www.amazon.jobs/en/search?base_query=&city=San%20Die...
You seem to work at Amazon. Not OK to hijack threads with hiring links.
With all the problems we hear from Amazon (overwork, pip, vested RSU schedule) I suspect that they are running low on where to get new folks.
I could believe it. They send an astonishing amount of cold emails. I'm a fine, not great programmer and I've got seven different emails from six different AMZN recruiters in the past month without ever having expressed an interest or responding. It's insane.
wow major crash. TBH seems like just noise.