DO YOU KNOW THE SALARIES OF TECH EMPLOYEES?
DO YOU KNOW THE SALARIES OF TECH EMPLOYEES?
How much the Salaries of Tech Employees are is a question that many people find interesting and mysterious. Pay differences among tech firms reflect their difference in businesses and how the companies are run.
Now, JT1 will tell you a story of Jackie Luo – an Engineer at Square, previously Nylas and some of her thoughts about this matter.
She is a 3-years' experience software engineer, working at Square, a public tech company in San Francisco. she makes $130,000, plus $47,500 in stock, for a total of $177,500 per year. She didn’t negotiate her base salary at first, but she did negotiate her four-year initial stock grant from $150,000 to $190,000. She started her job on February 5. The current value of that grant is $412,390.02, which fluctuates by the day. She assumes that if the stock price stays the same until she vests her first year of stock, her “real” annual compensation will be $233,097.51.
The thought that strangers and peers may see what she earns and think she’s vastly overpaid, or they may decide she is underpaid terrifies her. Unsurprisingly, companies that wish to hire her in the future will see her previous salary and either anchor my potential pay at this level, limiting me from pay increases when switching jobs, or opt-out of interviewing me at all out of fear that she will be too expensive for them.
The question now is why she needs to share these numbers? Because you know, you need to concern more about how much you will get paid as fair compensation always starts with great transparency.
Today, countless identifiers such as gender, race, class play into systemic biases in the tech industry. A 2018 Hired report found that salaries of tech employees for men are offered higher pay than those for women with the same role in the same company 63% of the time. 54 % of women in tech have reported that they have salaries of tech employees lower than those of the other gender in the same role. But there’s good news that honest conversations about pay can close this gap. 66% of people who became aware of this disparity learned about it only when they talk to their co-workers about compensation.
Habitually, when people talk about salaries of tech employees, the ideal advice is “know your worth.” But how? This matter is almost locked in a black box for most tech employees, while the people on the highest rungs of the ladder hold all the information. Often, these people can access information about how much the market pays on average for any given role. Information asymmetry creates a power imbalance, and only the side with more power is able to make informed decisions about compensation or salaries of tech employees.
The typical scenario is you’ve interviewed with a company. And you did really well and are about to get an offer. As a result, the recruiter calls and asks you for a number. Here’s where you start to panic. What if your number’s too high? You don’t want the company to not give you an offer — you need a job and already went through the whole interview process, so you don’t want to risk this opportunity. What if it’s too low? You don’t want yourself to be underpaid, and the compensation you negotiate now before you take the job will determine your salary as a tech employee for years. What are other salaries of tech employees with similar qualifications? You’re totally shooting in the dark.
Even today, the issue of salaries of tech employees is still on the rise when women and understated minorities are commonly underpaid compared to their peers, and they don’t even realize it as they don’t have many points of comparison. We keep our salaries secret because we are afraid of being penalized for sharing them – judging.
Salaries of tech employees differ across the world. Here is an analysis:
Software engineers build all the websites and apps people use every day. Software engineering roles in the Bay Area often start at six figures of salary: $120,000, which is a typical base salary for a fresh computer science major, a standard set by some of the biggest public tech companies. That number might be lower at a small startup, but often it will be a six figures base. Early-stage startups pay the least, and the really mind-boggling compensation numbers begin to appear only at the biggest “startups,” like Uber, Lyft, and Airbnb.
Equity is a big differentiating factor between startups and public companies. Startup equity isn’t worth anything in the end, but at public companies, equity signifies a huge part of compensation. Base salaries rarely rise above $400,000 but stock can double or even triple an engineer’s overall compensation. And different from a salary, stock can grow dramatically in value. Hence, the real wealth in Silicon Valley is primarily generated through equity but not anything else.
Particularly, Facebook and Google pay the most aggressively for in-demand talent. In spite of a competitive market, if you hear about an engineer with total annual compensation of $750,000, that’s far from typical. Odds are they work at Facebook or Google and are one of a select few talented people in the world with the industry experience and expertise to do their jobs. The ideal fact is: They could get a job anywhere, in theory. The matter is that sometimes they can’t leave because no competitor could match their pay.
Frequently, people worried they could be fired and even judged for sharing salaries of tech employees. According to Glassdoor, the average engineer’s base salary is $137,000, with a plus of $11,000 which doesn’t include stock compensation.
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