As companies scramble to adapt to a tight job market, they’re doing whatever they can to attract top tech talent. 2019 will require getting a head start in order to fill the most in demand roles.
Typical employees at major tech companies make more than people in other industries. Take a look at how the top tech companies compare to other industries in the Dow Jones Industrial Average. For instance: The median employee salary at Facebook, Alphabet, Netflix and Twitter is higher than at Exxon, Chevron, Goldman Sachs and Verizon, according to data required by the SEC for the first time this year and collected by Equilar, a research firm that tracks data on executives.
The median salary at major tech companies is also closer in pay to the CEOs at these companies relative to other industries. CEOs at Facebook, Salesforce, Tesla, Square, Google and Twitter all made less than 40 times the salary of their employees at the median. But across all industries, CEOs made 68 times their company’s median employee salary. Tech companies have to be willing to give a little up front in order to get a lot in the long run.
U.S. salary budgets are projected to rise by an average of 3.2 percent in 2019, up from an actual year-over-year increase of 3.1 percent for 2018, according to the WorldatWork 2018-2019 Salary Budget Survey. In the case of top tech talent, the increase may look even higher compared to those working in other industries.
Why is this the case? Companies like Google for example truly value the work of their engineers and programmers. They make the company work from the inside out and are compensated incredibly well for their work. The average workday for a tech engineer is anywhere from 8-12 hours a day and the work is constant. In addition, programmers have to adapt to new technology every couple of years to keep up with the latest trends in their industry.
Not everyone is cut out for these types of high-pressure jobs, where you’re forced to be “constantly thinking” during the work day and long after it’s over. But that’s why these positions offer such high salaries: Programming and engineering requires constant vigilance and adaptation, and the things you create have a major impact on people.
We’ve compiled data across all positions we’ve seen offers for the last 3 years. Note that these are average figures of senior team members in the tech industry across all departments. These numbers don’t include compensation figures from new hires or executive team members.
Average Compensation Figures
2017: Base: $160,000, Bonus/Sign on Bonus: $30,000, Equity: $50,000
2018: Base: $185,000, Bonus/Sign on Bonus: $45,000, Equity: $75,000
2019: Base: $173,000 * Bonus/Sign on Bonus: $50,000, Equity: $205,000 *
*The trends for 2019 are inconclusive given the smaller sample size. However, we have noticed a sharp upward trend in equity compensation packages across all offers. I will update this article over the next couple of months as we collect more data.
Takeaways
- Companies are finding more creative ways to incentivize candidates. Such as aggressive equity packages, sign on bonuses, relocation bonuses, flexible work schedule, work from home days and housing allowance.
- Candidates continue to hold leverage over companies with the average number of total offers per candidate at 3 in 2019.
- Cash compensation continues trending upward as more positions have compaction in base salary numbers. For example, Technical Recruiters make 5% less on average in base salary than a Software Engineer. However, Software Engineers make 50% more in equity annually.
- Candidates who don’t negotiate their offer make on average 20% less than their peers.
- Sign on bonuses weren’t given in over 90% of offers. Candidates that request a sign on bonus with a specific reason as to why received a sign on bonus over 90% of the time.
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