

The War for Software Talent in Silicon Valley Drives Salaries to Record Highs - gregosaur
http://m.jobspringpartners.com/blog/posts/2013/03/04/the-war-for-software-talent-in-silicon-valley-drives-salaries-to-record-highs

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humanrebar
The article implies that bidding wars and expectations are driving salary
growth, but how about an alternate hypothesis?

I'm curious how much the escalating cost of housing is driving Silicon Valley
base salary growth.

If I were in Silicon Valley making $130k base, I would be very interested to
hear about $100k base jobs in lower cost of living areas. In areas like the
sun belt, cost of living can be 40-50% lower than in the Bay Area, especially
when you compare apples-to-apples for housing (i.e., a 3 bed, 2 bath in both
markets).

Silicon Valley employers are competing with startups in San Antonio as much as
startups in the Bay Area and the rest of the Pacific Northwest.

~~~
Iftheshoefits
I recently moved to the Valley from elsewhere. There are two key differences
between "other places" I've experienced (Minneapolis/St. Paul, certain areas
of Florida, Colorado, and Texas) and the Silicon Valley: employment
availability and quality of life.

I'll just say this: a true "apples-to-apples" comparison can't be restricted
to, e.g. the cost of a 3/2 in each market. The availability and quality of
public services (parks, schools, government offices, etc.) and, for me,
exposure to a variety of cultures, is a huge factor. Additionally there is
consideration for the availability of work. My experience is that there simply
isn't the wide availability of jobs elsewhere as in the Valley, even in places
that are "hot" in the start-up scene, and for the most part they are more
"enterprise-y" in nature (i.e. software developers belong in the IT
department, are cost centers, and should be considered as fungible as our call
center staff). Given the relatively disloyal, and even antagonistic view
companies take towards employees I consider that last one to be a huge factor.

I will consider moving out of the Valley for a lower salary, when those places
with lower salaries have: a) much higher job variety with more tech/software
centric companies; b) much better public services and facilities.

~~~
prostoalex
Check out Southern California. I've recently moved down from Bay Area (cashed
out on rising real estate prices, which makes my previous years of living
there rent-free), and there's a good mix of technology companies competing for
talent with Bay Area outfits, so reasonably similar salary/equity ranges, with
much better array of public services (decent parks with playgrounds, roads
that are actually paved, number of people defecating on city streets close to
zero, etc.)

The drawback is car-centric culture. I hate driving, but didn't realize how
much I hate it, until I moved down here.

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gavanwoolery
He sites $165k average for senior engineers (which seems accurate), but its
important to note the higher salaries as well - I have friends at Google who
are making over $300k. In terms of the worth of a software engineer, the
former company I worked at used to bill $150/hour (roughly equivalent to
$300k/year salary) in the mobile space. I think that this is more likely a
trend though - I don't see it being that sustainable but who knows.

~~~
eliben
Aren't you conflating base with total comp here? $150/hour consulting is $300K
at 2,000 hours / year. But if that's $300K _base_ for your friends, then the
total is likely way above $500K (bonuses, stocks...) He did say _base_ $165K
on average though, which sounds too high, TBH. Surely total comp average can
be above that, but base?

~~~
vonmoltke
This concept is something I cannot even fathom. My base salary has never been
less than 95% of my total compensation. How common is this?

~~~
fitandfunction
Pretty common. At mid levels (senior manager, director), base is ~50% of
total. At senior levels (VP, CxO), base is less than 25%. At the extreme (CEOs
of major corps), base is negligible (e.g. Costello's base is $14k out of a
total of ~$8.7 mm).

~~~
vonmoltke
I need to change my calculus then. Thanks.

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bicknergseng
I'd like to point out that they are a recruiting firm that just commented out
their call to action at the bottom.

This is an advertisement.

~~~
donretag
Two things: 1) The article is from March. If they are shilling, they are not
doing a good job. 2) The article is the mobile version. The call to action is
probably visible on their main site.

~~~
dmix
It's not on their full site [1] (as of right now).

But either way, there's nothing wrong with "content marketing" as long as the
content is sufficient quality and not spammy. Wanting to build a business and
making money is not a evil dark pattern.

It's one of the few ways to market that adds value, rather than simply
promotes. But of course there are those who exploit it evilly.

[http://www.jobspringpartners.com/blog/posts/2013/3/4/the-
war...](http://www.jobspringpartners.com/blog/posts/2013/3/4/the-war-for-
software-talent-in-silicon-valley-drives-salaries-to-record-highs)

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j_baker
I see the author giving zero evidence to support his claims. Well, apart from
anecdotes about how people are getting hired at higher salaries (which is most
likely hiring propaganda).

~~~
cbr
The author is a recruiter, with all that entails, but it does at least mean
they know what salaries people are getting.

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spoiledtechie
I am 29 years old. I command a salary just under his 2007 numbers as a senior
engineer. Yet, I am not a senior engineer nor do I live in SV. I live in the
DC area and I have an expected goal, by the time I am 35, I will either be
making 180k or will own a profitable startup. By that time, I will consider my
self senior. But I will also have another 30 solid years of development in
front of me. Which could in fact drive the price up much higher.

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rayiner
For people complaining about engineer salaries: the median "fresh out of
B-school" offer in the Bay area seems to be $125k base + $20k signing bonus +
substantial bonus target.

~~~
USNetizen
Hence the reason cost of living is through the roof and the valley is becoming
known more and more as just an echo chamber. Silicon Valley bends the laws of
economic reality, but it won't last forever.

~~~
michaelochurch
Right, but the $125k software engineers are worth 2-10x if given appropriate
work (and 0x if not).

The MBAs tend to make that 2-10x capture less likely...

... and, as you noted, drive up the cost of living.

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cgh
I realise this article is from a recruiter and grains of salt etc., but if
these salaries are accurate because of limited supply in the SV area, then I
really hope this further opens the way to remote working, particularly from
other parts of the US and Canada. I suspect there is a largely untapped pool
of senior-ish people out there that would be fine to work with remotely. The
tools are getting pretty good although I freely admit there is still some ways
to go.

Granted, face-to-face is still necessary sometimes. I fly down to SF once a
quarter to meet with my long-term client. They get a break on salary and I get
to work at home so everyone's a winner.

~~~
prostoalex
You can actually filter by remote jobs on
[https://angel.co/jobs](https://angel.co/jobs) and the number is already
significant.

Some companies build their culture around team's physical proximity and rapid
iteration and communication flow that you get from that, but non-tech startups
are usually pretty happy hiring someone to do Rails or iOS or other non-core
function for them.

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staunch
I think a part of the surprise is due to a lack of consideration for
inflation. According to the BLS $120k in 2003 is ~$152k in 2013.

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asc123
They are just trying to advertise their site...they are recruiters. not good
ones in fact. I've worked with them before. They don't give a sh*t about the
people just their wallets.

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GBKS
I'm very curious if this will lead to companies opening offices in other parts
of the country - after all you might get two engineers for the same price
you'd get one in SF.

~~~
humanrebar
Along the same lines, it's worth remembering that Bay Area companies aren't
just competing with other Bay Area employers, they are also competing with
equivalent jobs in areas with lower costs of living.

That means that Bay Area compensation packages need to keep ahead of the
explosive growth of the cost of living in the Bay Area in order to stay
competitive with an equivalent company in Denver or Houston.

In particular, I'm curious how much the cost of housing is driving growth in
base salaries for Bay Area technologists.

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padobson
What this tells me is that if you've reached a six figure salary point, it's
time to branch out if you want your income to continue to grow.

If you were entry level at $70k, and now you're making $140k as a senior
engineer, you're going to have to either do a start-up or add a new,
significant skill to your resume if you want to double up again, because
you've peaked as "just a developer".

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bcbrown
> Right now top engineering talent is getting 165k and above. With some
> C-Level executives and lower-management in the same range it can make things
> challenging from an internal-equity standpoint. Do companies stick to their
> guns and lose out on candidates or do they look to adjust their entire
> structure?

It would be interesting if companies become willing to give top engineers a
higher compensation than management.

~~~
michaelochurch
_It would be interesting if companies become willing to give top engineers a
higher compensation than management._

That irrationality is why there are so many consultants.

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paultannenbaum
These guys are a recruiting firm, so its in their interest to pump up the
numbers. Here is a quora thread I used when I was trying to figure out my
current market worth: [http://www.quora.com/Salary-Comparisons/Silicon-Valley-
Salar...](http://www.quora.com/Salary-Comparisons/Silicon-Valley-Salaries-
What-are-the-details-of-your-compensation-package)

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mmagin
I wish people would stop being impressed by "bigger and bigger numbers" over
time for anything denominated in money that is undergoing inflation.

~~~
MagicWishMonkey
You might have a point if you want to draw attention to the fact that $150k in
San Fran is equivalent to $80k in other areas, but bringing up inflation (at a
time when inflation is stable and relatively low) makes you sound like a
goofball.

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lolwutf
I can't use this site on principle. A f*cking mobile-centric web design that
geometrically scales up the exact same way, for desktop? Arrgghghhhhhh.

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altoz
I's like to point out that this article is from March.

