Wages for software engineers are rising faster outside Silicon Valley than within it as employers expand tech operations in other cities and battle to outbid rivals for local tech talent.
The average salaries for top software engineers in the San Francisco Bay Area ranged from $155,000 to $165,000 last year, up 6% on average from 2018, according to a report by Hired.com, an online marketplace for information-technology recruiters.
Software engineers in London were paid, on average, £71,000 to £82,000 ($92,000 to $106,000) in 2019, up 13% from 2018.
In Toronto, workers in these roles earned C$104,000 to C$116,000 (US$78,000 to US$88,000) last year, while in New York, they brought in between $127,000 and $145,000. Both ranges were up 7% from 2018.
Software engineers account for roughly 70% of IT job candidates on Hired.com, the company said. The results are based on an analysis of more than 400,000 salary offers posted on Hired.com over the past year by roughly 10,000 employers world-wide, the company said. Job seekers on Hired, rather than responding to specific job ads, post résumés to a general page for employers, which then reach out to potential hires with salary offers.
Wages for all tech occupations in the Bay Area have plateaued after years of growth, said
chief executive of tech recruiting firm Heller Search Associates.
“Cities like Austin, Toronto and Boston are now coming into their own, attracting technology companies and their talent needs,” Ms. Heller said. Across the board, costs for high-demand workers are also being lifted by a tight technology labor market, enabling sought-after workers to “significantly drive up their compensation,” she said.
Rising IT salaries in emerging tech hubs come as many tech-sector firms expand beyond Silicon Valley, setting up offices, data centers and other facilities across the country.
Twitter Inc. Chief Executive
said in an earnings call last week that the company plans to focus on recruiting workers outside the Bay Area, adding that limiting efforts to San Francisco is “not serving us any longer.”
Google announced plans to open new offices and data centers in Nebraska, Nevada, and Oklahoma, while expanding offices in Austin and Chicago.
Toronto, meanwhile, has developed into a center for emerging technologies such as artificial intelligence, quantum computing and other specialty fields that command higher salaries.
At the same time, nontech companies are relying more heavily on technology for daily operations, said
Hired.com’s chief executive. They include companies like Boston-based online furniture seller
which has more than 10,000 employees, Mr. Patel said.
“Every company is now a tech company and requires engineering talent to reach their next business milestone, which has created an imbalance in supply and demand for tech talent,” Mr. Patel said.
Innovative businesses tend to draw talent to less-known areas with the promise of hands-on experience with cutting-edge tech, said
a district president of staffing firm
But after a period of rapid growth, wages taper off, he said.
The number of IT job postings by U.S. companies increased by 52,090 last month over December, pushing the total number of unfilled tech positions above 350,000, according to IT trade group CompTIA. Demand was highest for software developers, IT user support specialists, systems engineers and architects, systems analysts and IT project managers, the group said.
In a separate survey of nearly 2,000 tech job candidates on Hired.com, 60% said they planned to leave their current city within the next five years, the company said.
Write to Angus Loten at [email protected]
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