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2016 Salary Trends in Technology

2016 Salary Trends in Technology

By: Catherine Conlan

Compared with competitive salary trends in finance, healthcare and transportation, no industry can hold a candle to tech hiring, says Katie Bardaro, vice president of data analytics at PayScale

When it comes to IT jobs, “they’re hiring like crazy and wages are rising like crazy,” says Bardaro. And it’s not just at tech firms — any business that wants to recruit tech talent and hire for IT jobs is facing strong wage pressure.

While that may sound daunting for many employers, there is some good news. Recruiting experts expect salary growth to remain hot, but it may actually slow slightly in 2016. 

Jonas Johnson, senior researcher at the Economic Research Institute, says his organization’s salary expectation found that tech employers expect salaries to rise 3.2 percent compared to 2.9 percent over the past year.

Here are the factors that will most impact salary trends in technology in the year ahead. 

Competition for Tech Talent
With everyone hiring for technology skills, there’s simply a much larger demand than there is for the current supply. And it’s not just tech companies that are facing a crunch; all tech skills are in demand across all industries.

“It’s the key thing we talk to employers about,” Bardaro says. “Even if you’re not a tech firm, if you’re hiring tech workers, you’re going to be facing competition from those firms for candidates. The key is understanding the market and competition for the industry you’re in.”

William Uranga, director of technical and corporate recruiting for GoDaddy, says employers that are facing higher salary pressures because of a tight market can offer other benefits to qualified candidates. 

“With more demand than supply for tech talent, we’ve learned salary is important, but a company has to have more than a great financial package,” he says. “Employers have to offer a open culture where women and men can thrive and where employees can make a difference, where they are recognized, promoted and part of a team.”

Job Location: Go Where IT Talent Lives
Job location is a big variable in successfully hiring tech workers, Uranga says. 

While GoDaddy is still headquartered in Scottsdale, Arizona, it has 14 offices around the world, including in technology hotspots such as Cambridge, MA, as well as Los Angeles and San Francisco. 

“We adjust our base pay depending on the cost of living in a given location. In fact, we took the approach a couple years ago of going where the talent is.” The company established a growing office in Kirkland, near Seattle, because it was such a strong center of tech talent.

Evaluating Tech Skills
Tech experience is another key factor when evaluating a candidate, Uranga says, but it can mean more than just the number of years in the industry. 

“We look at the ‘what’ and the ‘how’ that come with a candidate’s experience,” he says. 

In other words, looking at candidates’ focus, discipline or soft skills — and how they go about getting good results — often matters more than years of service.