2017 Compensation Trends in Technology
By: Catherine Conlan
If you’ve hired for any technology positions in the past year, you may have faced some sticker shock. Technology compensation continues to rise both in the technology sector itself and for tech positions in other industries. And that growth is posing some challenges for employers.
“Given the low unemployment rate, wage pressures and the looming talent shortage, especially within the tech sector, it has become increasingly difficult to fill open positions in the industry,” says Mike Louer, the Chicago-based regional recruiting director for the central region for Randstad Technologies, an IT and tech staffing and recruiting provider. According to the Conference Board, salaries are expected to increase an average of 3% for jobs in tech in 2017.
Here’s what’s driving those numbers this year.
‘Smart Homes’ Require Smart Workers
Louer attributes advancements in technology as part of the reason for hiring growth in some tech areas.
“The tech field continues to experience a boom in technological breakthroughs and innovation. As such, demand for roles within the tech sector have increasingly grown,” he says.
In particular, demand has escalated for technology professionals such as big data engineers, who build and maintain large-scale databases for analytics use, and for full-stack developers, who help manage a company’s front-end and back-end technologies, says Louer.
He adds that “Internet of Things” architects, who develop applications and devices with internet connectivity such as for “smart homes,” also are seeing significant demand.
“I recall a prominent CEO of an insurance company stating about six years ago, ‘We are no longer an insurance company, we are a tech company,’ ” says Andrew Carges, vice president of global talent acquisition at GoDaddy, a web hosting company based in Scottsdale, Arizona. “It was around that time the tech job market really got interesting. More and more companies are embracing and leveraging technology, which has increased demand for tech employees.”
Silicon Valley Isn’t the Only Hot Spot
California is still leading the pack when it comes to paying for tech talent. “Los Angeles, now referred to as Silicon Beach, continues to have strong tech salaries,” says Marissa Peretz, founder and recruiting consultant for Silicon Beach Talent, a tech recruiting firm in Los Angeles.
“Other tech hubs such as San Francisco, Boston, New York City, Seattle and Austin also have a vibrant market for tech and are showing high demand and an increase in wages.”
Carges says the San Francisco area is still showing growth in tech salaries, with high sign-on bonuses and equity packages. But other regions are seeing growth in their tech sectors.
“A common thought is that the startups in Silicon Valley are sucking up all the tech talent. That’s not the case,” says Go Daddy’s Carges. He says GoDaddy alone has hired thousands of tech employees over the past four years in places such as Phoenix, Boston and Seattle.
Benefits Can Make the Difference
Employers who hire tech workers may need to sweeten the deal with other options that go beyond base pay.
“While most employers are raising salaries to attract the best technical talent, a lot are also offering additional compensation through profit-sharing bonuses, paid relocation or paid training and tuition reimbursement,” says Katy Imhoff, owner and CEO of Camden Kelly, a tech recruiting firm in Dallas. “These benefits add value to technical employees’ overall compensation and attract more qualified candidates than the slight upticks in salaries we're seeing.”
Other benefit options might include subsidized child care, meals, transportation allowances, personal services and other perks, Peretz says. In addition, growing companies may consider offering equity ownership for highly-skilled employees.