Tech salaries dropping, hardest hit groups identified.
Tech salaries dropping, hardest hit groups identified.
The Impact of Global Factors on Tech Salaries
In the fast-paced tech industry, change is the only constant. And the past three years have certainly been a whirlwind of transformative events. From a global pandemic to increasing inflation, and even the emergence of generative artificial intelligence (AI), these factors have left a lasting impact on various aspects of people’s lives, including their salaries.
The latest State of Tech Salaries Report by Hired provides valuable insights into the current state of the tech job market. Drawing on proprietary data and responses from over 1,300 tech professionals, the report offers a comprehensive analysis of salary trends in the industry.
Surprisingly, the report reveals a decline in both fully in-person and hybrid local U.S. tech roles, with salaries dropping by 3% over the past year, from $161,000 to $156,000. Adjusting for inflation, the data tells an even more staggering story. Local U.S. salaries have plummeted to their lowest point in the past five years, decreasing by 9%, from $141,000 to $129,000 from 2022 to mid-2023.
However, there is some hopeful news amid this gloomy picture. Hired’s data highlights a pattern that should ease the salary concerns of experienced tech professionals. The more experience one has in the industry, the less likely their salary is to decrease. This can be seen as a testament to the value of expertise and the demand for seasoned professionals in the tech market, despite the challenging environment.
One significant trend affecting salaries is the rise of generative AI. Combined with market conditions, this technology has forced leaders to make tough decisions about their workforce. As a result, junior talent, defined as professionals with less than four years of experience, experienced the most significant decrease in salary at nearly 5% year on year. Additionally, there has been a decline in the demand for junior staff, with the number of roles posted on Hired dropping from 45% in 2019 to 25% in the first half of 2023.
While these facts and figures may not initially seem promising for the tech industry, it is essential to consider the bigger picture. Despite the challenges, working in tech is still highly lucrative, with an average salary of $158,000. This rate is nearly double the average salary of other U.S. knowledge workers, which stands at $78,000 according to the U.S. Department of Labor.
Overall, the tech industry continues to offer exciting opportunities and financial rewards for professionals. Despite the recent decline in salaries, expertise and experience remains highly valued. As technology continues to evolve and shape our world, the demand for skilled tech talent is likely to remain strong.
Conclusion
The tech industry, like any other sector, is not immune to external factors that influence salaries. The tumultuous past three years have brought about significant changes, impacting tech professionals globally. However, the industry’s resilience shines through. While salaries have experienced a decline, the average compensation in tech far surpasses that of other knowledge workers, making it an appealing field for job seekers.
As technology continues to advance, the demand for skilled tech professionals will remain high. Experience and expertise are key factors in determining salary stability, with those who possess these qualities less likely to see decreases in their compensation. Whether navigating the challenges of the digital landscape or adapting to the rise of cutting-edge technologies like AI, the tech industry provides a vibrant and lucrative career path for those willing to embrace its dynamic nature.
