Tech Salary Satisfaction
Overview
Our findings reveal another year of decline in salary satisfaction by tech workers. In 2022, 30% of tech professionals reported that they were either very dissatisfied or somewhat dissatisfied with their salaries. In 2023, that percentage increased to 35%. Considering the slowdown of salary growth, this is not surprising. Significantly more tech professionals (12%) reported that their salaries went down last year; In 2022, only 6% reported a decreased salary.
That said, we also noticed a connection between overall salary satisfaction, years of experience and age. Tech workers early in their career report the most dissatisfaction (43%), while only 31% of tech professionals with more than 15 years of experience reported dissatisfaction.
What’s behind that gap? Increased job security from skill-based expertise, increased benefits over time and more years climbing the career ladder are no doubt factors that contribute to increased satisfaction in more tenured tech talent. While businesses face challenges related to growth, revenue and competition, our findings support the notion that investment into the right benefits, including traditional ones such as healthcare and training, can be useful in attracting and maintaining skilled talent.
Unemployment and Layoffs
The massive spike in layoffs at the beginning of 2023 had a major impact on a sizable portion of tech professionals. Ten percent of our respondents were laid off themselves, and 25% are still worried about layoffs at their companies. Of those that were laid off, a portion of them (23%) took more than six months to find another job. For context, in the broader job market outside of tech, the U.S. Bureau of Labor Statistics reported that the average time it took to find a job after unemployment was 9.2 weeks in November 2023. As severance pay and termination bonuses remain an unregulated landscape in the U.S., there is no standard package tech professionals can expect to receive if they are laid off. With roughly three-quarters of laid off workers taking two months or more to find a new job, there is always a risk that a layoff will impact tech professionals’ personal finances.
How, if at all, have you been impacted by tech layoffs that have been in the news recently?
Job Seeking
The job insecurity and salary dissatisfaction that tech professionals face is likely to lead to more turnover in 2024 than in years past. Twenty-nine percent of employed respondents we surveyed are actively looking for a job, compared to only 8% who are not at all open to a new job. Unsurprisingly, there is a strong correlation between higher salaries and a decreased interest in leaving a current job. Tech professionals who are paid more are happier in their roles.
Ninety-three percent of tech professionals are either looking for a new job or willing to hear about a relevant new opportunity. This presents an excellent opportunity for recruiters looking to drive a competitive advantage by sourcing talented tech professionals. Chances are that the tech talent you reach out to will hear you out if you are carefully placing relevant job opportunities in front of them.
How satisfied are you with the compensation in your current or most recent position?
What would increase your engagement at work?
Salary Change
The slowing of average salary growth was certainly noticed by tech professionals. Just 55% of our respondents reported that they received a salary increase, down from 66% in 2022. When asked if they felt underpaid in comparison to others in their same occupation and skill level, 54% said that they do, compared to 49% in 2022. This is up significantly and helps identify why salary satisfaction is the lowest we have seen in recent years.
"Merit raise" was the reason cited most often for a salary increase at 41% of respondents, up 10 percentage points from 2022. Of those respondents, 61% are satisfied with their overall compensation. This is high compared to the overall compensation satisfaction across all tech professionals in our study (which was 49%).
Not surprisingly, salary increases from a change in employers led to the highest percentage of compensation satisfaction. Though only 15% of respondents attributed this as the reason for their salary increase (down from 24% in 2022), a strong 75% of them were satisfied with their overall salary. Tech professionals have a lot of negotiating power when starting a new role, so it is unsurprising that many managed to reach an agreement that aligned better with their expectations in 2023.
Switching jobs is not always going to result in positive salary growth, however, as our data shows that it is still the most common reason cited for a salary decrease. The second most common cause of a salary decrease is a layoff. The percentage of respondents who attribute salary decreases to layoffs increased substantially in 2023 to reach 14%, compared with 7% in 2022.
Income Change from One Year Ago
What is the main reason for your salary increase?
What is the main reason for your salary decrease?
Negotiation
While the percentage of tech professionals who negotiated their compensation in the process of joining a new company is similar to last year’s report at 49%, the share of tech professionals who negotiated their compensation at their current company increased. This indicates that, despite market uncertainty, and an assumed push toward frugality within many companies, tech talent still holds strong expectations regarding career and salary growth.
When paired with data that indicates the most satisfied tech professionals are in new roles at new companies, this finding is a reminder that it is important for HR teams to take these signs seriously and do what they can to retain their best talent. In our 2023 Tech Sentiment Report, we reported that 60% of tech professionals intend to seek new employment in the next year. In a market where the average salary growth has flattened and the cost of living is rising, skilled talent will be looking for an opportunity to take advantage of the pay bump that often comes with accepting a new position.