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 this 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 over 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.
It’s also important to note that salary satisfaction among tech professionals outpaced their non-tech counterparts by a significant margin (49% vs. 34%). Despite the issues and challenges confronting them daily, many tech professionals clearly feel they’re earning what they deserve, which you can’t always say for those in non-tech roles.
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.
For tech professionals who want to prepare for a possible layoff, there are some straightforward steps you can take:
- Update your resume and professional online profiles regularly.
- Keep your networks up to date and network whenever you can.
- Have a rainy day fund ready.
- Always consider alternative industries when searching for jobs.
- Focus on up-skilling, particularly in cutting-edge areas such as AI. That will make you valuable to a variety of employers.
Layoffs can impact anyone, and even a little bit of preparation can help save you precious time if the worst happens.
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 a lot of turnover in 2024. Twenty-nine percent of those we surveyed are actively looking for a job, versus 8% who aren’t at all open to a new role.
Unsurprisingly, there is a strong correlation between higher salaries and a decreased interest in leaving a current job; for the nearly three-in-10 tech professionals looking for a new job, possessing the right skills could yield some opportunities to start a conversation with a recruiter or hiring manager. Those who are specialized could field offers from companies undergoing digital transformation or pushing into new areas such as AI, edge computing and more.
How satisfied are you with the compensation in your current or most recent position?
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% the year before. 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%).
Income Change from One Year Ago
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), 75% of them were satisfied with their overall salary. Tech professionals have a degree 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 last year to reach 14%, compared with 7% in 2022.
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 move toward frugality within many companies, tech talent still holds strong expectations regarding career and salary growth.
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. However, not all tech professionals realize they can effectively negotiate for what they want; we found that some 41% of those tech professionals with five years or less of experience negotiated their salary at a new employer, versus 52% of those with more than five years of experience.
If you’re new to tech, in other words, don’t be afraid to speak up. Here are some quick tips if you’re about to start negotiating with a new company (or even your current one, if you’re angling for a raise):
- Show your value: Explain how your current or proposed scope of work justifies a pay premium.
- Stay flexible: You may have to accept a lower salary number, depending on the company’s budget.
- Negotiate for more than money: In addition to a cash bump (or potentially in lieu of one), companies are often willing to discuss additional perks and benefits.
With those tips in mind, you can hopefully convince a manager that giving you a boost in salary and benefits is a win-win for everyone.