It’s funny to see this site gather so many upvotes while the server is down. I think by now everyone knows very well that software engineering salaries are higher in the United States.
If the shift toward remote work really comes to fruition,
I fully expect EU software salaries to rise. I’ve hired a lot of excellent remote developers in European countries. The trick is to pay them American-level wages, which are often substantially higher than what they could get locally. When you’re paying that much, you basically have the pick of the best developers you can find. Not only that, but they’re extremely grateful for the opportunity.
The obvious downside is the time zone difference, so this only really works once you’re large enough to have a whole remote team and someone able to manage them in their time
zone.
This is also why I don’t believe the rise of remote work (if it actually happens) will be as good for US workers in major cities as they want to believe. There is a lot of underpaid, highly qualified talent on the international remote market.
Silicon Valley engineers are for the most part arrogant, they sound like factory workers who said Chinese manufacturing would never displace their jobs and "made in America".
Companies have shown again and again they are willing to sacrifice quality if it increases profit. In this case I'm not even sure quality will be sacrificed in most cases because as you said there are tons of great engineers available
Not sure about SF arrogance but the whole “Your job is going to get outsourced to India don’t get into IT/Software Dev” thing has been around since the 90s. It’s 20 years later and the job market is better than ever, salaries are better than ever, and a lot of companies who fully embraced the IT outsourcing trend are realizing it actually hurt them in the long run. Short term it helped but now they have lost their market place edge they once had. Also worked with a company who outsourced all their call centers to Eastern Europe from Scotland and other Northern European countries, their customers hated it.
Not against outsourcing it’s gotta be a mixed bag. You’ll be extremely slow if you have to wait until tomorrow to get any answers.
If you know what you are doing by building an organic team in a foreign country, you can still get real bang for the buck. If you try the traditional outsourcing model by offloading shit to a 3rd party, you will get hurt.
Managers who know what they are doing are typically a lot more expensive than software engineers who know what they are doing. So the only reasonable way to outsource software engineering is to also outsource the corresponding management, and management don't want to do that.
Agreed. There’s no way you can get away with not having a global team unless you’re a small company operating in a small market.
The company I work for now has a team in India and the difference in skills is night and day compared to my last job. The turnover is much much less as well. I suspect they pay better and don’t rely on scummy 3rd party “coach you to pass the interview but have no real experience” providers.
Outsourcing to India didn't work very well due to cultural differences.
Communication was very hard, even when language wasn't a problem.
People afraid to say they didn't understand something and trying to wing it with tragicomical results. People not raising issues until after something exploded not to offend you.
I think outsourcing to Russia has some good potential but the level of English is still nowhere close, even in the new generations.
Eastern Europe is more promising but English is a bit hit or miss. I see plenty of outsourcing to Eastern Europe from the UK.
Similarly, I see more and more outsourcing to Latin America from the states.
Europe is much closer to the States: if you outsource to the UK or Northern-mid Europe you get English speaking people who will act similarly to US employees. Sure you won't save 11/12 like in India but you will save a good half compared to SF, with the only hassle being the timezone.
distributed working is a totally different thing than outsourcing. We are talking about companies having more options for their mode/base of operation and talents. We are not talking about corporates sacrifying quality control by adding layers of managerment in other countries in an attempt to abstract away the development process.
I'm from Europe, I've worked for several SF based companies (some hired, some through acquisitions) and can confirm that , despite there are some really, really smart people there are also a lot of people that have no clue what they're talking about, as in most places you have a mix of it. But almost all of them are incredibly arrogant and most have an incredible tendency to take decisions based on what's important for their CV and there career and their podcast and their YouTube channel than for what the company or the problem at hands needs. I'm not sure I'm taking again a job for a west coast based company.
Also Americans don’t realize the scale of transformation that is going on in places like India and China. As far as making consumer web apps goes India is increasingly the place where unicorns emerge every week and some companies operate at very large scales.
Thanks to the internet knowledge is spreading quickly and remote work is a booster.
The gap in terms of knowledge and networks is closing with places abroad.
And then the managers that cut cost jump up or over the ladder out of the department, and the next person deals with the smoking wreck of the situation, and they insource everything again. Then two years later, the cycle repeats.
The counterpart of this is that initially, the outsourcing group brings their A-team to bear, in order to win the deal. Those folks are generally as good as the people that they replaced. Six months later, those top operators are shifted to the next deal, and the C-team takes over, and then churn and attrition reduces it to a D or F team in short order.
This isn’t a zero-sum game where 1 remote job gained equals 1 local job lost, though. Demand for good engineers still exceeds the available supply, in my experience.
Rather, I see remote work as a sort of leveling of the playing field. As the location advantage is diminished when it comes to compensation, the pressure starts to gently push everyone’s comp toward the median. Highly paid people might see some downward pressure but the underpaid people will start to see some upward pressure.
Silicon Valley jobs aren’t going away, though. In-person will always be in demand.
I worked for a couple of months from Cyprus with a team that stretched from Pacific to Eastern time. For one project where I was able to build features on my own with minimal coordination it was great. For two other projects it sucked. If the team isn't really used to async collaboration (you know, detailed pull requests, existing documentation, etc) it just doesn't work well.
I'm not worried about my North American salary getting scooped from Europe. I think there are many factors that go into why there is such a salary difference in the first place anyway. For example, engineering in Germany is much more prized than in Canada so many of the technically gifted Canadians go into software instead. Anyone can read the situation of their local region and sort of self-select into the better professions locally, which makes a bit of a feedback loop.
As a counterpoint, software engineering saleries will fall. There isn't a shortage of clever people, it is a desk job, very low stakes and lots of opportunities. Lots of people want in on this.
I'd guess the actual reason that US software developers make more is that it is easier to make lots of money in the US generally, so the profitable companies go there & then the developers make excellent wages due to geographic effects.
Yes, we have tons of people who can code at a proficient level in one language. However, don't underestimate the difficulty of software engineering. The people who we need to build our applications are getting really hard to find and especially keep around.
Sure I can get someone who will code a basic Spring Boot application in a pinch. But do they have the excellent communication skills, knowledge of build systems, cloud knowledge, understanding of TCP and SSL, HTTP protocol, forwarding and reverse proxies, containerization, unit testing, and version control just to start. This isn't mentioning secure design and the hundreds of other small things they will need to learn and understand.
Then they have to be willing to get up to speed on new libraries and be able to read and understand software. Will they be able to set up remote configuration for our swarm? Will they be able to do the research if they don't know something? Do they have a firm base of computer science knowledge to make that learning stick?
It seems like it would be more value efficient to train a person making 40k a year how to do that then pay someone hundreds of grand a year who already knows how to do it.
The problem occurs when, after training that 40k a year developer, they BECOME a 100k a year developer. Unless you can lock them in with an amoral non-compete or some other form of illegal method, they will find out that they are worth that much and leave for someone who will pay them.
I thought so too but unfortunately it would take someone making 100k a year somewhere between 6 and 12 months to teach someone making 40k to do the job properly. Then that someone would get a job offer making 100k and quit.
This information seems like it would be of interest to the board of directors at companies paying hundreds of thousands of dollars per year to employees.
I assumed that they would have hired management that takes labor costs into account.
in this post pandemic world, now that companies have set themselves up for remote work.... why would they hire someone in the US when they could hire someone cheaper in another country?
The point of my comment was to sarcastically point out there there are very qualified people sitting in decision making positions with an incentive to lower labor costs.
It is possible they are making a mistake and completely missing a great money saving opportunity, but I would not bet on it.
There very well could be new opportunities for labor arbitrage that can be taken advantage of by many businesses, and if so, it will be evidenced by the success of companies that take advantage of it. But it might take some time.
But it is not a new idea, and is certainly one that has already been tried, and so if certain companies are not taking advantage of lower labor costs elsewhere, then it is prudent to assume there is a good reason.
My point is that the same people are also averse to risk. So now that covid essentially forced these companies to outfit and train their teams for remote and build a culture around remote work.. and they found it successful... Pandora's box may have finally been opened on outsourcing.
We live in a different world than a few years ago.
I hope I'm wrong because I'm benefiting from geographical effects and I have no delusions that I'm smarter than almost 6 billion people.
I can see that could be true, and communications technology and bandwidth has improved, so perhaps the situation has changed. I would expect it to take years to manifest though, maybe even a decade or more.
People have been saying this for 40 years and we have seen time and time again, as engineering gets “easier” by 1 click it makes each individual engineer 5x more effective, but it only expands the total pool of people available to do the work by 20%. The effect that dominates is that by making work more efficient/productive, there are many many more places where engineers can be a net value add to business metrics. It’s a textbook case of jevons paradox applied to labor markets.
Jevons' paradox applies to efficiency, not massive increases in the amount of supply. There isn't really an argument that foreign workers are more efficient than local workers (unless they are being paid less!).
You didn't recognize that there are plenty of European developers capable and willing to work on the US time zones. I presently split my life 50/50 between Toronto/Netherlands so I live half my life on Eastern Time and the other half on CET. I fly on weekends so I'm available during the week and when I'm in the Netherlands I fit work into my daily life at the time clients need me to fit in. Some days it can be tiresome, having to work until 11pm, but other days if I have a light work load with standup at 3:45pm CET, some days that's my only meeting and I can pretty much work when I like. It works out well.
This is also why I don’t believe the rise of remote work (if it actually happens) will be as good for US workers
Beyond just time zone issues, there are substantial legal, cultural, language and other issues that will prevent this from happening on a wide and sustainable scale.
I have worked with many companies that tried this and failed spectacularly. Examples of problems encountered:
1. Having to explain every little thing that people of the same culture intrinsically know
2. Being slapped with regulations that nobody in the U.S. has even heard of
3. Cultural differences surrounding vacation / other time off
4. Overseas contractors literally copying the company and using their data and using the software they were hired to write to compete against them. I spent four days as an expert witness in a U.S. Federal court case over this one.
I concur, my experience too. Cultural differences is a big one. Both for the finished product, and with regards to organisation costs which are often invisible, just felt and never accounted for with numbers.
I'm less familiar with 4. But seen many cases of data leaks. It's very challenging to figure out the purpose, competing is only one.
Obviously there are exceptions and not every EU dev is paid less than every US dev. The point is that there are large numbers of developers across the EU who can stand to gain a lot by working remotely for US wages. Not every last one of them, but many. Switzerland is only 2% of the EU’s population.
Part of the draw of hiring remote is that you don’t have to pay Bay Area salaries.
I wasn’t referring to Bay Area salaries. I was referring to normal US developer salaries, which are still higher than common EU salaries.
My comment was about general hiring, not the outlier edge cases. If you want to pay Bay Area salaries you can obviously compete on compensation with just about anyone, anywhere with very few exceptions.
The draw of hiring remote is that you will get access to great engineers that would otherwise never want to move to the Bay Area. You get to compete for their talent if you're offering full remote, but so do other companies that pay "Bay Area salaries".
I think it's great for software engineers everywhere, but not great for the Bay Area itself since the incentive to move there becomes lower (salary is not the only reason people move to the Bay Area, but it's definitely a big pull). Although if you live there that means less pressure on real estate ;)
Taxes are a bit complicated in Switzerland. While they are nominally low, you pay separately for things that are covered by taxes in most other countries. One example would be health insurance.
So while you'll definitely be paying less if you don't have dependents, if you have kids and are earning "normal" money (e.g. 50-100k CHF gross/year), your total tax-like expenses would be similar to most of the Western world.
But marginal taxes *are* way lower than most other countries. E.g. if you're earning 200k CHF gross/year, your marginal tax rate (in Zurich) would be something like 23%.
For a more meaningful view of the Swiss market (there's almost only Google on this site for Switzerland), I would have a look at https://swissdevjobs.ch/. There's not a lot above 150k.
I work in a unicorn company based in California Bay Area that has dev teams in Europe (Netherlands, Lithuania), India and Brazil (probably other locations as well). IME, this is how it works: we pay higher than local salaries, but they're not as high compared to Bay Area (think location-based salary adjustments). This doesn't really put meaningful upward pressure on average companies to catch up because salaries are often tied to what they're able to pay based on what market they serve (local city vs Europe vs global).
My understanding is that with Bay Area salaries come Bay Area interview bars, and that this bar is very high compared to your local dev shop. Not many can pass these interviews (the failure rate is high even in Bay Area). IIRC from my interviewer stats, the vast majority of candidates didn't even get through the screener round and less than a fifth were offered positions (I have in the range of 100s of interviews under my belt). And we only recruit fluent english-speaking candidates, which shrinks the pool significantly.
Timezone differences are a big deal, even if the employees in far-away timezones form full-on teams. Communication is slow and inconvenient, and sync meetings at 9PM/7AM get old pretty fast. Typically there must be some sort of clear cut advantage to outsourcing that offsets the timezone issue (e.g. my understanding is that our India team is there because network conditions there are impossible to replicate in US and reliability despite wild variations in coverage is important for us).
And if you think being highly qualified is a high importance criteria, consider that in our Covid-related round of layoffs, a number of european teams got sacked. And these folks were no slackers, they're seriously some of the brightest folks I've seen.
In short, high pay European jobs do exist, but they're not common, they are hard to land and they are hard to keep.
> It’s funny to see this site gather so many upvotes while the server is down. I think by now everyone knows very well that software engineering salaries are higher in the United States.
And this fact that the site is down PERFECTLY highlights the [insert derogatory adjective here] of some development and design mindsets floating around in SV. Rather than having some content laoded by an HTTP server, we send over a javascript framework that then PULLS the content and lays it out, and we show a LOADING SCREEN in the meantime. It's using the web server and browser to completely reinvent the webserver and browser, for no gain and an inarguably worse user experience.
The fact that part of the throbber image is the "object not found" placeholder from browsers is so perfect for the site that the irony is absolutely self-recursive.
On a macro scale this is happening in every field in America.
Any knowledge worker job that doesn't need to be done in person can be outsourced to the billions of people in the rest of the world. Radiologist, Accounting, Law, Animation, etc.
What is the value of a U.S. Hacker News moderator in the valley, for example, over a smart Croatian or Latin American person who will work for a fraction of the price?
Many peoples advantage is geography and connections, not talent or skill, which there is no shortage of amongst billions of people.
The ultimate result in my opinion, when no job is safe from outsourcing, is going to be the decline of wages and the middle class in America.
> I’ve hired a lot of excellent remote developers in European countries. The trick is to pay them American-level wages, which are often substantially higher than what they could get locally.
Are there any websites that specifically cater to advertising these kinds of positions?
As someone in London currently working at a FAANG it's becoming clear that the only way I can hope even to match my current salary is to A) get hired by another FAANG or B) get hired remotely by a US-based company.
If there is an option C) that I haven't thought about, please do share :)
If you are expecting to get the same total comp as you currently do with with RSUs then your only option in London is fintech or a hft/quant firm. I have received offers from companies in the city that net out to £350k+ as well as a small equity upside, but even at a FAANG your best bet for good comp was to join them in the US and then get transferred to the UK office. It is also worth noting that while the price trajectory for most of these RSU shares has been sharply up in the past decade it can easily plateau or even trend down.
If you really are interested in planning your post-FAANG path with an eye towards the total comp I would suggest networking into fintechs. The better dev jobs are not always advertised, so who you know can help get you in the door before the job is ever posted.
I'm not really expecting it. I'm actually not sure what to expect. I'm still very early in my career, I've been very lucky to graduate with a position at a FAANG but now am feeling like there is nowhere for me to go but down comp-wise. Traditionally I have heard from family and friends that accepting anything short of a raise when switching roles is a loss, in fact I have heard and read many times that switching companies is the best way to get a raise in the software industry. Is it typical for engineers switching from FAANG to non-FAANG to take a significant pay cut? (~50%)
As for fintech, I have had an internship that has put me off them. But maybe it was just a bad place and I shouldn't write them off completely.
On the other hand, I'm based in Europe and if I decide to work remotely for a company in the US I will want a significant raise just to offset the extra costs and risks.
Plenty of specialities are shipped to Eastern Europe. Ukraine being a well appreciated destination due to general grasp of English among young population, and hard working good engineers. Like the specialities we see delocolised to India, php ecommerce dev/customisation is one. And the whole enterprise j2ee kind of stuff, platform development. And also mobile dev has become popularly outsourced to Ukraine.
The software industry is seeing the same thing as what happened to factory industries. First the specialities that are least challenging to manage offshore, then eating the rest of the profession, leaving some niche I suppose like we still produce certain type of clothes, furniture and electronics in the well developed countries.
I've lived in several countries where outsourcing is common, it's always the same schema. Flocks of non very competent wanna be tech riches launch businesses of hiring cheaper labour with the promise to deliver quality projects. In the end it's a mess of a code base, but client see the bill as more digestive than hiring a team of people with all the tax and high social benefits to pay without any guarantee that anything will work in the end.
I don't know how the outsourcing hype will end given the difficulty to streamline software development. There is little cultural/message loss when sewing t-shirt with a logo and well defined patterns on them, all designed by an artist and industrialists in Paris or Milan. The translation of digital application which spans across multiple type of devices, on terminals and multiple servers, constantly evolving to quickly adapt to business needs is another story. But hey maybe we will rather have somewhat satisfying software made abroad for cheap and guaranteed further unemployment locally than pay what is worth and have products well fit for purposes.
It's easier to outsource to smaller cities and towns. There's talented workers all over the US. They are in a closer time zone and are native speakers.
> There is a lot of underpaid, highly qualified talent on the international remote market
Maybe the laws need to be updated. Nobody anticipated remote work when the laws on visas/green cards were written. It seems like an exploit that you don't need any to work for an American company potentially taking the spot of an American worker. American taxes aren't even withheld in this case apparently.
Most companies don't hire international remote workers directly because of the costs associated with international tax reporting. If a worker is in another country, that means tax withholding / reporting in multiple places. So it's usually done as contract work through an international recruitment firm which handles all the payroll / tax stuff, or not at all. In any case, even if an American employer hired an American on contract, the full brunt of payroll tax would be on the contractor. Companies only pay half the payroll tax for employees classified by W-2s.
If they make laws in the US to make it harder to have remote workers to protect local people then the companies will use an existing foreign office or open a shell office some place where laws are friendlier and hire from there.
Without reading the article (site is down) my expectation is that the data will show significantly lower salaries in Europe than in the USA.
One of the explanations is that there are almost no genuine software development companies in Europe. Software jobs there are mostly internal (enterprise) software development or customization, and not software product or service development.
Being a cost centre instead of a profit centre has its effect on salaries, and is hard to overcome. If you are not satisfied with your enterprise developer role in the USA, you go to FAANG or one of the numerous startups. In Europe, you go, where? In another company that is not different from previous one.
"..there are almost no genuine software development companies in Europe. Software jobs there are mostly internal (enterprise) software development or customization, and not software product or service development."
So my career for the past 14 years has been a dream? Of course there are software product companies in Europe.
I can name any number of them for example in the really small (population wise) Helsinki area. Just to name a small subset: Supercell, Rovio, Remedy Games, Napa (ship design), Rightware (automotive UI:s), Basemark (AI and mobile graphics), F-Secure, Aiven...
Then there are hardware businesses that are deeply linked with software. Nokia (Networks, not phones...) being the most prominent of them, but new comers as well - IQM (Quantum computers), Varjo (VR headsets), Iceye (satellites)...
Then there are the subsidiaries of global companies developing software - NVidia, Trimble, Huawei (handsets), Amazon (robotics), QT, Electronic Arts, Unity...
This is not an exhaustive list but just a small subset out of the cuff. If I can name this bunch just from my local capital area in Finland I can only extrapolate that the Zoo of software companies in Europe is, in fact, quite large.
There are just not any Google of Facebook scale unicorns (except local subsidiaries of them course).
While the valley definitely skews the high end in America, it employs a fraction of the total developers in the US. There's the other 90% of the country that doesn't live in the valley that works in those very same "corporate development" jobs that are in Europe. You don't think companies like Walmart, State Farm, Allstate, Epic*, Target, Best Buy, UHG, Dell*, IBM* etc. etc. employ boatloads of developers all outside of the bay area? They should similarly bring down the average pay.
It's also unfair to say Europe doesn't have development jobs... heck SAP is the third largest software producer in the world and they're based in Europe. SuSE is still headquartered there. I have no doubt there are plenty of startups there as well.
*for accuracy - Epic, IBM, and Dell are all at least partially software companies but employ a ton of people outside of the bay area
I do consulting work for those kinds of clients, and we’re having a hard time hiring engineers with a few years experience below $150k. Previous talent shortages were primarily for that top 10% of developer talent / salary, but this one feels different because grunt-level unsexy corporate IT technologists are also in short supply.
Yeah, the difference is that your average corporation is sitting on a 10% net margin and tech product companies are sitting on a 35% net margin. Product companies are bidding for the best talent among eachother. Corporate IT simply cannot afford to compete with them on salary because their margins don’t support it.
I think we’re going to see a real bifurcation of the economy along these margin lines, where the “haves” and “have nots” are determined by the industry and company you work in.
> I think we’re going to see a real bifurcation of the economy along these margin lines, where the “haves” and “have nots” are determined by the industry and company you work in.
More interesting to me is how difficult it seems to be to move between these, and I imagine it will only et worse.
> no genuine software development companies in Europe. Software jobs there are mostly internal (enterprise) software development or customization, and not software product or service development
There are plenty of companies who make software product(s) as their main/only line of revenue in Europe. What there isn't, however, is FAANG style companies that are huge, very high profile companies (there are big technology companies, e.g. SAP, but none that I can think of that are so consumer-facing as FAANG).
> In Europe, you go, where? In another company that is not different from previous one.
Yeah, this simply isn't the case. Different companies are different to work for.
I'm from a small European city of around ~100k people. I think we produce a decent number of successful startups for our size despite having access to only a small fraction of the capital compared to Silicon Valley startups. However their fate is to be eaten by the big fish, so if you take a walk around industrial areas you'll see offices for IBM, Oracle, Cisco, Fidelity etc. not realising that they were formerly successful startups and think that there are no "genuine software development" companies in town.
> you go to FAANG or one of the numerous startups. In Europe, you go where?
* In startups.
* In FAANG offices (they have offices in Europe).
* In other software development companies which are neither of the above, but are still numerous in Europe.
To say Software development in Europe is mostly internal enterprise software development is blatantly wrong. I'm in no way saying the job market and domain topology is the same, because it definitely isn't, but this is an incredibly inaccurate take about the software market in Europe.
Another explanation is that EU is not a large cohesive economy like the US. In the US, startups target a potential userbase of 300M+. In the EU, a startup typically only targets a single country with a fraction of the population. Seems obvious that the potential profitability of a piece of software correlates with the population of its market. And only natural that developer salaries correlate with the potential profitability of the software that they make.
with lower salaries, and they are trying to justify it by the “lower cost of living”, which is not actually lower. The only the exception is Switzerland - FAANG salaries here aren't lower, because this country has so legendary cost of living ;)
The US has higher cost of living if you factor in the many externalities like lack of usable public transit, mass shootings, the opioid epidemic on the streets, and many other US disasters impacting the cost of getting an equivalent quality of life.
I don't know where you go if it's about the type of work you do. If it's about compensation, you go freelance. You can double your income or lower your work load. Your future is less secure, but who here really believes that developers will no longer be in high demand within the next 10 years?
Which Europe? Every country has a rather specific profile when it comes to the prevalent kind of IT employment. In the UK and in the Netherlands there could be opportunities on par with SV, in Germany it's mostly IT departments of non-IT companies as well as mostly unimaginative EU-funded startups, in Eastern Europe (Poland, Ukraine, Romania, Bulgaria) it's a mixed bag between US/EU outsourcing, big multinationals and small local product companies.
I don't know a single person making SV money from Europe. Difference between dev salaries between eastern and western Europe has shrunk somewhat, thought.
As is often the issue with articles like this, it discusses salary rather than compensation (sourced from Glassdoor). Since compensation at the high end is disproportionately in equity (or in finance, bonuses), this makes the range of compensation look artificially small. Differences between e.g. junior and senior devs are probably bigger than this article lists, and I suspect there might be bigger differences between Europe and the U.S.
On a related note, I feel like there's a huge range of different job categories lumped into the title "Software Engineer/Programmer". If three teams were respectively building the front end to a website, an embedded system, and a machine learning compiler, they will probably not have much overlap in senior candidate pools. Has anyone done an analysis of compensation trajectories among different specializations of programmers?
Well salaries also ignore health insurance, unemployment benefits, pensions etc. which artificially inflate the difference between the US and Europe. Also other things like childcare and schooling. I mean just the difference between what one has to pay for childcare per year can amount to several $10k and then there is college. So these calculations are definitely not so straight forward.
All of that is true, but at the scale we’re talking about those are rounding errors.
Sure, housing in the Bay Area costs $36k more per year and yeah, you might shell out $10k in a year for medical if you have a baby and yeah, your kid might cost $20k per year in private school, but when you’re taking home $200k more per year, an extra $50k doesn’t move the needle much.
While that's true (and on the other side, the analysis also doesn't consider tax rates), I think those are fairly minor compared to the effect of equity on compensation. Looking at Dropbox as an example of a U.S. tech company that I picked at random-ish, I see compensation range from 40-165% higher than salary, which means a huge difference.
Another problem with many salary related articles/discussions is statistical oversimplification.
For example, downthread I linked to a page listing the Canadian software dev salary at ~67k CAD, but I know for a fact that there are companies paying 150k for senior level talent.
What this means is that average alone doesn't tell you the whole story.
> No US Company will never "outsource" to europe to save 50% per full time worker
To a point this has already happened, there are tonnes of American tech companies hiring in London. The cultural difference between the US and the rest of the Anglosphere is fairly minimal, which makes us plus Canada obvious choices for "nearsourcing". And if the planned UK-US free trade agreement goes through, this is just gonna accelerate.
They do though. They've been doing it for years. I mean UK's no longer in Europe so your point may technically be true but I've had plenty of recruiters contact me from big US tech co's who operate via EU/UK (sometimes shell) entities.
EDIT: to further qualify, those orgs base salaries have typically been in the range £120k-£150k if a quick scan through my notes is in any way representative. And obviously the FAANGs pay extremely well when you factor in stock but those figures are quite hard to come by.
Can confirm that 120-150 is mid-range base for a senior dev or devops roles in London; not just for fintechs in the City but from post A-round startups in Shoreditch and established companies around town. I have seen some outside IR35 contracting roles start to exceed £1000 per day in the job description (so you know a canny operator can be getting more for that contract.). 8-12 months ago everyone was holding their breath and not hiring while they waited to make sure they survived the Covid lockdowns, but now that things seem to have recovered it has become a sellers market as everyone tries to catch up on a backlog from not hiring over the previous six months.
>Long time ago there was a trend to outsource to india. It didn't end well from what I remember.
This is a narrative that often gets repeated on HN and reddit but IT outsourcing to India has been increasing in the past 20 years. IT outsourcing now makes up 8% of the Indian GDP, 50% of Indian exports, and is on the receiving end of half of the Foreign Direct Investment into India.
Within India people from other fields are rushing to coding bootcamps because salaries in IT outsourcing are so much higher than any other field.
I'll add to the narrative. IT outsourcing has been an unmitigated disaster for Engineering departments I've been part of. Losing control over your own hardware and network, putting it into the hands of a cut-rate operation managed by a non-Engineer, it seems obvious. Necessary changes are too late to matter or never happen. Resources get locked in a closet to "keep Engineers from messing with them" which means to reboot the crashed server it takes a call to somebody in a different timezone who creates a 'ticket' that gets prioritized later and eventually happens next Tuesday.
I waited a month for a RAM upgrade so I could scan GB log files from lab hardware and solve an issue. Long after the need was past our (formerly self-directed) local IT guy came with the new RAM. I mentioned I'd long since had to work around it, and he just grunted. He'd heard it all. And been looking for work since the change.
This experience repeated again and again and again, and you see how the 'legend' builds.
I also made a similar project. It has mostly the salaries data in Indonesia, but there are few salaries data in Singapore and US. This is the project: https://predictsalary.com/salaries
One has to start from somewhere. In the future, the freelancers should be separated from the full-time employees. And I have to count for other things like bonus, RSU, etc.
Sure, I get that salaries are higher in the US. Overall quality of life though? I'd take europe, personally.
My salary is 50% lower than my SF-based colleagues but my quality of life is amazing. Large house, green open spaces, my taxes pay for high-quality healthcare and a _relatively_ equal society.
I'm far richer here, in many ways, than I would be if my bank account were a bit larger.
Large houses with open green spaces seem much more attainable in the US then Western Europe. Additionally, if you're an American SWE you would have pretty great healthcare benefits anyway. In terms of average care outcomes, moving to Europe might be a step backwards in that regards.
They're probably less attainable specifically around San Fransisco and Silicon Valley than in most of Western Europe though, even on a SWE salary. It's definitely true in cheaper areas and states though.
This is how I feel as an American too. If i didn't have such strong ties here (family, friends, etc.), I'd move to Europe in a heartbeat and take the lower salary for QoL improvements.
Until when you retire you find out you paid to a system that was will reward you a small amount and you would pay taxes on that. Tell me about quality of life then!
As an SWE, id take US any day.
I think this is due to the self-reported nature of Glassdoor, and it exposes how this is a flawed methodology. The original point of salary disparity still stands, but any single datapoint here is likely not reliable.
That could be a 'translation' issue. In some companies 'staff engineer' is top elite. Where as in other companies it is entry level. Could be something similar?
I assume because their data source is not great (aggregation of some kind of Glassdoor data).
* Looking at data for Google in San Francisco, Glassdoor says that average total compensation for a "Senior Software Engineer" is 230K $, whereas levels.fyi (which I trust a bit more) says that Level 5 (the one labeled "Senior SWE") earns 350K $ on average. Interestingly, Glassdoor also offers a breakdown of total compensation into the components. Adding the average value of the components together also results in something around 350K $ ... I guess Glassdoor just aggregates things in a wrong way.
* People at different stages of their career probably have a very different likelihood to create a Glassdoor account (let alone one that accurately names their salary). Similar with small vs. large companies, European vs. American companies etc. This potentially introduces enough bias to make the whole thing worthless for jobs that have a large variance in salaries (such as "director of engineering").
* I still assume that the general thrust of the article is right (when starting your software eng career, the bay area is not a bad place to be). But I wouldn't trust the salary numbers very much.
Six to eight weeks of vacation, plentiful Holidays, a 35-hour work week. If you look beyond pay as strictly salary and break it down into an hourly rate, I'd argue that European developers make considerably more than their American counterparts.
I make 55k per year and pocket about 41k, 14k goes to taxes.
To be fair I'm a 26uy old sysadmin, but my understanding of the US is that this would be low tier, whereas in Sweden this is quite great, specially considering my age. I get 5 paid weeks, 2 or 3 unpaid. Considering our free healthcare is shit unless you're about to die or get rendered useless I'd say there's a difference.
I do understand why though, American IT companies automatically have a reach of 350M people without a fuzz, the biggest you can go in Europe (in one country) is 80m speaking the same language.
What I mean is, an American developers code is more likely to be used by more people, generating more profit, driving wages up.
We need to regulate English proficiency in the EU (as in school wise or get fined a couple billions) to be able to get to the level you're already at.
EDIT: my employer effectively pays 77k for me with the "employers tax" too, so 77-41=36 almost 50% is taxed away, so that skews the numbers a bit more.
I often get the feeling many people just maximise their take-home pay rather than how they function within the rest of society (and what society can do for them). I don't think any amount of money would convince me to have to live in the US.
my two cents as someone that worked in Europe and the US:
> time off
I get 21 days in the US, but any holiday that falls on a weekend I am guaranteed to get on a weekday.
Ultimately it ends up somewhere around 30 paid days off I would guess. Back in Germany, if a holiday fell on a weekend, I just lost it.
> government paid health care
In Germany I had to pay 7.5 percent of my salary + my employer had to match that. When I was freelancing I had to do the full 15%.
The US clearly has the worse healthcare system overall, but I pay a LOT less for MUCH better service. That is however just because of my employer and on a population level it's a catastrophe.
That being said, my impression is also very skewed by FANMAG and the average experience is probably worse.
There's an upper limit for the health contributions though. Software freelancer in Germany ends up paying about 900€/month if they're publicly insured.
This argument always gets brought up. The thing is, even in much of the Europe, highly paid professionals don't use the government paid health care, but instead get health insurances from their employers, so the situation is the same as in the US. For some reason those health insurances seem to be much cheaper here than in the US, though.
In France (and probably in other European countries), private health insurances from employers are complementary to the government health care and don't replace it. That's why it is much cheaper. And so even highly paid professionals still use the government paid health care.
Moreover, if it wasn't the case it would make the national health care system a lot less efficient.
At least in Poland, the private health insure won’t cover serious procedures, eg they will cover cardiologists, but not a hospital stay, operations, etc. this means they are much cheaper because they don’t have this tail end, high value risk. You still rely on the national insurance and health care system for that.
I know zero people who have private health insurance. Some companies offer it as a perk, but I have never heard of anyone paying for their own private health insurance.
Ireland. Without private health insurance you would be waiting many years before you would get to see a consultant in the public system. To even get an appointment in a public hospital in a reasonable amount of time you need private health insurance.
Americans make several multiples what europeans do in this market. Healthcare is expensive, but it's less than 20k/year. The salary differences are frequently >100k/year.
You can also negotiate PTO. Passive-aggressive "unlimited" (but not really) PTO is becoming a common bullet point in startup JDs now.
> Healthcare is expensive, but it's less than 20k/year.
That's not true. I pay about $10,000 a year for healthcare and my company pays roughly another $20,000. And that's before I have pay per visit up to my rather high deductible. And I work for a large company with good benefits. Healthcare costs in the U.S. are insane and almost hard to fathom if you haven't lived through them yourself.
>I pay about $10,000 a year for healthcare and my company pays roughly another $20,000
Oh wow. What are your circumstances where these costs make sense? Did you/your wife give birth, and someonwin your family have surgery? Are there special circumstances that would jack up the bill?
$30k for a family is REALLY high for almost any situation.
Your benefits aren’t that great. I was paying $200 per month premium for my entire family ($2400 per year). $1000 deductible, 90% coverage, max of $2,000 individual or $5,000 for the entire family.
So maximum in any year was $7,000. And unless we had a birth or major surgery it was typically much less.
I work for a large tech company. I'm paying about $16k a year after monthly premiums and annual deductibles for a family of 3. (All but $6500 of that is pre-tax).
It's not at all uncommon for companies, even small ones, to pay 100% for the employee. Paying for spouses and children is much less common.
Most companies offer pretty good health insurance immediately.
Usually there are options like Kaiser in CA that are all inclusive similar to what you’d see in Europe. Some offer cheaper options. Some offer options that include health savings contributions from the employer to offset high deductibles.
How do these plans work when you lose your ability to work, like in an accident or longer sickness? Do companies keep you employed? Do you still get to keep the health insurance for a time after this?
Salaries don't tell the whole story for an employer because you have to pay many more charges on top of the salary. For example in France, the "charges patronales" are about 60% of the salary before taxes. In the UK, the National Insurance contribution for the employer are lower but it's always higher than in the US if I remember correctly. When I compared hiring in France vs the US, the cost was just slightly lower in France but not by the amounts shown here.
For the employee, the salary is obviously much lower than the US but then they also don't have to save for uni, medical care, retirement etc...
The disparity is massive, the company I work for has an eu office (in an enormously expensive city) as well as an office in California, in an area overall less expensive than the EU city.
I found that an interns salary is the same as my base salary, which was fairly insulting, but the full time engineers got similar stocks/bonus but in addition also get about 2.5 - 3 times my base salary, while paying less tax in a slightly less expensive city. I found it quite upsetting.
It's really hard to compare both dev markets. In Europe, salaries varies a lot depending on the country.
There is Switzerland where average dev can earn up to 120k CHF (~ $130k) [1], and on the other hand we have Germany with average of 60k EUR (~ $70k) [2]. The UK is rather similar: 60k GBP (~ $82k) [3]. To have a perspective, we can also add Poland to the list: 240 000 PLN (~ $61k) [4].
As you can see, it's not that simple, especially when you take into consideration the tax rates and costs of living in each country.
240k pln in Poland is a rather high-end senior pay. Also usually net on a b2b contract, so the actual salary would be around 170-180k(46k $) pln after taxes. Admittedly you can live a really decent life for this here.
Obviously people look at Bay Area or Seattle salaries and see people that make $350k+ total comp or whatever insane numbers they are.
But even in second and third-tier places, it's relatively easy for a software person or even just a vaguely tech-adjacent role to make over $100k. I'm way, way out at the very edge of the exurban zone of Boston, and that's where I am, and my fiancé who is a non-technical project manager at a tech company is right behind me.
Typically the comeback from UK or German tech workers is that they have government health care and benefits, but they make half of what I make, pay higher taxes, and I have 100% paid employer insurance, four or five weeks of vacation, paternity leave, work maybe 35 hours a week, etc.
Europeans (and also Canadians) are wildly underpaid for their abilities.
Should be mentioned that in some countries (like my country, Norway), salaries are MUCH more compressed around a mean (i.e, lower variance), not just for specific industries. Software Engineering is no exception.
But then again, people live good here. The ones that don't enjoy it, or are more ambitious, tend to move anyway.
Many of the regular issues you hear American citizens deal with, are completely non-existent here.
edit: Also, and quite obviously, EU is not one country. There's just too much variation going on to compare.
I'd love to integrate some sort of salary scale into my job board [1] - this seems difficult since there's no open data for it. Google on it's jobs network shows something like "this salary lies on the x%"
For this, I'd love if companies shared salary information, or I could parse it from text in a reliable way. Any thoughts?
Looking at [0] and [1], it looks like Canada is ahead on average, but not by much. But also note that software development salaries can be bimodal (or even trimodal) depending on where you are[2]
I used to work in Munich (which has the highest average software salaries in Europe) now I work in Canada. From my experience salaries are higher in Canada than in Europe.
Not only that, it seems technologies are adopted faster in Canada vs Europe, and in my experience code quality better in Canada vs Europe. This is of course very biased and based on my own personal experience. So take it with a grain of salt.
I suppose the proximity with US makes Canada a better option than Europe due to language and timezone barriers.
Senior Software Engineer
A software engineer who has at least 5 years of experience [...]
San Francisco: $175,669
Lead Software Engineer
If you have more than ~8 years of experience [...]
San Francisco: $113,656
It would be cool if rather than averages we could see the distributions. From my experience I bet there's probably a pretty bimodal distribution in comp, averages don't really tell the whole story.
One thing nobody brings to the front about salaries difference:
Eastern Europe is, well, in Europe, and there are a lot of engineers willing to immigrate there.
Good English is not as much of a critical requirement in EU, and, in general, more big companies there are ok hiring foreign workers using their own language at the workplace.
Once a person is in EU, he becomes mobile withing a few years.
EU tech sector has a wider, more homogenous, and liquid labour market, despite the national differences.
More homogenous and liquid? Than the US? EU speaks 30 languages. That's a big barrier in terms of communication across the EU. And it's definitely not as liquid a labor market as the US where employees and employers can both decide to part ways at any time while the EU has much more stringent requirements as I understand it.
It's counterintuitive, and I also thought like that.
Because there is more choice, and diversity people are more acceptable of accepting a less than ideal fit jobs.
In US, IT workplaces, and especially dotcoms are all very much alike, thus people put much more effort to fit into the system as alternatives aren't going to be much different.
whenever there is more mobility wages will rise, simply because people jobhop more and companies end up raising salary/offer to retain talents. Regardless of distributed working outside the States, remote within the country will be the force driving it up.
The disparity (especially on the higher end) is in reality much higher since Glassdoor data may be stale and not accounting for total compensation. Take a look at Levels.fyi and see how much total compensation can differ across locations: https://levels.fyi/locations/
If the shift toward remote work really comes to fruition, I fully expect EU software salaries to rise. I’ve hired a lot of excellent remote developers in European countries. The trick is to pay them American-level wages, which are often substantially higher than what they could get locally. When you’re paying that much, you basically have the pick of the best developers you can find. Not only that, but they’re extremely grateful for the opportunity.
The obvious downside is the time zone difference, so this only really works once you’re large enough to have a whole remote team and someone able to manage them in their time zone.
This is also why I don’t believe the rise of remote work (if it actually happens) will be as good for US workers in major cities as they want to believe. There is a lot of underpaid, highly qualified talent on the international remote market.