No rush back to the office for software devs as salaries reach $180K

A software engineer works from home. — Image: tanatat/Adobe Stock

Contrary to growing calls for a return to the office and sweeping layoffs in the tech industry, data from hiring marketplace Hired suggests there was more demand for remote software developer roles in 2022 than there was for roles bound to a specific location.

Hired’s 2023 State of Software Engineers Report analyzed data from more than 68,500 candidates and 494,000 interactions between employers and software engineers on its hiring platform between January 2021 through December 2022. It also included surveys with more than 1,300 software engineers and 120 talent professionals and hiring managers in the U.S., the U.K. and Canada.

Hired’s report found that average salaries for software developers continued to inch upwards in 2022, with experienced professionals in major tech hubs like Silicon Valley, New York and Los Angeles taking home up to $180,000 per year.

Hired also found that companies remained eager to hire software developers remotely because it allowed them to tap into a wider pool of skilled tech talent.

As a result, software engineers received more interview requests for remote roles than “local” roles, defined by Hired as jobs tied to a specific location or market. Likewise, at the end of December 2022, remote roles paid more than local roles in every market but London.

Cities with the highest tech salaries

The San Francisco Bay Area paid the highest average salaries in 2022 for both local and remote engineering roles, at $176,000 and $180,000 respectively, the report found. This was followed by Seattle ($169,000 and $174,000), New York ($161,000 and $167,000) and Los Angeles ($159,000 and $164,000).

Philadelphia saw the largest average year-over-year increase in salaries for both local ($145,000) and remote ($148,000) roles, growing by 12{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847} and 7{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847} respectively.

Only in London did software developers receive more interview requests for local roles than remote opportunities in 2022, Hired found. Average salaries for remote and local roles were equal at £82,000 ($99,000 USD).

Also, 13 major tech hubs were identified in Hired’s report. These include:

Atlanta.
Austin, TX.
Boston.
Chicago.
Dallas — Ft. Worth.
Los Angeles.
New York.
Philadelphia.
Seattle.
San Francisco Bay Area.
Washington, D.C.
London.
Toronto.

Why remote roles pay more

Hired Chief Technology Officer Dave Walters suggested that more companies are recognizing the benefits of hiring remote tech talent.

“Whether due to salary transparency legislation or wage equality goals, the data indicates companies are beginning to ease their geographical pay bands in favor of a single band,” said Walters. “As a result, remote software engineers in smaller markets are realizing they have more ability to attract higher compensation, particularly in companies employing similar roles in the higher cost of living markets.”

SEE: Dice’s salary report indicates it’s still a good time to work in tech (TechRepublic)

More volatility in local salaries during 2022’s ‘layoff period’

According to Hired, local salaries showed more volatility during 2022’s “layoff period” between May and December 2022, while remote salaries flattened. During this period, remote roles remained highest in Silicon Valley at $180,000, followed by Seattle at $175,000 and New York at $169,000.

Los Angeles saw the largest negative impact to local salaries after layoffs began, which decreased by 6{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847} to $152,000 between May and December 2022. Salaries for local roles in Philadelphia saw the greatest growth during this period, increasing by 7{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847} to $150,000 after layoffs began.

More experienced software engineers were, predictably, more likely to have weathered job market volatility. By December 2022, 72{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847} of interview requests went to candidates with six or more years of experience, up from 64{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847} in January 2022, according to Hired’s report.

Senior talent also saw higher salary increases versus more junior talent between 2021 to 2022. The highest salaries were commanded by natural language processing engineers ($179,000), Blockchain engineers ($173,000) and security engineers ($172,000), the report said.

The most in-demand tech roles and skills

Employers were also quizzed about their tech needs in 2022. Back-end engineers were in most demand, receiving 59{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847} of all interview requests on Hired’s platform. This was higher than full-stack engineers (56{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847}) and front-end engineers (25{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847}).

SEE: Hiring kit: Back-end Developer (TechRepublic Premium)

According to employers surveyed by Hired, the most in-demand tech roles in 2022 were:

Back-end engineer (41{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847}).
Engineering manager (38{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847}).
Full-stack engineer (27{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847}).
Site reliability engineer (19{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847}).
Data engineer (17{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847}).

In terms of in-demand expertise, Ruby on Rails topped the list, according to Hired’s report. Engineers proficient in Ruby on Rails had more than 1.5 times more interview requests from employers when compared to the marketplace average.

The top five most in-demand technical skills were:

Ruby on Rails.
Ruby.
Scala.
Go.
React Native.

With the job market seemingly in their favor, software professionals are feeling optimistic about their future: 68{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847} of those quizzed by Hired said they were not concerned with the prospect of losing their job in the next six months, while 40{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847} said they had seen demand for their skills increase over the past year and expected this to continue into 2023.

Is the “tech winter” thawing?

Not everyone has enjoyed the same sense of autonomy and job security as seasoned tech professionals, with layoffs having the greatest impact on junior and nontraditional engineers. According to data analyzed by Layoffs.fyi, more than 160,000 tech workers lost their jobs in 2022.

However, according to a recent CompTIA analysis of data from the U.S. Bureau of Labor Statistics, the unemployment rate in the tech industry fell from 1.8{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847} in December 2022 to 1.5{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847} in January 2023, indicating that sweeping layoffs affecting big name tech companies do not paint a full picture about the state of tech hiring.

Hired CEO Josh Brenner said the findings suggested laid-off workers were quickly “reabsorbed into the workforce” and that tech sector layoffs had mostly affected nontechnical workers, such as sales and support staff.

“We’ve witnessed an incredible shift in the tech hiring landscape since we published 2022’s report,” said Brenner. “After significant rounds of layoffs in the last few quarters, employers and candidates alike are finding their footing for 2023.”

Brenner added that declining unemployment rates in tech and the fact that many employers were still hiring were “promising,” adding: “It may feel more quiet than a year ago, but we’re optimistic this ‘tech winter’ is thawing.”

How to hire and retain the best software developers

Companies wishing to hire and retain key talent in 2023 have a few things to focus on, said Hired. First and foremost, developers highly value flexibility in their roles, with 21{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847} claiming they would quit immediately if ordered to return to the office full-time; another 49{64d42ef84185fe650eef13e078a399812999bbd8b8ee84343ab535e62a252847} said they would stay on, but look for a new job.

To maximize their chances of hiring and retaining top software talent, Hired advised employers to follow these best practices: