Like all commodities, specialized labor obeys the laws of supply and demand—when supply is low and demand is high, prices rise. For employers, it is perhaps unwelcome but unsurprising news that the increased adoption of technology in every industry, accelerated by the tsunami of work-from-home spurred by the pandemic, is now being felt in salary increases for software developers.
The latest rise is reported in the banking sector, where large firms have had to compete with hedge funds and technology firms that have typically offered more generous compensation for technical talent. Reports from users on forum website Blind have mentioned vice president of software engineering positions at JPMorgan coming with offers of $375k salaries. [i] Similarly, they also claim Goldman Sachs is paying upwards of $300k for software engineers in revenue-generating technical teams such as at their retail bank, Marcus. It might be tempting to dismiss online chatter, but other signs also point to an adjustment in pay for technical roles in banking.
While the firms have been close-mouthed in response to inquiries about these claims, publicly available information tends to back up the details of the online conversation. One source is the registry of salaries offered to H1B visa holders in the U.S. JPMorgan has a technology hub in Redwood City, California, due to its purchase of fintech startup WePay in 2017. According to the registry, H1B visa holders at that location are starting at $317k for VP-level software engineering jobs, $300k as senior engineering managers, and from $260k to $279k as associates. (Keep in mind these figures are salary only—unknown bonuses can and almost certainly do apply.)
While there is an expectation that Silicon Valley is a tough market for engineering talent, and thus might be an outlier in compensation, there are also signs of increases in JPMorgan’s New York City location as well. An executive director–level software engineering manager was offered a $235k salary according to the H1B visa records, while a vice president received an offer of $203k. Contrast this to 2019 rates, when software engineers in the Redwood City location were being offered $150k, as were VPs in New York. Now new associates are joining the New York City office with compensation ranging from $120k to $180k, more likely tending to the upper end of the range.
With banks waking up to the reality that software developers are in high demand, it’s safe to assume that companies looking to compete for top technical talent will need to put together well-thought-out compensation packages. The imbalance between demand for software developers, engineers, and other specialists and the supply of new candidates being trained in those areas will take years to correct; in the meantime, experienced technical talent is in even shorter supply. While filling technical roles has long been a challenge, firms should expect that successfully recruiting for these positions will be even trickier going forward.
Stiff competition means that awareness of larger industry trends in salary offers is of increasing importance in crafting job offers. With the growing adoption of remote work arrangements as well, companies must consider national data as well as regional data in determining what might be necessary to put together a proposal that will be seriously considered. Those that don’t risk wasting considerable time and resources on doomed candidate searches when they torpedo their own efforts with offers that don’t reflect the market.
If you can’t afford to waste time finding the right technical talent, Integress can help. As a boutique technical search firm, we specialize in finding engineering and tech candidates to fit hard-to-fill roles. Our understanding of national trends and challenges mitigates risks in the hiring process; we will carefully guide you on best practices for recruiting on all tech and engineering positions. We give you the advantage in finding the right person to fit your company’s needs and culture and in crafting the offer that will persuade your top candidates to come work for you. To find out how our expertise can give you the hiring edge, contact us here.