Contrary to growing calls for a return to the office and sweeping layoffs in the tech industry, data from recruitment market Hired suggests that there was more demand for remote software developer roles in 2022 than for roles tied to a specific location.
Hired’s State of Software Engineers 2023 report analyzed data from more than 68,500 candidates and 494,000 interactions between employers and software engineers on its recruitment platform between January 2021 and December 2022. It also included surveys of more than 1,300 software engineers and 120 talent professional software engineers in the US, UK and Canada as well.
The Hired report found that median salaries for software developers continued to rise in 2022, with experienced professionals in major tech hubs like Silicon Valley, New York and Los Angeles earning up to $180,000 annually.
Hired also found that companies remained willing 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 for “local” roles, which are defined by Hired as jobs tied to a specific location or market. Similarly, at the end of December 2022, remote roles paid more than local roles in every market except 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, according to the report. Seattle ($169,000 and $174,000), New York ($161,000 and $167,000) and Los Angeles ($159,000 and $164,000) followed.
Philadelphia saw the largest average annual salary increase for both local ($145,000) and remote ($148,000) roles, rising 12% and 7% respectively.
In London alone, software developers received more interview requests for local roles than remote opportunities in 2022, Hired found. Average salaries for remote and local roles were equal to £82,000 ($99,000 USD).
Also, 13 major technology hubs were identified in the Hired report. These include:
- Austin, Texas.
- Dallas – Ft. Value.
- Los Angeles.
- New York.
- San Francisco Bay Area.
Why remote roles pay more
Chief Technology Officer for hire Dave Walters suggested that more companies are recognizing the benefits of hiring tech talent remotely.
“Whether it’s because of pay transparency legislation or pay equity goals, the data shows that companies are starting to relax their geographic pay bands in favor of a single band,” Walters said. “As a result, remote software engineers in smaller markets are realizing that they have a greater ability to attract higher compensation, particularly at companies using similar roles in higher cost-of-living markets.”
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More volatility in local wages in 2022 ‘layoff period’
According to Hired, local wages saw more volatility during the 2022 “layoff period” between May and December 2022, while remote wages leveled off. During this period, remote roles remained in Silicon Valley at $180,000, followed by Seattle at $175,000 and New York at $169,000.
Los Angeles saw the biggest negative impact on local wages after the layoffs began, falling 6% to $152,000 between May and December 2022. Salaries for local roles in Philadelphia saw the biggest increase during that period, rising 7% to $150,000 after layoffs begin .
More experienced software engineers were, as expected, more likely to weather labor market volatility. By December 2022, 72% of interview requests were for candidates with six or more years of experience, up from 64% in January 2022, according to the Hired report.
Senior talent also saw higher salary increases versus more young male talent between 2021 and 2022. The highest salaries were natural language processing engineers ($179,000), Blockchain engineers ($173,000) and security engineers ($172,000), the report said.
The most demanding technology roles and skills
Employers were also asked about their technology needs in 2022. Back-end engineers were most in demand, receiving 59% of all interview requests on Hired’s platform. This was higher than full-stack engineers (56%) and front-end engineers (25%).
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According to employers surveyed by Hired, the technology roles most in demand in 2022 were:
- Back-end engineer (41%).
- Engineering Manager (38%).
- Full stack engineer (27%).
- Site Reliability Engineer (19%).
- Data Engineer (17%).
In terms of in-demand expertise, Ruby on Rails topped the list, according to the Hired report. Engineers who were proficient in Ruby on Rails had more than 1.5 times more interview requests from employers compared to the market average.
The five most in-demand technical skills were:
- Ruby on Rails.
- I am going.
- React Native.
With the job market looking in their favor, software professionals are feeling optimistic about their future: 68% of those surveyed by Hired said they are not worried about the prospect of losing their job in the next six months, while 40% said they are had seen Demand for their skills increase over the past year and is expected to continue until 2023.
Is the ‘technology winter’ thawing?
Not everyone enjoys the same sense of autonomy and job security as seasoned tech professionals, with layoffs having the biggest impact on junior and non-traditional engineers. According to data analyzed by Layoffs.fyi, more than 160,000 tech workers will lose their jobs in 2022.
However, according to a recent CompTIA analysis of data from the US Bureau of Labor Statistics, the tech unemployment rate fell from 1.8% in December 2022 to 1.5% in January 2023, indicating that the sweeping layoffs that affect large tech companies don’t paint a full picture of the state of tech hiring.
Hired CEO Josh Brenner said the findings indicated that laid-off workers had been “absorbed back into the workforce” and that tech layoffs had mostly affected non-technical workers such as sales and support staff.
“We’ve seen an incredible shift in the tech hiring landscape since we published the 2022 report,” Brenner said. “After significant rounds of layoffs in recent quarters, employers and candidates are finding their footing for 2023.”
Brenner added that declining tech unemployment rates and the fact that many employers are still hiring are “promising,” adding, “It may feel quieter than it did a year ago, but we’re optimistic that this ‘winter technology” thaws”.
How to hire and retain the best software developers
Companies looking to hire and retain key talent in 2023 have a few things to focus on, Hired said. First and foremost, developers value flexibility in their roles, with 21% claiming they would quit immediately if asked to return to the office full-time. Another 49% said they would stay 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:
- Be transparent about changing work policies to maintain trust.
- Promote more opportunities to connect and collaborate.
- Create an adaptive culture that embraces experimentation and innovation.
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