Salary, Perks, Benefits, Incentives – What Are Tech Professionals Looking For?
It’s no secret the tech sector pays well.
Technology is developing rapidly and most tech experts are enjoying increased demand for their skills.
For example, PayScale lists the average salary in the USA’s IT services industry at 78k versus a 55k average yearly wage for the whole country. This discrepancy is even more substantial in developing countries which are often preferable outsourcing destinations.
There’s also a significant lack of qualified tech employees all over the world.
The battle for quality tech talent has led to thousands of surveys and reports that provide us with valuable insight into what job candidates want versus what companies offer.
Let’s look at the results of three comprehensive surveys and see what they tell us about the tech job market.
The Salary Factor
“Salary isn’t the only important factor” – every tech recruiter and job candidate in 2019.
While correct, this statement doesn’t provide us with any valuable insight we can use.
These types of vague and somewhat blanket statements can even lead us to underestimate the importance of this factor.
One of the world’s largest websites for tech job ads – Dice.com – conducts yearly surveys on the salaries in tech. A comparison between the 2018 and 2019 salary points to a few interesting conclusions.
First, the average tech salary has been staying flat from 2015 – 2018, but the demand for quality talent is as high as ever. This has led to a sharp drop in the percentage of workers satisfied with their salaries. From 2013 to 2017, between 54% and 52% of respondents said they were satisfied with their wages. In 2018 that number dropped to 48%.
While salary satisfaction has slipped at specific moments in time, this 4% drop is the largest at least in the last 7 years.
As a result, more tech employees are expecting a change of employers in 2019. According to the latest Dice survey, 45% of tech professionals are planning to change employers with higher compensation being the number one catalyst for the change.
So, how are employers addressing the problem?
For starters, they’re trying to provide better compensation packages. Dice’s 2019 survey shows that increased compensation is the number one motivators that companies use.
On the other hand, The Robert Half Technology 2019 Tech Salary Guide shows that 43% of employers are willing to increase the salary or compensation package when hiring for specific positions.
We can read reports and surveys all day, but the fact remains – money isn’t the only factor, but it’s the most important one. Don’t underestimate its role when recruiting tech talent.
Of course, not everyone can play the money game and win. As a matter of fact, a select few companies can outspend the competition and pay the most money to top talent.
If don’t have an office in Silicon Valley or Wall Street, you probably don’t want to build your brand as an employer around how much money you can offer. As always there are exceptions, but this is still a good rule of thumb.
For most, hiring top tech talent will require a bit more knowledge and creativity, which brings us to our next point.
Benefits, Perks, and Incentives
Lots can be said about the other factors besides salary, so it’s best to start with a little structure.
The mentioned 2019 Tech Salary Guide by Robert Half divides these non-salary factors into three groups– benefits, incentives, and perks.
Benefits are non-cash compensations that aren’t tied to job performance. According to the guide, health insurance and paid time off are the most desired benefits by employees and are almost always provided by companies. However, only 52% of companies offer a retirement savings plan, which is the third most desired benefit.
Incentives are cash rewards sometimes tied to job performance. Again the two most desired incentives are offered most often by companies, but there’s a disagreement on the third. Companies are willing to grant annual or biannual bonuses (44% of companies) and profit-sharing plans (33% of companies). On the other hand, only 19% percent of employers are willing to provide sign-on bonuses.
Perks are special noncash privileges that can be tied to performance or seniority. This is the area where smaller companies can outmaneuver their competition in the fight for tech talent. According to the Robert Half Tech Salary Guide, the top three perks that tech professionals want are flexible work schedules, compressed workweek, and telecommuting (most often work from home type arrangements).
If we look at these perks, we’ll see that they’re a part of a broader term that’s grown in popularity in recent years – work-life balance.
As discontent with consumerism and capitalism in general increases, work-life balance is becoming the new norm. People want to spend less time commuting to some office and have more time for themselves and their families. Tech professionals demand work-life balance more than other groups since they know that in most cases, technology removes the need for their physical presence in the office.
According to Dice.com’s 2019 report, 52% of tech professionals would take a pay cut to work remote more often.
Another interesting annual report – the HackerRank Developer Skills report – shows that for both junior and senior developers, work-life balance is the second most important factor when choosing a job.
Most reports also show conflicting data when talking about work-life balance.
For example, the Robert Half surveys tell us 62% of tech companies offer flexible working hours. On the flipside, only 49% of respondents in the 2019 Dice report say that they currently have remote and flexible working options.
Of course, businesses have to think about their employer branding strategy when answering surveys, so it’s hard to take their word at face value.
Some other noncash factors, besides work-life balance, that can influence individuals are better working conditions, education and training programs, and more interesting or challenging tasks.
Looking at what tech professionals and employers in the sector say, a few conclusions can be made.
First, while salary and compensation aren’t the only factors, they’re certainly the most crucial factors for the vast majority of employees. Companies can’t hope to hire top talent without a competitive salary and bonus structure.
This isn’t great since large businesses will always have the upper hand in this regard.
On the flipside, the rise of work-life balance as a vital factor for tech professionals can be used by smaller businesses to win the battle for talent in the job market.
If you’re serious about recruiting the best in the sector, you’ll need to study the sector and the competition to see what they lack. Job candidates might be looking for better office conditions, more paid time off, a compressed workweek or a retirement savings plan. It’s a highly-specific subject.
That’s also the problem with general reports and surveys – we sometimes take their findings and try to apply them without considering individual preferences.
Looking at industry figures across the board helps since most companies apply the same practices but knowing what each unique individual needs is the crucial component.
Overall, high monetary compensation is a prerequisite for candidates, but work-life balance is often the X factor in making decisions.
If you’re struggling with finding and hiring tech employees, RnD Talents can help you win the battle for quality talent. As an employment agency, we bridge the gap between employers and professionals. You can learn more about our hiring method here.