Despite tech salary increases this year, many employees feel their pay does not reflect increased costs of living. According to Hired’s 2022 State of Tech Salaries report, 42.3% of remote respondents and 29.1% of local respondents surveyed feel their salaries have not matched the pace of rising inflation and living costs. Many have explored relocation already. So, if you’re a tech professional, should you stay or should you go?
How Far Does Your Salary Take You?
Let’s say you’re a software engineer living in the San Francisco Bay Area and earning an average tech salary of $176,000. Seems solid, right? Then you take into account the cost of living (COL) there and things take a turn.
Note: “Average tech salary” includes multiple roles on the Hired platform, including software engineers, engineering managers, devops, designers, analysts, and more.
After adjusting average salaries on the Cost of Living Index, we find earning that same salary in San Francisco is equal to making $223,729 in Atlanta. Relocation becomes an attractive option when it is clear earning power is different across markets. If you move to Atlanta, it’s like getting a $47,729 raise!
Perhaps you’ll consider Texas, where there are the second and third highest average salary markets in 2022, after adjustment for COL. Your San Francisco salary is the equivalent of making $216,000 in Austin and $211,000 in Dallas.
In contrast, if you consider relocating from the West Coast to the East Coast in a big move to New York, your San Francisco salary won’t take you as far. New York City had the highest COL in US markets. This means your San Francisco salary would be the same as earning $153K in the Big Apple – or over $23,000 less.
Should You Consider Relocation?
So, will you stay or will you go?
If you’re considering settling in a traditional tech hub like New York or San Francisco, know your earning power will go farther in smaller, second tier cities.
Thanks to remote work, tech jobseekers are increasingly based in lower cost of living cities, such as Denver, Austin, Chicago, Dallas, and Atlanta. Jobseekers from these cities rose by almost 8% from 2020 to 2022. Conversely, tech jobseekers in higher cost of living cities, such as New York, San Francisco, and Boston declined. This points to an exodus from major tech hubs.
Tech workers are increasingly distributed across the country thanks to remote work. A recent study from Brookings Institute found tech “superstars” like Seattle and San Francisco metropolises are seeing slower employment growth compared to “rising stars” like Atlanta and Dallas. As for “the rest,” or the other 83 metro locations studied, these areas saw tech employment grow faster in 2020 throughout the pandemic.
Inflation Grows No Matter Where You Relocate
In addition to the cost of living, many feel their salaries fall behind with inflation too. 64.5% of remote employees and 82% of local employees surveyed feel their salary is not in line with inflation.
Since the pandemic dramatically increased the ability to work from home (or anywhere) tech workers moved away from higher cost of living areas. In some cases it was practical. There was no longer a need to live in a higher cost of living area or they wanted a larger home to accommodate sometimes multiple home office spaces. Others moved to be closer to family, or simply because they were free to live in places they’d always wanted to.
It’s little surprise then, that most candidates still prefer pay based on their role. Only 20.2% strongly agree that pay should be determined by location or local cost of living.
Between growing costs of living and higher inflation rates, tech professionals may want to explore relocation. Shedding light on how far salaries can take you across locations does offer some guidance in knowing whether you should stay or go.
Source: Talent Acquisition - hired.com
