Opportunity shifts from higher cost-of-living markets
The rise in remote work prompted engineers and other tech workers to move, freeing many from higher cost-of-living (CoL) markets. Because an engineer’s salary goes farther in lower cost-of-living markets, tech workers are reconsidering where to live.
Hired data in the 2023 State of Tech Salaries showed positions based in higher CoL cities continued to decline from 78% in 2020 to 59% in the first half of 2023. Unsurprisingly, San Francisco (one of the priciest markets to live in) saw the biggest decline change. Positions based there were cut in half. They dropped from 38% in 2020 to 19% in the first half of 2023.
Medium CoL markets gained the most, expanding from 20% of positions in 2020 to 32% in the first half of 2023. Lower CoL markets increased from 2% in 2020 to 9% in the first half of 2023. While mid-market’s growth of 12% is higher, it’s worth nothing lower CoL markets more than quadrupled their previous percentage.
Average software engineer salary offers
Here’s the list of average salary offers made to software engineers on the Hired platform in 2023 (compared to 2022):
- SF Bay Area: $186,629 (up 4%)
- San Diego: $174,643 (up 20%)
- Seattle: $171,314 (up 1%)
- Los Angeles: $162,471 (up 2.5%)
- New York: $159,847 (down 1%)
- Boston: $156,510 (up 1%)
- Washington DC: $153,412 (up 1%)
- Austin: $150,246 (down 5%)
- Denver: $149,883 (up 0%)
- Philadelphia: $144,911 (down 0%)
- Dallas/Ft Worth: $139,742 (down 4%)
- Chicago: $138,795 (down 2%)
- Atlanta: $135,240 (down 8.5%)
- Houston: $134,711 (down 8.5%)
- Tampa: $129,323 (down 10%)
- Columbus: $128,854 (down 2%)
The draw of lower cost-of-living markets
While it’s useful to compare top offers in top cities, these average offer numbers are most compelling in the context of actual living expenses. For instance, what does a salary of $149,000 actually get you in Atlanta? And what would you need to earn in San Francisco dollars to maintain the same standard of living? This is where it gets really interesting.
After the CoL adjustment, most major metros offer more than their counterparts in San Francisco and New York City.
When you compare city-specific salary offer data with the actual cost of living in San Francisco, surprising winners emerge. Namely: Houston, Atlanta, Philadelphia, and Phoenix where tech professionals are offered an average of $40K more than those in San Francisco. Unfortunately, New York is the only place where adjusted tech salaries are less than in San Francisco.
These adjusted salaries tell us a few things about the cost of living in each city, and where salaries might help you afford more in one city than another.
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Average software engineer salary offers — in SF dollars
- Houston: $228,000
- Atlanta: $227,000
- Philadelphia: $223,000
- Phoenix: $218,000
- Denver: $217,000
- Austin: $210,000
- Dallas/Ft Worth: $209,000
- Chicago: $201,000
- Los Angeles: $199,000
- Seattle: $196,000
- San Diego: $195,000
- Tampa: $193,000
- Boston: $191,000
- Washington DC: $190,000
- New York: $156,000
[Tweet “TL;DR: Let’s all move to Houston.”]
In all seriousness, these adjusted salaries tell us a few things about the cost of living in each city, and where salaries might help you afford more in one city than in other cities. (Read how C2ER’s Cost of Living Index is calculated here).
Here’s a breakdown of average salary offers, average/median living expenses, and other metrics that might affect your quality of life, by some example cities:
HOUSTON
- Average software engineer salary offer: $137,000
- Average monthly rent for a 1 bedroom apartment: $1,087
- Median home price: $370,650
ATLANTA
- Average software engineer salary offer: $149,000
- Average monthly rent for a 1 bedroom apartment: $1,507
- Median home price: $485,182
PHILADELPHIA
- Average software engineer salary offer: $151,000
- Average monthly rent for a 1 bedroom apartment: $1,138
- Median home price: $450,913
PHOENIX
- Average software engineer salary offer: $140,000
- Average monthly rent for a 1 bedroom apartment: $1,179
- Median home price: $559,132
Sources: Apartment List, PayScale
Originally published in September 2016 by Whitney Ricketts. Updated by Hired Content Team September 2023.
Source: Talent Acquisition - hired.com
