Checking out wages and compensation can give us some cool insights into how in-demand different skills are in the job market. Even with layoffs happening in tech companies, the number of professional developers worldwide is still on the rise. One reason for this is that modern businesses have realized that tech is becoming essential for all sorts of industries. So, whether it's an online shop, or a car manufacturer, they all need to compete for developers to keep up with the tech game.
Compensation plays a major role in attracting and retaining talented developers. Companies need to understand the salary, bonuses, equity, and perks they should offer to get those skilled folks on board. On the flip side, developers can use compensation data to make decisions about their own careers, like negotiating salaries and benefits.
Let's dive into our latest Developer Nation survey, where we explore how developers get paid. We'll see how compensation varies in different regions, and how companies and developers need to consider living costs when negotiating.
If you are interested to share your experiences to shape the trends you can participate in our NEW Developer Nation survey here. As a thank you, we will send you a virtual, goody bag with learning opportunities such as access to courses, ebooks, and certifications.
Some cool findings: about 9% of professional developers make less than $1,000 a year, which includes part-timers, interns, and those on commission. As devs gain experience, they can command higher pay, with around $4,000 more each year for every extra year of experience.
At the other end of the spectrum, roughly 6% of devs earn more than $200,000 per year, which puts them in the top 1% of earners worldwide. This shows that developers generally earn more than folks in many other sectors.
Regional differences
North American professional developers report the highest average annual compensation – more than $100,000. The median compensation in the region, however, is closer to $75,000. Meanwhile, on the opposite end of the spectrum, developers working in South Asia report the lowest average compensation of just under $27,000 and the median compensation is around $5,500 per year. As is frequently the case with compensation, those with higher earnings greatly inflate the average, as is evident when we compare the median vs the average annual compensation.
Anyone who has travelled outside their hometown recognises that the costs of goods and services can vary depending on where you are in the world. Compensation very often reflects these differences in the cost of living.
As an example, we examine two countries with large developer populations: the United States of America and the People’s Republic of China. The median compensation of developers in the USA is around $75,000 per year. This is five times greater than the median developer compensation in China of $15,000 per year. However, when we account for differences in costs of living using the purchasing power parity index, we see that the average developer in China earning $15,000 per year can afford similar goods and services as a developer in the USA earning $25,000 a year. In practical terms, this means that developers in the USA still generally enjoy a higher wage compared to Chinese developers, but by a lesser margin (3 times more vs 5 times more) than is apparent when we directly compare compensation.
Perceptions surrounding compensation
While about half of developers think they're being paid fairly, around 39% feel underpaid, and 11% believe they're overpaid. Factors like gender, experience, company size, and education level can affect these sentiments.
We find that men are significantly more likely to report feeling underpaid in their current role. More specifically, 16% of men report feeling underpaid compared to 11% of women and 14% of developers who identified as non-binary. Conversely, 7% of women feel overpaid compared to 4% of men and 1% of non-binary individuals.
We additionally see that developers with more experience and those working for larger companies are more likely to report feeling underpaid. For each additional year that a developer gains in experience, we estimate that there is approximately a 7% increase in the odds that the developer will report feeling underpaid compared to fairly compensated. This suggests that companies do not financially value experience to the same degree as developers do amongst themselves.
Finally, if a developer has an undergraduate degree in software engineering, they are more likely to report feeling underpaid. The odds of a developer with an undergraduate degree in software engineering feeling underpaid vs paid fairly, are 9% greater when compared to all other developers. This effect disappears, however, once developers have a postgraduate degree; as having a postgraduate degree increases the odds of feeling overpaid by 50% compared to not having a postgraduate degree.
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