A Blog by Jonathan Low

 

Jan 25, 2012

Silicon Valley Average Tech Wage Surpasses $100,000 for the First Time

Nice work if you can get it.

And given the growth of Apple's earnings and the social media IPOs, it looks like you can get it if you try.

From a demographic standpoint, tech wages in Silicon Valley are also interesting because they are considerably higher than those of tech workers elsewhere in the US. This may be due to several factors:

many tech workers in other locales are actually medical technicians rather than tech industry software engineers; there is an intangible benefit to working in the Silicon Valley area, where the regional brand conveys a reputational 'halo' premium - deserved or not - to those who find work there; networking by workers among companies in that cluster may lead to better opportunities quicker thanks to the concentration of tech businesses; the hot social media IPOs are drawing venture capital funding which is creating a job shortage.

The answer probably contains elements of all of the above but the longer term implication is that job and wage growth in this sector may be a harbinger of broader economic growth. JL

Pui-Wing Tam reports in the Wall Street Journal:
Average annual salaries for Silicon Valley technology workers surpassed the $100,000 mark last year, according to a new survey, pushed higher by the strength of the region's latest boom.

Tech-jobs website operator Dice Holdings Inc. said salaries for software and other engineering professionals in California's Silicon Valley rose 5.2% to an average $104,195 last year
outstripping the average 2% increase, to $81,327, in tech-workers' salaries nationwide. It was the first time since Dice began the salary survey in 2001 that the wage barometer broke the $100,000 barrier, said Tom Silver, a Dice senior vice president.

The findings come amid a Web boom that has fueled companies such as Facebook Inc., Zynga Inc. and Twitter Inc. Last year, several of the companies—including LinkedIn Corp. and Zynga—went public, with Facebook poised for an initial public offering this year. Their success has sparked the creation of numerous new start-ups, which in turn has spurred a hiring war for software engineers and others.

In contrast, job growth elsewhere in the nation has remained relatively slow. U.S. employers added 200,000 jobs in December, and the unemployment rate ticked down to 8.5%, its lowest level since early 2009. But it is unclear how sustainable such gains may be.

"There's a tussle for talent growing in Silicon Valley and employers have to pay up," said Mr. Silver. Overall, tech-job postings in Silicon Valley on Dice rose to 5,026 earlier this month, up 26% from 3,974 a year ago, he said, even as tech-jobs postings nationwide only rose 11% over the same period.

The hiring boom is evident at SmartRecruiters Inc., a San Francisco start-up that offers a free recruiting tool. Itclosed a $5 million venture-capital financing this month and wants to add 40 employees by this summer, said Chief Executive Jerome Ternynck.

But with many job candidates receiving multiple offers, "the limiting factor is the ability to find the right people," said Mr. Ternynck. "We'd hire them all tomorrow if we could."

Silicon Valley's job-market strength has also had a halo effect on bonuses. Silicon Valley tech-worker bonuses jumped 13% last year to an average $12,450, versus an 8% increase to $8,769 nationwide, according to Dice. Meanwhile, hourly contractor rates in Silicon Valley rose 11% last year to an average $74 an hour, compared with $63 an hour nationally, said Dice

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