2021 may have seen the Great Resignation, but in our field 2021 has been more like a Gold Rush. Developers are on the move and seeing significant pay increases. Massive demand and compensation transparency provided by sites like levels.fyi and Teamblind have juiced the market. When I was working tech jobs, the expectation was that one could expect a 20% bump when changing jobs. A few years ago I tamped peoples’ expectations down to 10-15% increases. Yesterday I talked to someone who is well paid now and looking for a 30-40% bump. He'll probably get it.
What’s driving the huge increases? Big Tech for sure. This phenomenon wouldn’t be happening without the soaring stock prices of the FAANG companies. More and more we are seeing other firms bid competitively to prevent losing top candidates to these firms, which is only creating more competition. One firm recently told us, whatever Google is paying, we’ll pay more. Another dynamic is that the excitement of joining firms like Google/Facebook/Amazon has faded to a degree. These firms are now huge. Developers feel like their contributions are less significant, and there's the inevitable big company bureaucracy to contend with. What’s the solution? Pay people more. Big tech firms have upped pay to maintain a steady flow of new hires and retain their better people.
What do you do if you don’t have shares of Facebook stock or options in a high-flying startup to offer prospective employees? Improve benefits, offer more flexible work arrangements, up the $, and recognize that it’s going to take longer to hire.
Remote Trend
I keep talking about the fact that hybrid/remote work arrangements are here to stay. Proof? Per LinkedIn: “Pre-pandemic, 1/67 jobs posted on LinkedIn were fully remote. Today: 1/7 postings are remote.”
The appeal of working remotely is obvious. However, I do agree with this sentiment from a Morgan Stanley MD:
Industry publications that talk about “bankers” are usually not referring to IT professionals. However, unless you are content to be paid for coding alone, in order to advance your career, you need to be in the office more than not.
Dispersion
The increasing geographical distribution of talent coincides with a trend towards the dispersion of venture capital. The graph below reflects the decreasing concentration of VC dollars in Silicon Valley.
Companies with near-shore strategies in cities like Dallas, Salt Lake City, Atlanta, etc. are now finding that they are competing for local employees with companies that are hiring remotely and paying more than the local standards. Expect geographical differences in salaries to decrease.
Cloud Banks
Goldman markets itself as a FinTech firm to help attract technical talent. They have embraced FinTech more than any other bank. Recently they partnered with Amazon to offer GS Financial Cloud for Data, making market data and software tools available to hedge funds and asset managers.
Citi recently announced the sharing of post trade data via Snowflake. Is this the end of 50 years of getting files via FTP?
Crypto
Where’s the action? That’s easy - Crypto is attracting money and talent at an accelerating pace.
“This massive amount of dry powder minted at least 47 companies with valuations above $1 billion — so-called “unicorns” — in the crypto market.”
When Citi starts a Crypto Division, you know the market is becoming mainstream.
Public Cloud
If you think that hedge funds won’t run their proprietary models on public cloud, think again.
Hiring
Everyone is hiring. Please be in touch if you are interested in discussing the current market.