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The tech industry has cooled down from its historic highs during the pandemic. High inflation rates affect candidates and companies alike. What does this mean for your salary as a developer in 2024? Based on our experience helping companies hire developers on OfferZen, here’s what you can expect and how to navigate your salary in the job search this year.
What are the current tech hiring trends?
After the tech boom during the Covid-19 pandemic, many tech companies scaled rapidly, but now the tech industry has experienced a cool down from historic highs in the last year.
During the Covid-19 pandemic, low interest rates coupled with an increased focus on digital tools and e-Commerce increased funds available to tech companies, especially in the United States. This massively increased the valuations of Big Tech companies like Meta, Twitter and Amazon. It also inflated funding given to startups and late-stage scale-ups.
However, business profitability has failed to keep up with growth. As a result, many of these companies are now struggling to raise capital and implementing layoffs.
The good news is: Companies with solid business foundations continue to grow and hire developers. Software continues to be a core driver for business growth, so demand for excellent talent still outstrips supply.
However, many companies — especially startups and late-stage scale-ups — have seen their funding shrink. As a result, companies are shifting their focus to capital-efficient growth instead of growth at all costs: The industry has returned to pre-pandemic levels of growth.
That means many employers are generally budgeting more carefully when hiring new team members. For you as a developer, this means you’ll need to take current market conditions into account when thinking about your salary.
Here’s what we see happening to developer salaries
For you, two things have become even more important in the current tech hiring market:
- Benchmarking your salary expectations against the market situation
- Having a clear idea of what other benefits you care about in a compensation package
“We see many candidates asking for salaries that might’ve been realistic during the pandemic’s tech boom — salaries also skyrocketed as a result at the time. But most companies now are just not able to keep that up anymore.“
- Gert Barnard, OfferZen Account Manager
Benchmarking your salary increase expectations
What you can expect from your salary is influenced by various factors of the role you’re applying for, such as the company size, the industry, your specific skills and the nature of the work.
It’s also helpful to look at your current salary or salary at your previous job, and take into account the type of increases that employers consider as standard when setting your expected salary.
To give you a gauge of what market-related salaries look like, you can:
- Download our 2024 Software Developer Salary Benchmarking Report.
- Check out our resource hub on developer salaries.
- Use OfferZen for your job search and talk to one of our expert Talent Advisors, who will help you with the benchmarking.
Here’s what increases we’ve been seeing from companies in the European and South African markets: Most companies consider a 10-15% increase from your previous job the norm. That said, right now, many companies had to limit the increases they offer to fall more within the 6-10% range.
If you’re asking for a rise in salary far above 15%, keep in mind that this currently falls beyond what most companies consider easily achievable right now. If you’d like to ask for these salary ranges in any case, know that your pool of options will be smaller and make sure you have your reasoning well prepared for your conversations with the hiring team.
There are some exceptions to this rule of thumb:
- If you’ve been underpaid in the past: In this case, asking for more than 15% might be fully justified, if you can back up your points with solid research. Be sure to bring this point across clearly in your application and your conversations with the hiring manager.
I always advise candidates to say: “I am aware of what other developers or candidates with similar levels of experience and expertise as myself are currently earning in the market. And I would like to be paid in alignment with them.”
- Kyra Meiring, OfferZen Talent Advisor
- If you’re moving countries between vastly different economies: For example, if you’re moving from Greece to the Netherlands, it’s more common to ask for a high salary increase since you’ll need to be paid a better salary for the cost of living in the Netherlands. Just make it clear that relocation is your intention in your application.
- If your seniority and skills justify it: If you are at a very senior level, have an extremely scarce skill set in very high demand right now, or are performing at an exceptional level, companies would be more willing to compromise on their salary budgets. In this case, it’s crucial to showcase these skills in the technical interview process.
Steps for setting your salary expectations
Right now, it’s about striking a balance between being market-related and getting the financial growth you’re looking for. You need to benchmark yourself to be more successful in your job search with companies that might be hiring more conservatively, while still getting an increase.
- Craig de Beer, former OfferZen Talent Advisor
- Be open about salary from the get-go: Avoid wasting time by discussing salary early in the process. You want to avoid giving them a surprise, as well as being offered a vastly different salary than your expectations.
- Use a cost-of-living calculator: This will help you settle on a reasonable salary for your specific region. Examples of these calculators include Numbeo.
- Rely on good sources of data: Benchmark your salary against reputable, objective sources like data reports. Don’t rely on subjective data like salaries that friends report, for example. While useful information, this might be an outlier to your own job search and difficult to rely on in conversations with employers.
Knowing what else you want from a compensation package
If a company’s financial budget is strict right now, they could be much more flexible when it comes to other perks and benefits. These can include benefits like stock, medical insurance, or support for training.
If you have to compromise on a less lucrative take-home salary for the time being, be sure to ask about these factors, which could make up the difference for you:
- Ask for a full breakdown of your benefits: Do you care about equity? Training or learning opportunities? What about additional leave days or flexible hours?
- Find out about the outlook for your role: How do performance reviews work at the company? How will your job package change over time for your role? What would it take for them to approve a raise for your role?
Keep in mind: Most companies want to get you excited and say, ‘I’m being compensated fairly. I want to join this company, and I’m super excited’.
- Shara Chernel, OfferZen Account Manager
Pro tip: Our company directory has comprehensive company profiles that shows you the major benefits and perks offered by companies.
