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Developer salaries are stagnating: Here’s how to prepare for tougher salary conversations

30 January 2024 , by Josh Nel

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In this article, we explore how the shift from the hottest-ever hiring market to the current macroeconomic environment has changed the relationship between demand for senior developers and the average salaries they can command.

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The developer job market has shifted and now favours employers

During the recent tech boom following the Covid-19 pandemic, demand for developers skyrocketed. This caused developers’ salaries to spike and companies offered more benefits, like remote work, to keep their people happy.

Now, the market has cooled and the balance of power has shifted back towards favouring companies. We’re starting to see more companies take back control they lost during the hottest-ever hiring market. This is impacting everything from more developers losing their fully remote status to senior developers losing some of their negotiating power.

Developers are responding to the shifting power dynamics by thinking the grass is greener elsewhere: 1 in 3 developers say they’re looking for a new role in 2024. Their main driver? A better salary.

Developers' reasons for leaving a role

As the cost of living continues to rise, it's not surprising that developers might consider their remuneration. At the same time, developers’ annual salary increases at their current companies have slowed:

As salary growth starts to slow at their current companies, more developers might feel that changing roles is their best chance to secure a higher salary.

This made us ask: What is the impact of chasing a better salary in the current job market?

Developers’ salary growth is slowing across the industry

When looking at the average salaries across years of experience, it's unlikely that they're going to get the sorts of increases they became accustomed to during the most recent tech boom.

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Over the past few years, we saw salary band growth stagnate for developers across the industry, and many have seen a reduction in their buying power after accounting for inflation. As a result, many companies will need to navigate conversations where expectations don’t match the new reality.

Be upfront about salary transparency to avoid awkward conversations down the line

Navigating tougher conversations around salaries in the current job market is critical to avoid wasting critical hiring time and to prevent hurting your dev brand in the long run.?

Try to be upfront about your salary ranges as early in the interview process as possible. This has two key benefits:

  1. If you’re transparent about what you can afford to pay a potential team member, you’re more likely to have developers who are happy with that offer apply. This ensures that you’re not wasting your time interviewing someone who might turn you down at the offer stage.
  2. At the same time, being upfront about salary will also ensure that you’re taking an important step to ensure that you’re providing a positive candidate experience. This goes a long way to help protect and even build your reputation in the market and make hiring easier as demand starts to pick up in the future.

Showcase the other benefits you offer as part of salary conversations

There’s more to a great offer than just your take-home pay. Showcase the other perks you can offer to make this situation work for everyone involved. For example, performance bonuses can be used to reward someone who has made a contribution to the company’s profitability or who helped drive business value.

If you’re looking for more salary data to help you benchmark market-related developer salaries, download our 2024 Developer Salary Benchmarking Report.

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