Comment by BeetleB 4 days ago
> It's unclear to me that you need to pay an extremely high salary to get a good Mozilla CEO - something like 2-3x the average staff engineer would make sense.
It's unclear to me that you need to pay more than $150K total compensation for a good SW engineer.
Yet many over here are getting paid double that.
Salaries are rarely based on value created. They are based on what others pay.
Hmm if this is true why is it so rare that software devs quit their jobs and make more money freelancing or starting their own companies?
I started out freelancing.
You have to spend large amounts of time finding clients and being a salesman as you sell yourself and your services to them.
Once you do that, you have to prove that you're the person you promised. Unfortunately, most clients reaching out to freelancers are very....difficult.
After you've done the job, you have to be your own accountant and billing department. I should mention here that collecting from a lot of clients is often a frustrating endeavor and you will almost certainly be scammed at least once (at which point you have to do the math on handing most of your profits over to a lawyer and risking getting a bad reputation as a legal risk).
Because you're contracting, you are on the hook for higher taxes than normal to cover stuff like social security. Unless you are getting bottom-dollar insurance (the stuff with a $10,000+ deductible where you still get bankrupted if your medical bills are bad), you are probably paying tens of thousands in health insurance.
Want holidays, vacation, or just a day off? That means you are missing a paycheck (at least missing a bunch of billable hours) and may have upset clients. If you need to make $100,000 at a corporate job, then you'll need to charge at least $150,000. If you want to work a normal 2,000hr/yr, then you are going to have to sell your client on $75/hr while they're seeing $25/hr or less from some overseas "talent".
Also don't forget that lots of the highest-paying jobs aren't open to freelancers. Even if you contract, you'll be going through an agency charging big money then giving you a tiny fraction of what they take in.
After I got married and had kids, I was busy enough without running a business. I want to spend time with my kids while they are still kids. I may make less as a FTE, but I work a lot fewer hours and have way less work stress.
As you're describing, your salary is also based on what a company adds to you in terms of value.
I accept the pay I'm offered not because it is based on the value I add, but because I know I'm getting screwed over and have no real recourse. Businesses have all the power whether you are trying to negotiate your FTE salary or a short-term 1099 contract.
If US programmers were to organize into a union and add some level of credentialism to keep out the fake programmers with no skills, I'm fairly convinced that you would see salaries increase dramatically.
Instead, because there's no unified representation, you get Microsoft laying off 9,000 people then (allegedly) trying to apply for over 14,000 H1B visas to suppress wages even further knowing there's nobody able to speak out against it.
It’s uncommon in the US because freelancing means having to source your own - usually both expensive and crappy - healthcare.
It used to be incredibly common in the UK - half the decent devs in London were contractors making 2-3x what permanent employees made. It’s now uncommon because the government nerfed it with IR35 rules.
Probably something along the lines of "if you only have 1 customer you're an employee"…
It's illegal in most of EU but several countries do not check. So I know PWC in italy hires external contractors but tells them to be in the office at 9 and so on… just a scam to not pay sick leave, parental leave, vacations and pension basically.
Devs are often either not good business people and/or don't want to be. Freelancing, in any industry, involves a lot more than just doing the actual job.
Also, as others have already mentioned, salaried with is much more stable.
At least these are my primary reasons, and those of some others I've spoken to on the matter.
Also a lot of value add comes from corporations which produce things of complexity greater than the sum of their constituent parts.
If you already have a platform in use by the entire world, that matter of scale makes it much easier to find value adds more than a sole proprietor could ever dream of.
It's for these reasons I'm wary of talking about "value add" only being from the developers directly implementing a feature. Without support, IT, security, Product, HR, etc, I could not deliver that value add.
Nobody pays for Firefox, so I’m not sure how you would determine value added. Development could also stop today and most of us would never notice the absence of upgrades.
You could probably calculate it based on how much ad revenue one can gain by having your own default search engine be the default in Firefox.
At least, that's probably how Google determined value added when deciding if it's worth the return when they funded (read: paid for development at) the Mozilla Corporation.
As one of the people at a corporation who sees the actually salaries people get paid...
Most developers make less than $150k in their local currency. A lot of the ones claiming to make more than that are inflating their numbers.
And this was before the mass layoffs that have been pushing down dev salaries.
All engineers in Europe (except maybe Switzerland) would kill for 150k a year. ESPECIALLY remote.
A lot of engineers in the US would consider 150k a year to be a good salary too. Calling 150k "low" is indicative that the person saying that lives in a bubble and has not bothered to look outside it. Lots of software engineers are employed in the US outside of Silicon Valley or NYC.
Thousands of software engineers have been laid off in the past few years and the trend doesn’t seem to be slowing down. I expect that there will, at some point, be quite a large number that would entertain a hundred and fifty thousand dollars versus no job.
It can be tricky to narrow down definitions but there are at least a million and probably less than 5 million software developers in the US. The last few years have seen ~100k students graduate with CS degrees each year. Thousands of layoffs over the timespan of years isn't going to impact it all that much. If you played your cards right you could get a $100k+ starting salary at a BigCo (not necessarily a FAANG) 10 years ago, I only expect that to have expanded, and anyone with a handful of years of experience is going to be above that and should consider shopping around for >$150k if they aren't there already.
> If you played your cards right you could get a $100k+ starting salary at a BigCo (not necessarily a FAANG) 10 years ago, I only expect that to have expanded
CompSci graduates have a noticeably high unemployment rate at the moment.
I agree that it’s not like everybody is losing their jobs, but the layoffs aren’t because of some cataclysmic economic event like in 00 or 08. Tech companies are choosing to lay off software engineers. Either these companies genuinely don’t need those engineers at all, which would drive down comp because it strengthens management’s negotiating position, or they do need them but have enough money to get by with skeleton crews until the cost of software engineers goes does, which also itself drives down compensation because it strengthens management’s negotiating position.
Either way there is downward pressure on SWE comp, and it’s being exercised by folks that can outlast every last one that insists that they wouldn’t even look at 150k. If your bosses decide you’re worth 70k max and nobody in your industry is unionized you will be looking at 40k being competitive
> They are based on what others pay.
That's the excuse given to make you accept those higher salaries. The truth is that there are not infinitely many positions for a CEO. There are certainly more people who can be competent CEOs than CEO positions.
If you give an indecent salary to your CEO, you will get a CEO who looks for a crazy salary. That doesn't mean it's the most competent CEO you could get. Try offering a decent salary and you'll see that people still apply. You may not get the typical narcissistic profile, but it's probably not a loss.
In my experience, a CEO pretty much sets the company culture. And it feels really weird to choose someone who's here for money/title to set your culture. But of course, the CEO is not chosen by the employees, but rather by other people who are also here for the money/title :-).
In a startup, the CEO also convinces VCs to invest. And again it's interesting: VCs have no clue about the technology, so you would think they try to invest for CEOs who set a good company culture. But instead they get convinced by the CEOs who bullshit them the best. Which makes sense: not only VCs don't have a clue about the technology, but somehow they think they actually do understand. I have heard a few discussions between CEO and VCs in startups (talking about the technology I was actually working on), and it was hilarious.
> If people work less as a result they don't really care.
They just don't know. Even if they genuinely try to ask feedback from the employees, it's biased. Employees generally don't give honest feedback because it's a risk for them (especially if the company culture is bad, which is where the feedbacks would matter the most).
I think that factors in cost of living in silicon valley. I don't think devs even in other areas of the US make that much.
I was offered a job at a big tech but I'd have had to move to the US to their campus because they hate remote work. And they offered only 120k (they probably figured that sounded like a ton of money to a European). But I started looking at the cost of living there and it was insane. I'd have had to share a flat and it would have to be far away, not a few km from the office like I'm used to. No way.
Of course then Trump started happening and I was so glad I didn't move there. I'm kinda LGBTQ too so I'd be royally screwed if I'd been there now
I would say it's both. A high market rate for labor pushes CoL up (because people have lots of money to spend), but a high CoL also pushes the market rate for labor up (because you can't get anyone to work for you if you don't pay them enough to make ends meet). Trying to decide which one is the root cause is a classic chicken-and-egg problem.
The CEOs and managers don't understand that for every square meter of office space you need like a dozen square meters of residential space. It's very easy to have excessive amounts of office space that make you think you can hire more people, but in reality you have already exhausted your local recruiting pool.
> I think that factors in cost of living in silicon valley. I don't think devs even in other areas of the US make that much.
Depends on the specific job, company (big tech vs not), and city. Seattle, NYC and a handful of others may pay on par with bay area.
For a senior at random faang or equivalent, that might mean $300k-$500k / yr. More for some NYC positions in the finance industry.
If salaries were based on value added, a lot of software dev salaries would be orders of magnitude higher.