Silicon valley compensation

According to the Industry report (2019) today the market for software engineer in the U.S. is “HOT” due to the shortage of people with this skill and the competition among top companies such as Google, Facebook, Microsoft and Apple.

Most U.S. technology companies divide employees into levels and adjust the salary based on those levels. The higher your level is, the higher your compensation. For example, at Google, entry-level engineers or Level 3, start at $130,000 dollars a year in total compensation (Salary and stock options). Which means a college graduate can make a six-figure salary immediately after school. (Level 3 is for graduates with a BS degree). On the average, it would take about 3 to 5 years to move up a level depend on how well they perform in previous work and the special skills that they have, and company needs. At Google a Level 7, which is considered the top level for most engineers, a person can make $608,000 a year in total compensation.

Apple has five levels for software engineers, from ICT2 (individual contributor tech) to ICT6. The starting salary for recent graduates is about $125,000 in total compensation. But it goes up and even accelerate in an exponential fashion if the people have specific skills such as Machine Learning or Artificial Intelligence. At Facebook, an E3 (An entry-level “software engineer 3”) often start at $126,000 per year. Microsoft’s system starts at level 59 for a software engineer and goes up to level 80 for a “technical fellow,” the leaders of a given field. Technical Fellow could make in the millions, but most do not want to reveal how much they made.

As competition continue to heat up, every time Google and Facebook realize they are losing too many experienced people, they bump the compensation level up and that encourage more people to switch jobs.

The leveling system also drives pressure on salaries throughout Silicon Valley and contributes to a high cost of living that make it very hard for people who do not work in technology area to live there.

In the past 5 years, the number of students enrolling in Computer Science, Software Engineering has increased over 30% but it still not enough to meet the demand. It is predicted that the shortage will continue for at least another seven years.

Sources

  • Blogs of Prof. John Vu, Carnegie Mellon University
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