Specialised tech recruitment platform talent.io have just published their European Tech Salary Report for 2022. The general picture it paints is one of an economic rebound in the sector following the temporary contraction of the pandemic – an account largely in line with global trends.
The report is publicly available and, helpfully, includes summaries and key takeaways at the end of every section. For anyone with a more than passing interest in this topic, I would recommend reading the report directly.
This blog is intended to complement said report with some of my own personal takeaways, and not to repeat or replace those that are already in the document.
Before getting into the meat of the article, I have one quick caveat – although the document is titled ‘European Tech Salary Report’, readers should be aware that its scope is considerably narrower. This is a study of salary trends in a total of 5 European countries – France, Germany, Belgium, the Netherlands and the UK – the last 3 of which are represented exclusively by their respective capitals. It’s still a useful overview, it just shouldn’t be taken as representative of the tech scene in Europe as a whole. That would be a much more ambitious topic.
Having said that, here are my personal takeaways.
Germany’s Salary Lead Is Deceptive
The report by talent.io notes that “salaries of developers in Germany are some of the highest in Europe”, and indeed the numbers for Berlin, Munich and Hamburg are impressive. Only London, which must compensate for its notoriously brutal costs of living, manages to offer more.
Tech professionals with an interest in living in the Old Continent may therefore privilege Germany as a destination, but this is a classic case in which treating Europe as a level, uniform economic playing field would be a mistake.
German taxes and social security are among the highest in Europe. By comparison with France and the UK, roughly double the proportion of an average middle class salary will go in taxes, and an extra 33% in social security (this is a very rough approximation, naturally, and these figures can vary greatly depending on the industry).
Needless to say, this does translate to excellent public services and high quality of life, but developers who are in it for the money should be wary of hasty conclusions. This segues nicely into our next takeaway, which is…
Cost Of Living Is Losing Relevance As A Factor
The salaries in any given country or city have to be contextualised relative to the local cost of living, but the argument about ‘cost of living’ itself has to be contextualised. The report by talent.io is part of a growing body of evidence that location is becoming less and less important as a factor for tech recruiters.
Companies based in Berlin and London employ respectively 58% and 65% of their workers not locally but from abroad – extremely remarkable numbers. Paris in this sense is an outlier, with a solid 84% of their employees based in France.
This is not to say that cost of living is totally irrelevant. While I’m unable to find evidence to back this up, I’m pretty confident that most people would prefer to be based in the same country and city as their companies, sharing time zones, allowing them to take part in social events, streamlining taxation, etc.
Rather, the point is that compared to 10 years ago, there are now many more ways to take advantage of discrepant salary rates in Europe. Nothing is stopping you from living in a village in the Balkans while getting paid the salary of a London developer. Or in any case nothing other than broadband.
The Full-Stack Versus Backend Paradox Continues
To anyone relatively new to the tech industry, one particular aspect of this report will no doubt be the most perplexing. It is the fact that in most markets, backend developers earn as much or more than fullstack developers, although the latter by definition have a broader skill set. It would be like being told that interpreters who are bilingual earn more on average than interpreters who are trilingual – how is such a thing possible?
This will probably come as no surprise to the industry veterans among you, but it’s worth explaining it briefly for everybody else.
There are two reasons why backend developers tend to earn more, one of them legitimate and the other, well, not so much. The legitimate one is that larger projects usually employ separate frontend and backend teams, and not so often hybrid workers (except perhaps in the lead roles, which have their own job titles). And the most complex problems are usually found in the back-end.
Backend developers are therefore more popular as specialists working on tougher (ergo, more remunerative) problems. Fullstack developers, by contrast, will take a wider variety of jobs, including ones that are less well-paid, and as a consequence will earn a lower salary when taken as an aggregate group.
The second (and less legitimate) reason has to do with a problem of culture, a sort of myth which dictates that backend developers are the “true” developers while everyone else stands lower in the pecking order.
This view is becoming more and more obsolete as the industry diversifies, but it still has a legacy, and it stands to reason that this (still) translates into a discrepancy in salaries.
USA Salary Rates Still Lead
An extensive comparison between the salary rates in European cities and in the USA is not necessary here. Although there are several confounders which would have to be accounted for, from social security to the simple fact that the talent.io report calculated median salaries (while most available data for the USA reports the mean), the conclusion will always be the same: tech salaries in the USA remain much higher than in Europe.
Even allowing for every confounder mentioned above, this is indicative of European tech’s general lag by comparison with American tech – an issue the roots of which go as far back as the end of WWII.
There have been signs that Europe is finally picking up the pace, with both the EU and several individual states investing heavily in new technologies. Yet we are still a long way from closing the gap, and it’s important that we understand this. Let talent.io’s report be yet another reminder that we as Europeans can, and must, do better.