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Aditya Vandhye

3 min read

Tech careers have been one of the most sought out choices for decades now. Complex problems, scale and impact attract the world’s best minds to this. Tech careers offer dynamic opportunities in a rapidly evolving landscape. From software development and data analysis to cybersecurity and AI research, these roles cater to diverse interests. Constant innovation demands continuous learning, making adaptability crucial. Tech careers promise both lucrative compensation and the chance to shape the future

Why are tech salaries at an all-time high?

Tech salaries are at an all-time high due to several factors –

  • The increasing reliance on technology in various industries creates a high demand for skilled professionals.
  • Shortages in specialised talent amplify competition among companies, driving up compensation to attract and retain top talent.
  • Additionally, tech’s pivotal role in innovation and revenue generation justifies premium pay scales.
  • Besides, tech remains the most heavily invested vertical by VCs and PE firms giving the companies access to huge capital. This translates to a constant battle among companies to get the best talent.

Higher salaries are not translating to better engineers!

  • While higher salaries in tech can attract top talent, they might not always guarantee better engineers for a few reasons:
  • Mismatch of Skills: Higher pay might attract individuals who are motivated primarily by compensation rather than a genuine passion for engineering. This can lead to a mismatch between skills and job requirements.
  • Lack of Development: Simply offering a high salary doesn’t inherently foster skill development or innovation. Engineers need opportunities for learning, growth, and challenging projects to become better at what they do.
  • Toxic Culture: Some high-paying tech companies might have toxic work cultures, which can hinder collaboration, creativity, and overall engineer improvement.
  • Job Hopping: Engineers might switch jobs frequently solely for higher salaries, preventing them from gaining deep expertise and experience in one area.
  • Focus on Short-Term Gains: If companies prioritize short-term profit over long-term investment in their engineers, they might not provide the necessary resources and support for skill enhancement.
  • Inadequate Training: Offering a high salary doesn’t necessarily mean providing adequate training and mentorship, which are crucial for engineers to develop and excel.
  • Lack of Autonomy: If engineers are restricted to specific tasks without autonomy and the ability to contribute ideas, their growth potential can be stifled.
  • Burnout: A culture of overwork and burnout can result from the pressure to maintain high levels of productivity, negatively impacting the quality of engineering work.

To foster better engineers, a holistic approach that includes professional development, a positive work environment, challenging projects, and opportunities for creativity is essential, along with competitive compensation.

Demand vs Supply gap

The demand-supply gap in software engineering jobs arises from the exponential growth of technology across industries, generating a substantial need for skilled professionals. However, this demand often outpaces the available pool of qualified candidates. The scarcity of skilled engineers stems from the rapid evolution of technology, creating a mismatch between required skills and outdated educational curricula. This global challenge is further compounded by intense competition for talent among tech hubs and high turnover rates within the industry.

Addressing this gap involves multifaceted efforts. Coding boot camps, upskilling programs, and online learning platforms aim to quickly equip individuals with relevant skills to meet industry needs. Additionally, companies focus on investing in the training and development of current employees and fostering diverse talent pipelines to bridge the divide between demand and supply in the software engineering job market

Why do tech salaries don’t go down despite layoffs?

Tech salaries often don’t go down despite layoffs due to several reasons:

  • High Demand for Skilled Talent: The tech industry consistently faces a shortage of skilled professionals, and this demand-supply gap persists even during layoffs. Companies need experienced engineers to maintain and innovate their products, driving competition for top talent and sustaining salary levels.
  • Critical Role of Technology: Technology is crucial for businesses to stay competitive and innovative. Layoffs might be a strategic move to optimize operations, but companies still require skilled tech workers to support their core functions.
  • Specialized Skills: Many tech roles require specialized knowledge and expertise, making it challenging to replace experienced professionals quickly. As a result, employers are often willing to pay premium salaries to retain and attract skilled engineers.
  • Shortage of Qualified Candidates: Layoffs might be temporary for some companies, and when they recover, they need to rebuild their workforce quickly. The limited availability of qualified candidates can lead to bidding wars for top talent, driving salaries up.
  • Innovation and Growth: Tech companies understand that investing in their workforce, even during challenging times, is essential for long-term growth and innovation. Competitive salaries help maintain employee morale and attract the best minds in the field.
  • Industry Competition: The tech industry is highly competitive, with companies vying for market share and talent. Even during periods of layoffs, companies want to position themselves as attractive employers, which includes offering competitive compensation packages.
  • Company Reputation: Maintaining competitive salaries, even during layoffs, helps companies protect their reputation as desirable workplaces. Drastic salary cuts can lead to negative perceptions among potential hires and the industry at large.

In summary, the combination of high demand for skilled professionals, specialized skills, competition for top talent, and the enduring need for innovation in the tech sector collectively contribute to the resilience of tech salaries, even in the face of layoffs.

Salary trend for various tech roles

 

India vs USA — Salary Trends

 

Salary growth rate(%) over last 5 years

 

Salary Benchmarking Report 2023 — India

PS. Want to share something —
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-Sukant Kumar

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A seasoned entrepreneur’s insight prompts reflection on startups straying from market realities. In this blog, we explore the practical aspects of addressing demand-supply gaps, the imperative of engaging with the real world, and a nuanced understanding of funding for scaling innovations.


Building with Purpose

One can easily get swayed by the delusion in the fancies of funding, raising capital, and focusing solely on valuation rather than value creation. In general, businesses tend to fail with that approach.

Successful entrepreneurship hinges on purposeful solutions that fill genuine demand-supply gaps. Thriving startups authentically respond to real-world problems, ensuring their offerings align with market needs.


Engaging with Reality

“Stepping into the real world” is our immediate call to action, urging entrepreneurs to immerse themselves in tangible audience needs. Comprehensive market research and direct user engagement foster solutions that organically resonate.


Survival vs. Scaling

Funding should ideally be a strategic resource for growth, not a survival prerequisite. A robust business model, independent of constant funding, reflects a startup’s resilience and genuine demand.


The Exception

We do understand that while most businesses can shift focus on value creation and thrive, some exceptional technologies may require resources to kick-start.

Groundbreaking technologies, like ChatGPT, may require substantial resources. While not universal, this exception highlights the importance of discerning the startup’s nature and funding needs.


Conclusion

In the dynamic startup landscape, relevance and impact demand a pragmatic approach. By addressing real demand-supply gaps, engaging with the real world, and nuanced funding, entrepreneurs can navigate with purpose. Building businesses that matter is about leaving a meaningful imprint by providing solutions deeply rooted in authentic needs.

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Why Hiring an Extended Team Can Catapult Your Growth?

In the fast-paced world of tech, the revolving door of developer talent has become a prevalent challenge for companies aiming to build robust in-house teams. With the median time developers spend at a company just over one year, it’s time to rethink traditional hiring strategies. In this blog, we explore the drawbacks of sticking to the status quo and advocate for a game-changing approach: hiring an extended team to leapfrog competition, accelerate product development, and minimize opportunity costs.

Embracing Change:

The traditional model of investing time and resources in building an in-house tech team, only to witness high turnover rates, is a costly affair. Instead of running marathons while still figuring out how to walk, businesses should consider a more agile and strategic approach. By embracing change and hiring an extended team, companies can navigate the challenges of talent retention and maximize their potential for success.

Opportunity Costs Unveiled:

Building an in-house team demands time, effort, and significant financial investment. However, the risk of losing millions in opportunity costs becomes apparent when developers, on average, switch jobs every year. Waiting for the perfect cultural fit can further delay progress and hinder growth. It’s time to prioritize results over cultural nuances and opt for a more pragmatic hiring approach.

The Extended Team Advantage:

Hiring an extended team offers a solution to the pitfalls of the one-year turnover trend. This model allows companies to tap into a global pool of skilled professionals without the need for a lengthy recruitment process. By collaborating with seasoned experts who have already demonstrated their commitment and expertise, businesses can fast-track product development, scale efficiently, and, most importantly, reduce the risk of losing valuable time and resources.

Leapfrogging the Competition:

In a landscape where speed is often the key to success, the extended team approach becomes a game-changer. Rather than investing months in assembling an in-house team, companies can leapfrog the competition by swiftly onboarding an extended team. This agile approach enables businesses to focus on what matters most — building and scaling their product — without succumbing to the pitfalls of prolonged hiring processes.

Conclusion:

In a world where change is the only constant, businesses must adapt their strategies to stay ahead. The one-year turnover trend among developers is a clear signal that the traditional in-house hiring model is no longer the most effective option. By embracing the extended team approach, companies can minimize opportunity costs, accelerate growth, and leapfrog the competition. It’s time to shift the paradigm and build a tech team that propels your business forward. Don’t run marathons when you can leapfrog to success!

PS. We can help. Let’s talk. Link to my calendar — https://calendly.com/sukantk/talk

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The Counterintuitive Art of Raising Funds from a Position of Strength

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The Right Time is Now: Seizing the Moment

The ideal time to raise funds for your startup is when you have a combination of factors working in your favour:

  • Adequate Runway: A healthy runway, the amount of time a startup can operate without additional funding, provides stability and allows for strategic decision-making.
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  • Strong Relationships: Cultivated connections with potential investors foster trust and understanding, increasing the likelihood of favourable terms.

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Are you raising money or looking at how can you leverage tech to do so?

Let’s talk? — https://calendly.com/sukantk/talk

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