WOW. This is timeless information and has changed my attitude on working for smaller companies and possibly the government. While it would be awesome to work with the brightest on the most interesting projects, the total compensation isn't that appealing. I come from peanuts, so any of these salary ranges would be life changing. And with work from home gaining traction, perhaps the local companies will provide a better work-life balance than Big Tech's Willy Wonkaesque tech parks. Like you alluded to at the end, the best part is probably being part of a global team working around the clock on a project that will change the lives of people immediately. Thank you for posting this information.
Yes, you're right that there is no one "best" choice (given the opportunity to work at different types of companies): only best for your specific situation. I have friends who value flexible work, a supportive and extremely low-stress environment far above a baseline compensation, and are happy at #1. #1 places already tend to pay very well for a job that you can do with flexibility, and (these days) even remotely. I also know people who are in the stage of their lives when they want to "go go go" and work very hard at #2 or #3 companies and like the nature of the work. Remote work will change the market a lot, I'm very certain. Let's hope it's for the better!
"While it would be awesome to work with the brightest on the most interesting projects, the total compensation isn't that appealing." That tradeoff doesn't really exist since those people typically work at #3 to begin with.
If you are talented, but just starting out, there are a couple things to keep in mind. 1) 1 year experience is about the same as one year education (but the former pays better!). This doesn't work for specialized areas unless that is specialized experience. 2) After you get your foot in the door, then you have to focus on ability to think, ability to deal with things not working, presenting your code in a professional style (how many interviewees jump directly into writing code without creating a function prototype that clarifies inputs, outputs, and what they are trying to do?), and "soft skills", but only in the context of communicating to solve the problem - not small talk. One of the best interview questions to prep for is "What did you do for a big project? ... Oh, really? How did you do that? [5 levels of random drill down]". If you were on a project and made the difficult decisions you will do well and if someone else wrote the code you won't understand any of the why's.
TBH, when you reach a specific salary amount you stop worrying about getting more money and you prioritize the quality of life you can have whike working for that company (work-life balance, stress, working hours, etc). The most important information on this video was the last slide, mentioning these points as well. Great video!
I guess you can say when you have what you need, and can save & invest enough, any extra compensation becomes just a number
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If money doesn't make you happy, you are spending it wrong. You are right that the more money you have, every extra Euro gives you less satisfaction (eg compared to an extra minute of leisure). But it never counts for zero.
@@Aaron-kj8dv That will be highly dependent on the living expenses of where you live and work. I'm sure there's a way to take that into account to get somewhat equivalent measures for different countries/cities to see what level each of those regions would land at.
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@@Aaron-kj8dv I remember that paper. Their numbers didn't actually show that. Their numbers are fully compatible with a simple model of assuming money has roughly logarithmic utility.
I worked at Amazon and was surprised by how low the salary was versus the jobs I was offered elsewhere. In fact, working there helped me because it allowed me to ask for much more when I left, because of the illusion of what subsequent employers imagined I was earning while being overworked and underpaid in a tech role at Amazon.
@@MrMMohsen No they didn't - there are so many people queueing up to work there they don't need to. Also, there's a clause in your contract that if you leave before the year is up, you have to pay back your signing bonus, a significant proportion of your first year's take-home. So, in effect, if you leave for whatever reason, they've just had a 20% discount on you.
lol using good old "what other people think",image,perception to your advantage. Sadly that is dominating in worklife, be it choice who to hire, how much to pay etc.
Really nice video, and I can confirm that what you said about the type #1 companies, I currently work in Germany and our company generally pays less than other places, but we have amazing flexibility in work ours and you can adjust your schedule based on any kind of personal reasons you might have. Also something to look at (especially right now) is how the company treats their employees in times of crises. One of the departments in our company lost all their clients due to the pandemic, but instead of firing everyone, the company spread them among the other departments until they get back on their feet, it was one of the most respectful things I have seen from a company!
Yep. #3 companies are usually quick to lay people off. Source: I was on the ground when Uber cut 20-25% of engineering, a month or two after COVID started.
Espana es un pais tercer mundista en cuando hablamos de oportunidades para gente altamente cualificada. A no ser que tu papa conozca a alguien es muy dificil llegar a ganar algo. Yo vivo en UK y aqui hay mas oportunidades
@@sergiohuanca4812 According to the statistics I saw, Switzerland is actually one of the most affordable countries in Europe. Yes, most expensive by a significant margin, but the compensation more than makes up for it. Paying 2x higher costs while making 2x as much money is actually really good, because your "free income" also goes up 2x. And the relative income differences in Switzerland are higher than the relative cost differences, so the free income increase is even more pronounced.
@@eigenb6455 Let's say, cost of living is very predictable in Switzerland. No sudden jumps in your rent. No unexpected health cost. Company will not fire you in a whim.
I would argue those companies are in the #1 bracket at most markets (aiming to pay the same level as other hyperlocal companies) - perhaps in some markets they are closer to the top of the #1 range. The point is, they only want to hire from the local market, and do not target the very best on a local market (even if they do, they are not willing to compete with #2 companies in compensation). From the data I have they issue no stock to software engineers (even though they are publicly traded) and bonuses are also rarely tied to performance and are not outsized. But work-life-balance, from what I’ve heard, is usually very good at those places and there are lots of other perks.
@@pragmaticengineer Great answer! I agree, there is quite a great work-life balance which compensates for the absence of bonuses and slow career progression (some people work there even for 10-20 years). I guess, this is the way how companies like that solve the problem of the low-margin high-tech business, where thousands of engineers and a lot of investments into R&D required but ROI is slower and riskier than in flourishing FAANGs. Also, I just got an idea, that such companies have both #1 and #3 types at the same time. One can be an ordinary engineer of a #1 type, but once upon a time one can break the barrier and get a #3 responsibility and accordingly a compensation. This leads however to a strange inequality within one company and therefore even sort of social tensions (!).
You listed true engineering companies. Many of those have a weird behaviour where someone who can only code may be offered a high salary, but people who understand many things in addition to software development - the people who can do the deep technical systems designs, develop hardware, understand communications theory, and so on - either get a low salary or hide their real capabilities and get a higher salary. Its a bizarre world.
@@pragmaticengineer It's obvious that those old megacorps have zero innovation but adapting to the change in EU norms. So yes, good life balance and low stress because nothing happens.
Can confirm - the situation is the same in the US. I had four jobs in the past two years. First job $45k, second job $70k, third job $95k, fourth job $300k+. I literally experienced the entire salary distribution.
The insight I've been looking for years! No bullshit, no understatements, just first hand informations. Looking forward for more from you and thanks for what you have shared already.
I went freelancing to break out of the 2nd tier salary. I'm in the beginning of the 3rd tier now. But companies can get rid of me in 2 week without reason. But I have to deliver for what I earn. Still can't believe that I earn the same as a Doctor or a Lawyer. I trained myself. Crazy. Entering the IT industry was one of my best decisions in life.
@James Williams My current client sits in the UK but the last I did compare against German doctor/lawyer salaries. Yeah, you are right. There is a spectrum of salaries for doctors and lawyers, too. A high IT-salary can't compete with high lawyer-salary! Only high IT with low lawyer/doctor.
It's funny that you uploaded this video just a day before I got an offer from SAP, Germany. Thanks to your stats, I was able to negotiate my salary and get a higher number. Normally, I would have just gone with their initial offer just because its from SAP :D Thank you!
In the US, teamblind exposed me to the realities of compensation in software. FAANG companies and similar pay multiples over what glassdoor / paysa report. Openly sharing total compensation is transformational
The article on equity is one the most comprehensive and well-written articles I've ever read (across all domains). Thank you for your work and keep it up!
I can confirm this. I worked in Munich for a Big Tech company and even my base salary was 1.5x higher than the high local salaries. I was kinda embarrassed to tell my friends about it.
This is pure gold. I haven't seen such great modeling of the current state of compensation in Europe, concise and clear, very informative and to the point. Great job Gergely! Keep it up!
I didn't even know about this tri modal thing. It fits my previous experience though, and remarkably when I last changed jobs after redundancy I landed a group 3 job almost by accident because the company was taken over the day after I got hired but they were hiring under their old criteria. For the first time in my life I really lucked out. I have no clue if I can stay at this level but I'm still there after 5 years.
Thanks for making this, as someone from the Netherlands just getting into the industry this is so insightful, all the data I can find about SWE salary is focussed on America. Kinda feel like here if you try to strive for a big salary you're quickly looked upon as greedy, talking about what salary you get feels more taboo which I think is lame Lots of other really insightful content on this channel as well, I think you're gonna blow up soon!
If this is your first job, just accept whatever salary as long as you use technologies that you want to specialise in. After your first job, do not hesitate to ask for a big salary. If you don't ask nobody will offer you for sure. It takes grit and self-esteem but you can make it easily in tech!
@@cooltigermusic Yeah I definitely took care to look for a place that cares about growth of their employees and while the salary isn't big engineer money, I definitely feel like I'm surrounded with people with experience and who are willing to teach me through code reviews etc, that's definitely more important for now I feel It's not gonna be easy but definitely gonna do my best and see where it takes me Thanks for the encouraging words man!
The main factor of such disproportion of salaries is the same as in every job market in the world:The wealth of the country in which you try to apply for a job. Not all countries in Europe has the same economic system and sometimes it matters more than the willingness of your boss.
My company has an office in Krakow which I believe pays very competitively, and I am extremely impressed at the caliber of engineers there. This was considered an outsource from our US offices, as is our dublin location. Even paying higher end of these salaries it is much less than the compensation for US software engineers.
Yeah anglophones tend think that they are the best in everything. But with their inflated salaries I prefer to hire rockstar polish, colombians devs (who are in many cases better)
@@felipe4477 The problem is that some Polish rockstars are not always good team players. It's often a tradeoff, but for some companies it might be fine anyway.
@@CrYpt001 It's the culture thing. Starting from the primary school people are ashamed of asking questions, while even those considered stupid are sometimes quite relevant. I've seen many teams myself that consist of several experienced people that can't or don't want to share their knowledge. I've also seen ppl being reluctant in task automation being afraid that they lose they job if their work smarter. Not to mention rockstar-like devs being straight assholes to juniors. First thing you can learn working for a foreign company is the level of respect that seems to be hard to achieve among Polish nationals. Although not impossible I believe, but my experience does not confirm that.
I'm on a #3 company but I'm small fry with low experience and it's like a golden cage where it's not easy to grow professionally because the product is very crystallized already. On the other hand, my country's job market is a mess and the salary is not bad for a 3-year experience dev.
Thanks, good work!! Too little TH-cam channels focus on the European software engineering scene. Thanks for sharing the insight, you just earned a subscriber!
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This came up while I was reading the blog post. Awesome timing!
This is a fantastic video and blogpost, and it applies to Data Science also. Last year I moved from a Tier 3 company in roughly the 3X bracket of your third mode in London, to a Tier 2 local in a smaller city. You've hit the nail on the head in terms of how compensation changes across the modes. I also liked how you tied that back into pie-chart of "success". I for one have massively increased the free-time/disconnect-from-work/flexibility in lieu of total compensation, but the peace of mind and mental health that affords is infinitely worth it. Professionally, working for Big Tech was amazing - working with insanely talented individuals and learning through osmosis. However, the higher intensity working is not for everyone as you point out.
Nice one recognizing them! Most of the books on my shelf are listed on my reading list: blog.pragmaticengineer.com/my-reading-list/ When I'll have time, I'll do a review of a few of my favorite ones (both of these are favorites of mine).
I had a great job as Global Lead technical developer for a big oil contractor but we got taken over and then the oil crash came and after a couple of really stressful years I was made redundant. I quickly got another job locally on about 90% of my old salary and now I'm leading a much smaller team and enjoying every minute of it. There is life after Big Corp. Luv and Peace.
As an American Dev Engineer going from the American salary too European salary, I find start up's pay the highest range but still nothing close too what I was getting in the US. However, the cost of living is way cheaper and of course Healthcare is way cheaper so I actually net more money in Europe when all is said and done.
A perspective from the Sillicon Valley market: I think the market here is also tri-modal, but I think I'd describe them differently. You have the local IT jobs (medicine, finance, etc), then you have the tier-2 software companies and startups, then you have the the top tier companies (mainly FAANG). FAANG are highly competitive, but the second tier can be even more stressful - it just depends on the job. Startups especially can be all-consuming and tend to pay more in stock that may never be worth anything.
I agree, but the distribution is more like this fake start ups (early stage or not really legit start ups)/local IT jobs real start ups and non tech companies where tech is not their primary concern FAANG and other top tier tech companies Finance In fake start ups and local IT jobs, you are paid less for the lower qualifications needed and or the ease of the job itself. In more real start ups with a real tech based product and non tech companies with engineering divisions of some substance, you are rewarded more handsomely and are also expected to do more. The former also pays you with options/equity that could amount to nothing in return for your blood and sweat, and the latter affords you a leisurely life in bureaucratic hell. FAANG and other top tier tech companies pay very well. The former is harder to get into due to their prestige, but usually involve have less work to do because their primary concern is not breaking their very good products rather than innovating. The latter pays competitively to try and draw the same talent, but usually expects more work out of their talent. Finance actually pays the best out of any of the above industry but expects the most out of you. This means 12 hour workdays with 4 hours of market research after an 12 hour zoom call. (I say this with friends with this exact work schedule) This is because in finance if your model of the market is better than every other firm, you can leverage this to easily multiply neigh infinite wealth. This means that grads straight out of college can make sometimes 300-400k working for companies like Blackrock/Jane Street etc.
Another class would the ones that are self-employed. I worked on a project in the Netherlands in 2019 and the self-employed senior engineers were making €240k a year. This was not at an international company and their rate was pretty standard (at least according to them).
Well... self-employment "salaries" are not comparable to classic employer-employee salaries. Being self-employed, you are employer and employee at the same time. That means in order to achieve a reliable income for you as the employee, you as the employer need to build a strong business case that makes you independent of market/project fluctuations while also having to pay extra cost that comes with having employees in the first place (company taxes, paying into social funds, ...) If you must compare salaries in this way, I'd propose to compare the €240k you mentioned to the common price for leasing employees to other companies, rather than comparing against that employee's wage. While still not fully comparable, this is at least in the same ball-park. edit: typos fixed.
I work for tier 3 company in Europe, an I find these observations about 3 tiers very accurate. Also, the part about different priorities is great. This seems undervalued, the common goal to success seem to be to go up the ladder and earn more, but people are different and stages in life also play a large role.
I am a student in a school for software engineer. I'm half time in school/half time in a company. I work for a state-owned company and compared to the work given by other companies of the students of my class I am very happy to be in a public company. They give me time to experiment, to learn, I would like to find this relaxed attitude in my next company. I also prioritize my free time more to pursue my own development. Thank you so much for this video, I'm going to save it in order to find a company when I graduate and I'm going to share it with others at my school.
Really nice video. You're right there's not much transparent information about these kind of things out there. Work life balance and compensation wise I definitely prefer consulting at the tier 3 firms but you need to have established some strengths first to get rolling and make sure you do mostly things that make you grow.
Another great video, Gergely! Can you please share some more of how your typical day was when you were handling that high pressure Uber project? I would love to hear on how tough it is on a daily basis and what it means to be a "senior" software engineer or a manager at Big Tech companies. All we hear are how great the salaries are, and what it needs to prepare for the interviews but most videos or conversations never talk about the hard work and the grind one needs to put in to survive and thrive at these places which is what one needs to do day in and day out once they get their foot in.
This is a nice perspective ... but ⚠️ if I may give my 2cts: Working in a small European startup can also be demanding in terms of work-life balance. Sure you're not loosing 100k/minute of downtime, but on the other hand you do have the pressure of trying your best to make the startup succeed, otherwise the startup might simply disappear all together 😅.
Yes, agree most startups can be hectic at times, and some are outright stressful. When you have skin in the game (= equity on top of a fair salary) and you can win big if the startup wins big this is totally fine. I do see startups push people to the limit who give zero equity and below market pay as “we’re a startup.” Not if you don’t compensate the risk and pressure with something you’re not is my response :)
Wow..for 2nd time in under 2 weeks youtube algo showed me what I didn't search for but needed👍 The AlgoGod has gained sentience... Let's all follow the Swedish...n run for the bunkers with canned foods etc
There is no transparency in the USA for software engineer salaries. Not only do companies encourage employees not to share that information with collogues, but there is also a cultural stigma for talking about money in general (hyper competitive culture where you are either shunned for making more or seen as a braggart). If you also factor in that many companies do not use industry standard titles (I have worked at a few companies and each one had a vastly different job title for the same position): It becomes very difficult to determine how much you are worth, as it is difficult to find direct comparisons. Lastly: When you look at aggregated data, such as that provided by Glassdoor, you often have pay gaps of over 100K for the same role. It is extremely difficult to determine what you are worth as a result. It is almost a requirement that you job skip every couple of years, and keep interviewing even after you have a job, in order to see what is out there and climb that pay scale. My experience shows me the best way to make money is find a startup that provides equity, but this is typically only an option for those early in their career that can afford to make a low salary in the hope that they see a big payoff during an IPO. For those of us with families, this type of high risk is not as viable without much more sacrifice; We often opt for lower paying jobs that have stability and a good work-life balance.
With more and more companies hiring remotely due to Covid-19 (and realizing that this model actually works) more companies will move into the regional mode that were previously not competing with external markets. Overall, this is likely to reduce the supply in the lower modes, increasing the average salaries.
1:45 Amsterdam companies have above average compensation relative to other Dutch regions of course it's useless because you lose it all on rent and other cost of living expenses there are probably also much more 2nd and 3rd tier jobs in Amsterdam than in most other regions, but I think even the 1st tier jobs compensate for the higher cost of living to attract talent
The thing about equity is... read the fine print. If you work for a private company, you might need to ask permission to be able to sell shares. And in my case, the company I worked for didn't even honor the agreement when I left, leaving me without the shares I had earned. That were worth about 50% of my annual salary. I probably could've sued but... a) suing in the US, as a foreigner - I doubt it would be fun b) I didn't want to hear or think about that company any more. Worst experience of my professional life. Showed me that a high rating on Glassdoor means nothing.
Very informative. The trimodal model is definitely an excellent shorthand model. Its matches up to my own suppositions and theories about pay rates. The only other axis i would throw on there is if the company makes money from technology. If their profit center is reliant on technology they will pay more for tech workers. Its kind of a obvious statement but really important because its how the C level on down views the importance of tech.
@@pragmaticengineer thanks! I cant claim credit for that observation though. there is a guy on Reddit who broke it down and why he changed companies and persued employment with AWS after his emoloyer said they dont have any more money for raises for him, iirc he was not Dev but IT. The national grocery store chain he worked for had a similar headcount to AWS but was making, again paraphrasing, 1/40th of the money AWS was making. His overall thesis was unless there are other overriding factors you should always persue employment at companies whose profits are directly tied to tech. Again its a very, "well obviously" statement. The viewing IT just as just a cost center is something that I think will take anouther decade or two to get out of C levels heads. I work in healthcare IT and during covid most hospitals cut 20 to 70% of their IT staff. Usually starting at the top. The hospital recruiters and headhunters I've talked to said its been "fun" talking to the C levels and trying to get them to understand those folks left nasty warning reviews on all the IT websites, have warned off IT workers about the industry in genral, and are now gone and employed elsewhere in other industries. Competition for talent outside their industry is something american hospitals are entirely not used to. A past CEO upon hearing our network admin eas leaving asked ," did nearby $rivalhospital1 poach him?" Then looked really surprised to hear a celltower company 3 states away hired him Hospitals in the US are a weird case of your Mode 1. Its a siloed industry. Nurses, Radiology Techs, Drs, et cant really go work in other industries, just other hospitals. So the fact that they are in competition with almost every other business for IT talent is mental hurdle a lot of hospitals have not cleared yet.
Same story, as a junior software dev I've been paid initially 700€/month or 8k€/year at Accenture. That was in the third biggest city in Poland. When I moved to Germany I've started earning the mentioned "European" wages. Probably a move to Warsaw could pay off, but the work env would be more stressful than other central European towns. Now I'm doing 82k€/year in Germany and I've got pretty decent work-life balance.
Good info, thank you! Any information to help tech professionals wade through the absolute, total mess of recruiting (at least in the US) is appreciated!
I work in an international corporation and noticed a security expert vacancy located in China. Internally the job was advertised with a compensation of 400 k€ per year which sounded exceptional to me.
Hi, I think you have a good contribution and overall you're filling something that quite unknown to people for a greater good. I suggest you fortify your arguments with more numbers, and adopt a quantitative approach. Best.
I’ll have to make a video on this at some point. I don’t think YoE is as important as many people think. It matters up until a few years (say, 5 or so), but after that your skills and experience matters more. In a great engineering culture, with strong mentorship and role-models, someone could grow more in 3 years than someone else in 6 years in a place where all they do is firefight. Eg at Uber I knew an engineer who was at the (difficult to get to) senior level and was mentoring incoming engineers with 10 years in the industry, who were not used to a fast-paced culture.
@@pragmaticengineer I have a problem with that fast paced culture concept. I've seen it too often used as an excuse for rushing things and not doing proper engineering. Of course, software is all about iterations and incremental improvement, but the goal is delivering working software, not iterating so fast that your head starts to spin.
Great video! Would be nice if you would mention the freelance options, too. In the Netherlands, being a mid level developer you can land a contract with rates from 80 to 90 Euros per hour. This roughly translates to 12.5 to 15 grand a month. Be careful, this doesn't include vacation or sick leave. If you're off work for any reason, you simply don't get paid. All in all, with quite limited experience you can get to the beginning of your definition of tier 3 without the crazy competition. Finding such positions is mostly a matter of filtering through a sea of recruiters talking only to those that hire freelancers and discarding everyone else.
Yep, I'll add in information for freelancing when I'll go into detailed NL numbers. I've never freelanced myself, but have some data and know friends who do this successfully (and happily).
@@karengrigorjan2777 Quite a significant portion (The Netherlands has high taxation but very high quality of living) but usually actually less than when making the same as a regular employee. You would likely end up at somewhere around 40% taxes over that income.
@@karengrigorjan2777 You'd need to look at the total income for a year and the tax brackets, then split the total into each bracket. Freelance work can also be very inconsistent, so you'll get 15,000 for 3 months then nothing for a month.
Can you do a list with all these tier 3 companies in EU? I would move to another country only for a tier 3 company so it would help me filter a lot of jobs when I will be looking for one
The tax system basically means that paying higher salaries is a very inefficient way to compensate people. Once you get to the higher rate tax bands you compensated by way of bonus and stock options.
What an amazing channel, how do you have only that few subs? Definitely won me over, I'm sure this channel will explode over the next months and years, if you keep up this great content. Best regards from Berlin
Thank you for sharing these info ! I just discovered your channel and learnt a lot already ! I was wondering though, do you think these salary ranges are also applied to Data Scientists ? I know your channel is all about SWE as that’s your expertise, but i am asking because I can’t find resources similar to yours about Data Science hiring in big tech in Europe. Would love to hear your thoughts that could be a great video idea for the Data Science and Machine Learning folks who follow you. Thank you very much ! 🙏
At Uber, the salary ranges for data scientists were 100% identical with software engineers. Salary dependent on the level for these engineers. So I'll wager that at #3 type of companies, this is the case. I can't be fully definite about #1 and #2 of companies. I have seen few data scientist salary submissions and they seemed to be in-line with mid-level engineer salaries. However, I won't be the definite source on data. My former colleague, team mate and first data scientist on my previous team, Oleg, is building nextround.cc for data scientist where he gives a salary estimate after people assess their own skills. It's pretty cool!
Don't fool yourself, big salary means lots of pressure, tight deadlines, long hours (not year round but there are always several crunches a year(70-80hr weeks)), getting mega frustrated when others aren't pulling their weight.
Definitely true. When people with high salaries don't deliver high quality output , they often dont survive long in the company . No matter what the job , unless you deliver more value to your company than your salary, you won't last too long
#3 does not exist in Hungary or it's very well hidden, I have no info about extremely high salaries (other than a few exceptional cases on a personal basis) even though I have contacts to the biggest IT minds of the country. Many people in the #1 group are still in denial about how much the #2 earns and it's really funny.
Hungary for the last 150 years has been world famous for producing great minds that make great scientific breakthroughs.... just never IN Hungary. #3 are companies that compete on the top on the global level. Who wants to start a company like this in Hungary (or may start it but then better resettle to a better place. Vienna is just up the river). Your current government doesn't help much on that issues.
I think in your form asking for salaries is important the city as well. Is not the same earn 40k in Barcelona that is a "high salary" only given to people with roles, where you need to put 50 or 60% of those earnings in rent a flat or commute 1 to 2 hs. Also would be good to check how much of the salary goes in taxes in each place, because here in spain for a 40k you pay about 40% on taxes so there is that, and the employer is paying for you also a 30 to 40% above. I currently unemployed after a burnout, all the companies I can find here that work in english are type #3 but paying shitty salaries, using the little saves I got to fix myself.
There is a problem that you didn’t mention: a lot of the companies in Europe (I assume also true in US/Can) have started opening secondary HQ in India and Eastern Europe, so when a person in your team leaves, they open the position in their secondary HQ as this lowers the cost dramatically. It is becoming more and more evident this will be detrimental for career opportunities in the primary HQ.
Eastern Europe salaries are not all that different than what we've seen here - 50k for a senior developer is now a standard here in Serbia. The main difference why companies chose to outsource is that best and brightest here are becoming software developers since it pays so well, best and brightest Amsterdam for example are into medicine and economics.
No this is not a major problem. I have been in this industry for 25 years and despite all the out-sourcing and near-shoring going on I never had an issue finding a job and getting paid well. There are more IT jobs and more well paid IT jobs in Europe than ever. If you DO feel impacted by said out-sourcing example then there is something seriously wrong with your skill set. Let's say, your skill are to "narrow". If you can only do ONE thing well and that things can be easily described, easily checked and easily trained than indeed you have a problem.
I've seen some software companies which they demand: 1 - You should bring your own pc to work at office. They don't pay for the gear and expect that you'll buy it with your own money. 2 - No perks 3 - No compansation 4 - No benefits 5 - No parental leave 6 - No extra money for your extra time 7 - Expecting you to work at weekends 8 - Paying just a little above minimum wage regardless of your experience and value.
Yeah. If UK companies will go this way - many Devs will look for a job elsewhere. O think this is starting now as salaries don't catching up with inflation and cost of living
I kind of always assumed this information is self evident and trivial. You can extend this to various types of positions at a company depending on whether you are working in a cost center or on improving the product. It is very difficult to convince anybody in a cost center to pay you salary that is higher than their current established brackets, no matter how good you are. Whereas if you can show you are somebody that can directly positively impact the product all brackets vanish and you get to actual negotiation.
Very insightful! I have a request. Do you mind making a video on technical program management and how software engineers work with them? I'd also like to see you make videos on product management.
Just moved to the US from Italy, Italy has a really bad salary and TC. Usually entry-level(0yoe) is 25k to 28k for the better companies e.g. bending spoons or startups. I worked at a startup and made 30k with 1yoe. The only time I saw Equity was in that startup but was only available for senior staff positions (aka about < 10 people at the time). I've seen good companies underpay a senior who is basically unfireable with ~50k.
Good example. I have (temporarily) worked in numerous countries around thew world. Italy is second only to Japan in underpaying its IT engineers and discouraging (most) smart people from entering the industry. Every good Italian IT guy I know works in Switzerland (exaggerating).
@@chaotic-voices-in-my-head My only experience with Germany is a close friend of mine who worked for amazon and made closer to 60k iirc. Faang always pays higher but 27k seems way too low. Are you in a major city?
@@Metruzanca It´s not like a major city like Hamburg or Munich, but also not so small. The car industry is strong there. I work remotely and luckily my rent isn´t so high currently. I couldn´t afford to live in a bigger city.
Really insightful video, thank you. I believe I am in the #2 company in NL with great work-life balance. Have you found big differences between technologies / stacks? JS, Go, Python, Java, C++, C#, embedded C, etc.? Or it doesn't matter that much as good engineer can adapt?
I've not found real differences. Every company uses different languages / frameworks, but engineers pick it up quickly. The complexity of systems is usually harder to grasp than pick up yet another language, in my experience.
A bit skewed...at least in America everyone in your Big Tech range basically gets up to 3-400k after a few years and a significant number get up to 700k+ TC if they grow the scope of their work. With everyone at these levels having a base salary above $200k & generally people are comfortable enough to spend the rest of their careers in senior/staff positions after essentially “automatically” rising to the senior level. &you can get a slightly higher salary in emerging / hot technologies within these companies combined with the fact that it’s easier to rise to higher level roles on a growing project even though it still takes a good bit of luck to position yourself to become a staff engineer+. ...also startups hiring people away from these companies exclusively which often kills individual career growth for a significant pay bump.
If you put entrepreneurship where you make 100k or more per year on your software products, into the measures of success you shared, it's pretty much 100% in all fields, outside maybe the company brand.
So, this is about salary if you work for a company as an employee. As a freelancer, you'll earn 2x to 3x the amount of money, even if you don't work for the tier-3 companies. I've been a freelance senior software engineers for the past 12 years. Starting as a freelancer was the best decision I ever made in my career. Of course, as a freelancer you'll have to take care of everything yourself, including saving for retirement, insurance etc. so you'll also have a higher cost, but you'll still have much more money than when you work as an employee.
I have to take care of those things myself anyway. But at the same time the majority of freelancing doesn't pay better overall while it comes with greater instability.
@@ian1352 It probably depends heavily on what work exactly you do as a freelancer. For me as a software developer working full time as a freelancer, and in the location / country where I'm at, it pays a lot better than being an employee. But that's indeed probably not the case with all freelance jobs.
I admit I'm a bit surprised. I had assumed Europeans tech salaries were a lot lower than US ones, but in fact they're only somewhat lower when you take the #3 group into consideration. Also, maybe he mentioned it and I missed it, but the #1 way to get your resume noticed at a big fancy tech company is to already know someone who works at that big fancy tech company. Networking is crazy important. Keep in touch with your colleagues. If one of you make it to a desirable company, it can make it considerably easier for the rest of your gang to at least get your foot in the door. After that, you still have to be good and survive the interview.
I'd say between 10 and 15% lower in terms of total compensation package? I think in the end when you take into account the lower cost of wellfare in europe, you end up with probably around the same amount of money in the end.
This video is about the top tier locations in Europe. Netherlands, Paris, London, Southern Germany ( The blue banana - google that). Salaries are lower elsewhere.
WOW. This is timeless information and has changed my attitude on working for smaller companies and possibly the government. While it would be awesome to work with the brightest on the most interesting projects, the total compensation isn't that appealing. I come from peanuts, so any of these salary ranges would be life changing. And with work from home gaining traction, perhaps the local companies will provide a better work-life balance than Big Tech's Willy Wonkaesque tech parks. Like you alluded to at the end, the best part is probably being part of a global team working around the clock on a project that will change the lives of people immediately.
Thank you for posting this information.
Yes, you're right that there is no one "best" choice (given the opportunity to work at different types of companies): only best for your specific situation.
I have friends who value flexible work, a supportive and extremely low-stress environment far above a baseline compensation, and are happy at #1. #1 places already tend to pay very well for a job that you can do with flexibility, and (these days) even remotely.
I also know people who are in the stage of their lives when they want to "go go go" and work very hard at #2 or #3 companies and like the nature of the work.
Remote work will change the market a lot, I'm very certain. Let's hope it's for the better!
"While it would be awesome to work with the brightest on the most interesting projects, the total compensation isn't that appealing." That tradeoff doesn't really exist since those people typically work at #3 to begin with.
If you are talented, but just starting out, there are a couple things to keep in mind.
1) 1 year experience is about the same as one year education (but the former pays better!). This doesn't work for specialized areas unless that is specialized experience.
2) After you get your foot in the door, then you have to focus on ability to think, ability to deal with things not working, presenting your code in a professional style (how many interviewees jump directly into writing code without creating a function prototype that clarifies inputs, outputs, and what they are trying to do?), and "soft skills", but only in the context of communicating to solve the problem - not small talk.
One of the best interview questions to prep for is "What did you do for a big project? ... Oh, really? How did you do that? [5 levels of random drill down]". If you were on a project and made the difficult decisions you will do well and if someone else wrote the code you won't understand any of the why's.
Thank you for posting this excellent comment. 👍
@@SevenRiderAirForce Normally the really interesting jobs bleeding edge RnD etc pay poverty wages
TBH, when you reach a specific salary amount you stop worrying about getting more money and you prioritize the quality of life you can have whike working for that company (work-life balance, stress, working hours, etc).
The most important information on this video was the last slide, mentioning these points as well.
Great video!
I guess you can say when you have what you need, and can save & invest enough, any extra compensation becomes just a number
If money doesn't make you happy, you are spending it wrong.
You are right that the more money you have, every extra Euro gives you less satisfaction (eg compared to an extra minute of leisure). But it never counts for zero.
I think research shows it's about $70K/annual where the average person's happiness levels off
@@Aaron-kj8dv That will be highly dependent on the living expenses of where you live and work. I'm sure there's a way to take that into account to get somewhat equivalent measures for different countries/cities to see what level each of those regions would land at.
@@Aaron-kj8dv I remember that paper. Their numbers didn't actually show that. Their numbers are fully compatible with a simple model of assuming money has roughly logarithmic utility.
I worked at Amazon and was surprised by how low the salary was versus the jobs I was offered elsewhere. In fact, working there helped me because it allowed me to ask for much more when I left, because of the illusion of what subsequent employers imagined I was earning while being overworked and underpaid in a tech role at Amazon.
If I may ask, did Amazon at least try to retain you and offer more?
Where(!) did you work for Amazon? Was it customer facing or not?
@@MrMMohsen No they didn't - there are so many people queueing up to work there they don't need to. Also, there's a clause in your contract that if you leave before the year is up, you have to pay back your signing bonus, a significant proportion of your first year's take-home. So, in effect, if you leave for whatever reason, they've just had a 20% discount on you.
@@michaelrenper796 No it was in the Automation and Simulation department in Luxembourg.
lol using good old "what other people think",image,perception to your advantage. Sadly that is dominating in worklife, be it choice who to hire, how much to pay etc.
Really nice video, and I can confirm that what you said about the type #1 companies, I currently work in Germany and our company generally pays less than other places, but we have amazing flexibility in work ours and you can adjust your schedule based on any kind of personal reasons you might have.
Also something to look at (especially right now) is how the company treats their employees in times of crises. One of the departments in our company lost all their clients due to the pandemic, but instead of firing everyone, the company spread them among the other departments until they get back on their feet, it was one of the most respectful things I have seen from a company!
Yep. #3 companies are usually quick to lay people off. Source: I was on the ground when Uber cut 20-25% of engineering, a month or two after COVID started.
I guess, local laws also played a role here, afaik, firing someone in Germany is MUCH more difficult than in the US
In Spain we have many salaries in the hundreds... In the hundred euros I mean
Sounds crazy. Average Swiss salary is 7k per month
@@Fred-zt5ky What about the average cost of living in Swiss?
Espana es un pais tercer mundista en cuando hablamos de oportunidades para gente altamente cualificada. A no ser que tu papa conozca a alguien es muy dificil llegar a ganar algo. Yo vivo en UK y aqui hay mas oportunidades
@@sergiohuanca4812 According to the statistics I saw, Switzerland is actually one of the most affordable countries in Europe. Yes, most expensive by a significant margin, but the compensation more than makes up for it. Paying 2x higher costs while making 2x as much money is actually really good, because your "free income" also goes up 2x. And the relative income differences in Switzerland are higher than the relative cost differences, so the free income increase is even more pronounced.
@@eigenb6455 Let's say, cost of living is very predictable in Switzerland. No sudden jumps in your rent. No unexpected health cost. Company will not fire you in a whim.
I love the reminder that there are other (better) metrics for success. Thank you for putting this together!
There is also a class of huge global companies but with small salaries as Ericsson, etc
I would argue those companies are in the #1 bracket at most markets (aiming to pay the same level as other hyperlocal companies) - perhaps in some markets they are closer to the top of the #1 range. The point is, they only want to hire from the local market, and do not target the very best on a local market (even if they do, they are not willing to compete with #2 companies in compensation).
From the data I have they issue no stock to software engineers (even though they are publicly traded) and bonuses are also rarely tied to performance and are not outsized. But work-life-balance, from what I’ve heard, is usually very good at those places and there are lots of other perks.
@@pragmaticengineer Great answer! I agree, there is quite a great work-life balance which compensates for the absence of bonuses and slow career progression (some people work there even for 10-20 years). I guess, this is the way how companies like that solve the problem of the low-margin high-tech business, where thousands of engineers and a lot of investments into R&D required but ROI is slower and riskier than in flourishing FAANGs. Also, I just got an idea, that such companies have both #1 and #3 types at the same time. One can be an ordinary engineer of a #1 type, but once upon a time one can break the barrier and get a #3 responsibility and accordingly a compensation. This leads however to a strange inequality within one company and therefore even sort of social tensions (!).
You listed true engineering companies. Many of those have a weird behaviour where someone who can only code may be offered a high salary, but people who understand many things in addition to software development - the people who can do the deep technical systems designs, develop hardware, understand communications theory, and so on - either get a low salary or hide their real capabilities and get a higher salary. Its a bizarre world.
@@steveunderwood3683 Agreed!
@@pragmaticengineer It's obvious that those old megacorps have zero innovation but adapting to the change in EU norms. So yes, good life balance and low stress because nothing happens.
Can confirm - the situation is the same in the US. I had four jobs in the past two years. First job $45k, second job $70k, third job $95k, fourth job $300k+. I literally experienced the entire salary distribution.
Oh wow. Thanks a lot for sharing, Johan!
What was different in your job? Stack, programming domain, skill/standards?
he just trolls you :) Any proof?
because my is 500k + as senior dev, and it's funny why you taking so low
The insight I've been looking for years! No bullshit, no understatements, just first hand informations. Looking forward for more from you and thanks for what you have shared already.
I went freelancing to break out of the 2nd tier salary. I'm in the beginning of the 3rd tier now. But companies can get rid of me in 2 week without reason. But I have to deliver for what I earn. Still can't believe that I earn the same as a Doctor or a Lawyer. I trained myself. Crazy. Entering the IT industry was one of my best decisions in life.
@James Williams My current client sits in the UK but the last I did compare against German doctor/lawyer salaries. Yeah, you are right. There is a spectrum of salaries for doctors and lawyers, too. A high IT-salary can't compete with high lawyer-salary! Only high IT with low lawyer/doctor.
@@borntolose_livetowin where are you located yourself?
@@shvedas I used to work in the UK. Now I'm in Germany.
@James Williams We are talking about Europe. We do not overpay our doctors, let alone our layers.
@@michaelrenper796 No, you unfortunately severely underpay them. Which might be worse
It's funny that you uploaded this video just a day before I got an offer from SAP, Germany. Thanks to your stats, I was able to negotiate my salary and get a higher number. Normally, I would have just gone with their initial offer just because its from SAP :D
Thank you!
In the US, teamblind exposed me to the realities of compensation in software. FAANG companies and similar pay multiples over what glassdoor / paysa report. Openly sharing total compensation is transformational
Way better info than glass door. Glassdoor’s data is from a decade ago 😆
Glassdoor is site for employers. Their purpose is to low ball potential employees.
The article on equity is one the most comprehensive and well-written articles I've ever read (across all domains). Thank you for your work and keep it up!
I can confirm this. I worked in Munich for a Big Tech company and even my base salary was 1.5x higher than the high local salaries. I was kinda embarrassed to tell my friends about it.
This is pure gold. I haven't seen such great modeling of the current state of compensation in Europe, concise and clear, very informative and to the point. Great job Gergely! Keep it up!
I didn't even know about this tri modal thing. It fits my previous experience though, and remarkably when I last changed jobs after redundancy I landed a group 3 job almost by accident because the company was taken over the day after I got hired but they were hiring under their old criteria. For the first time in my life I really lucked out. I have no clue if I can stay at this level but I'm still there after 5 years.
Thanks for making this, as someone from the Netherlands just getting into the industry this is so insightful, all the data I can find about SWE salary is focussed on America.
Kinda feel like here if you try to strive for a big salary you're quickly looked upon as greedy, talking about what salary you get feels more taboo which I think is lame
Lots of other really insightful content on this channel as well, I think you're gonna blow up soon!
If this is your first job, just accept whatever salary as long as you use technologies that you want to specialise in. After your first job, do not hesitate to ask for a big salary. If you don't ask nobody will offer you for sure. It takes grit and self-esteem but you can make it easily in tech!
@@cooltigermusic Yeah I definitely took care to look for a place that cares about growth of their employees and while the salary isn't big engineer money, I definitely feel like I'm surrounded with people with experience and who are willing to teach me through code reviews etc, that's definitely more important for now I feel
It's not gonna be easy but definitely gonna do my best and see where it takes me
Thanks for the encouraging words man!
The main factor of such disproportion of salaries is the same as in every job market in the world:The wealth of the country in which you try to apply for a job. Not all countries in Europe has the same economic system and sometimes it matters more than the willingness of your boss.
He's describing salaries in a single country.
My company has an office in Krakow which I believe pays very competitively, and I am extremely impressed at the caliber of engineers there. This was considered an outsource from our US offices, as is our dublin location. Even paying higher end of these salaries it is much less than the compensation for US software engineers.
Polish engineers are top-tier... I'm not polish but I've worked with a few polish teams.
Yeah anglophones tend think that they are the best in everything. But with their inflated salaries I prefer to hire rockstar polish, colombians devs (who are in many cases better)
@@felipe4477 The problem is that some Polish rockstars are not always good team players. It's often a tradeoff, but for some companies it might be fine anyway.
@@aarlan9846 I doubt polish developers are worse teams players.Why would they be any worse?
@@CrYpt001 It's the culture thing. Starting from the primary school people are ashamed of asking questions, while even those considered stupid are sometimes quite relevant.
I've seen many teams myself that consist of several experienced people that can't or don't want to share their knowledge. I've also seen ppl being reluctant in task automation being afraid that they lose they job if their work smarter. Not to mention rockstar-like devs being straight assholes to juniors.
First thing you can learn working for a foreign company is the level of respect that seems to be hard to achieve among Polish nationals. Although not impossible I believe, but my experience does not confirm that.
I'm on a #3 company but I'm small fry with low experience and it's like a golden cage where it's not easy to grow professionally because the product is very crystallized already. On the other hand, my country's job market is a mess and the salary is not bad for a 3-year experience dev.
Thanks, good work!! Too little TH-cam channels focus on the European software engineering scene. Thanks for sharing the insight, you just earned a subscriber!
This came up while I was reading the blog post. Awesome timing!
This is a fantastic video and blogpost, and it applies to Data Science also. Last year I moved from a Tier 3 company in roughly the 3X bracket of your third mode in London, to a Tier 2 local in a smaller city. You've hit the nail on the head in terms of how compensation changes across the modes. I also liked how you tied that back into pie-chart of "success". I for one have massively increased the free-time/disconnect-from-work/flexibility in lieu of total compensation, but the peace of mind and mental health that affords is infinitely worth it. Professionally, working for Big Tech was amazing - working with insanely talented individuals and learning through osmosis. However, the higher intensity working is not for everyone as you point out.
This pretty accurately describes the Swiss market as well (of course with different numbers). Thank you for the video, super insightful!
Oh I know 2 of the books in the background. One is called Designing Data-Intensive Applications and the other is Software Engineering at Google
Nice one recognizing them! Most of the books on my shelf are listed on my reading list: blog.pragmaticengineer.com/my-reading-list/
When I'll have time, I'll do a review of a few of my favorite ones (both of these are favorites of mine).
I had a great job as Global Lead technical developer for a big oil contractor but we got taken over and then the oil crash came and after a couple of really stressful years I was made redundant.
I quickly got another job locally on about 90% of my old salary and now I'm leading a much smaller team and enjoying every minute of it.
There is life after Big Corp.
Luv and Peace.
You SHOULD post your salary. Gives employees negotiation advantage to everyone knows what the average is
As an American Dev Engineer going from the American salary too European salary, I find start up's pay the highest range but still nothing close too what I was getting in the US. However, the cost of living is way cheaper and of course Healthcare is way cheaper so I actually net more money in Europe when all is said and done.
A perspective from the Sillicon Valley market: I think the market here is also tri-modal, but I think I'd describe them differently. You have the local IT jobs (medicine, finance, etc), then you have the tier-2 software companies and startups, then you have the the top tier companies (mainly FAANG). FAANG are highly competitive, but the second tier can be even more stressful - it just depends on the job. Startups especially can be all-consuming and tend to pay more in stock that may never be worth anything.
I agree, but the distribution is more like this
fake start ups (early stage or not really legit start ups)/local IT jobs
real start ups and non tech companies where tech is not their primary concern
FAANG and other top tier tech companies
Finance
In fake start ups and local IT jobs, you are paid less for the lower qualifications needed and or the ease of the job itself.
In more real start ups with a real tech based product and non tech companies with engineering divisions of some substance, you are rewarded more handsomely and are also expected to do more. The former also pays you with options/equity that could amount to nothing in return for your blood and sweat, and the latter affords you a leisurely life in bureaucratic hell.
FAANG and other top tier tech companies pay very well. The former is harder to get into due to their prestige, but usually involve have less work to do because their primary concern is not breaking their very good products rather than innovating. The latter pays competitively to try and draw the same talent, but usually expects more work out of their talent.
Finance actually pays the best out of any of the above industry but expects the most out of you. This means 12 hour workdays with 4 hours of market research after an 12 hour zoom call. (I say this with friends with this exact work schedule) This is because in finance if your model of the market is better than every other firm, you can leverage this to easily multiply neigh infinite wealth. This means that grads straight out of college can make sometimes 300-400k working for companies like Blackrock/Jane Street etc.
Another class would the ones that are self-employed. I worked on a project in the Netherlands in 2019 and the self-employed senior engineers were making €240k a year. This was not at an international company and their rate was pretty standard (at least according to them).
Well... self-employment "salaries" are not comparable to classic employer-employee salaries. Being self-employed, you are employer and employee at the same time. That means in order to achieve a reliable income for you as the employee, you as the employer need to build a strong business case that makes you independent of market/project fluctuations while also having to pay extra cost that comes with having employees in the first place (company taxes, paying into social funds, ...)
If you must compare salaries in this way, I'd propose to compare the €240k you mentioned to the common price for leasing employees to other companies, rather than comparing against that employee's wage. While still not fully comparable, this is at least in the same ball-park.
edit: typos fixed.
I work for tier 3 company in Europe, an I find these observations about 3 tiers very accurate.
Also, the part about different priorities is great. This seems undervalued, the common goal to success seem to be to go up the ladder and earn more, but people are different and stages in life also play a large role.
this video is gold! I think it applies to Asia or any place as well. the productivity and hence the compensation of engineers really varies greatly
"I wrote a book that MIGHT be useful". Thanks, you're not big selling everything you created, cheers! Great video
I am a student in a school for software engineer. I'm half time in school/half time in a company. I work for a state-owned company and compared to the work given by other companies of the students of my class I am very happy to be in a public company.
They give me time to experiment, to learn, I would like to find this relaxed attitude in my next company. I also prioritize my free time more to pursue my own development.
Thank you so much for this video, I'm going to save it in order to find a company when I graduate and I'm going to share it with others at my school.
Really nice video. You're right there's not much transparent information about these kind of things out there. Work life balance and compensation wise I definitely prefer consulting at the tier 3 firms but you need to have established some strengths first to get rolling and make sure you do mostly things that make you grow.
oh my goodness you ARE amazing 🙌🏾 Esp for someone preparing to move into tech soon, thanks sooo much for your very insightful content
Another great video, Gergely! Can you please share some more of how your typical day was when you were handling that high pressure Uber project? I would love to hear on how tough it is on a daily basis and what it means to be a "senior" software engineer or a manager at Big Tech companies. All we hear are how great the salaries are, and what it needs to prepare for the interviews but most videos or conversations never talk about the hard work and the grind one needs to put in to survive and thrive at these places which is what one needs to do day in and day out once they get their foot in.
This is a nice perspective ... but ⚠️ if I may give my 2cts: Working in a small European startup can also be demanding in terms of work-life balance.
Sure you're not loosing 100k/minute of downtime, but on the other hand you do have the pressure of trying your best to make the startup succeed, otherwise the startup might simply disappear all together 😅.
Yes, agree most startups can be hectic at times, and some are outright stressful.
When you have skin in the game (= equity on top of a fair salary) and you can win big if the startup wins big this is totally fine. I do see startups push people to the limit who give zero equity and below market pay as “we’re a startup.” Not if you don’t compensate the risk and pressure with something you’re not is my response :)
@@pragmaticengineer 200% agreed!
Wow, macro perspective especially the last part where it's not just about salary 👍👍👍
Wow..for 2nd time in under 2 weeks youtube algo showed me what I didn't search for but needed👍
The AlgoGod has gained sentience... Let's all follow the Swedish...n run for the bunkers with canned foods etc
Praise the algorithm
When you have time, you don't have money - and when you have money, you don't have time...
People value these things differently.
What is ur point?
@@bartholomewlyons - how much money and spare time do you need. And what is the point of money if you have no time to enjoy it.
@@Mosern1977 - as if I disagree with that.
You quoted some obvious stuff but didn’t finish your point.
What was your point?
@@bartholomewlyons - I guess you got confused by my ... instead of .
Thanks for this, it was very informative!
I've also filled out the survey about salary.
brother the info you're spitting is gold!
There is no transparency in the USA for software engineer salaries. Not only do companies encourage employees not to share that information with collogues, but there is also a cultural stigma for talking about money in general (hyper competitive culture where you are either shunned for making more or seen as a braggart).
If you also factor in that many companies do not use industry standard titles (I have worked at a few companies and each one had a vastly different job title for the same position): It becomes very difficult to determine how much you are worth, as it is difficult to find direct comparisons.
Lastly: When you look at aggregated data, such as that provided by Glassdoor, you often have pay gaps of over 100K for the same role. It is extremely difficult to determine what you are worth as a result. It is almost a requirement that you job skip every couple of years, and keep interviewing even after you have a job, in order to see what is out there and climb that pay scale.
My experience shows me the best way to make money is find a startup that provides equity, but this is typically only an option for those early in their career that can afford to make a low salary in the hope that they see a big payoff during an IPO. For those of us with families, this type of high risk is not as viable without much more sacrifice; We often opt for lower paying jobs that have stability and a good work-life balance.
With more and more companies hiring remotely due to Covid-19 (and realizing that this model actually works) more companies will move into the regional mode that were previously not competing with external markets. Overall, this is likely to reduce the supply in the lower modes, increasing the average salaries.
The greatest trick the [ CORPORATION ] ever pulled was
convincing the world [ DISCUSSING SALARY IS IMPOLITE ].
1:45 Amsterdam companies have above average compensation relative to other Dutch regions
of course it's useless because you lose it all on rent and other cost of living expenses
there are probably also much more 2nd and 3rd tier jobs in Amsterdam than in most other regions, but I think even the 1st tier jobs compensate for the higher cost of living to attract talent
This is is true for pretty much every applied academic profession... At least to my experience.
In point! From my experience this model works for corporate world in Poland as well. SSC/BPO > Big 4 and similar > and Intl Business/Operations.
The thing about equity is... read the fine print.
If you work for a private company, you might need to ask permission to be able to sell shares.
And in my case, the company I worked for didn't even honor the agreement when I left, leaving me without the shares I had earned. That were worth about 50% of my annual salary.
I probably could've sued but... a) suing in the US, as a foreigner - I doubt it would be fun b) I didn't want to hear or think about that company any more. Worst experience of my professional life. Showed me that a high rating on Glassdoor means nothing.
Very informative. The trimodal model is definitely an excellent shorthand model. Its matches up to my own suppositions and theories about pay rates.
The only other axis i would throw on there is if the company makes money from technology. If their profit center is reliant on technology they will pay more for tech workers. Its kind of a obvious statement but really important because its how the C level on down views the importance of tech.
Yes, this is a good addition! It also pays into how bonuses or equity is granted.
Profit centers are always compensated more than cost centers.
@@pragmaticengineer thanks! I cant claim credit for that observation though. there is a guy on Reddit who broke it down and why he changed companies and persued employment with AWS after his emoloyer said they dont have any more money for raises for him, iirc he was not Dev but IT. The national grocery store chain he worked for had a similar headcount to AWS but was making, again paraphrasing, 1/40th of the money AWS was making.
His overall thesis was unless there are other overriding factors you should always persue employment at companies whose profits are directly tied to tech. Again its a very, "well obviously" statement.
The viewing IT just as just a cost center is something that I think will take anouther decade or two to get out of C levels heads. I work in healthcare IT and during covid most hospitals cut 20 to 70% of their IT staff. Usually starting at the top. The hospital recruiters and headhunters I've talked to said its been "fun" talking to the C levels and trying to get them to understand those folks left nasty warning reviews on all the IT websites, have warned off IT workers about the industry in genral, and are now gone and employed elsewhere in other industries. Competition for talent outside their industry is something american hospitals are entirely not used to. A past CEO upon hearing our network admin eas leaving asked ," did nearby $rivalhospital1 poach him?" Then looked really surprised to hear a celltower company 3 states away hired him
Hospitals in the US are a weird case of your Mode 1. Its a siloed industry. Nurses, Radiology Techs, Drs, et cant really go work in other industries, just other hospitals. So the fact that they are in competition with almost every other business for IT talent is mental hurdle a lot of hospitals have not cleared yet.
I am a software engineer from Latvia. I was offered to work for 400 eur a month for Accenture. 4800 eur a year.
Same story, as a junior software dev I've been paid initially 700€/month or 8k€/year at Accenture. That was in the third biggest city in Poland. When I moved to Germany I've started earning the mentioned "European" wages. Probably a move to Warsaw could pay off, but the work env would be more stressful than other central European towns. Now I'm doing 82k€/year in Germany and I've got pretty decent work-life balance.
you're joking right
Good info, thank you! Any information to help tech professionals wade through the absolute, total mess of recruiting (at least in the US) is appreciated!
this is interesting, I'm a US developer working for a university. I've considered applying to 2 listings in europe so far.
I work in an international corporation and noticed a security expert vacancy located in China. Internally the job was advertised with a compensation of 400 k€ per year which sounded exceptional to me.
Depends. If they can keep out hackers (CCP) totaly worth it.
@@Jimmy4video The job title was literally ‚Hacker‘. But from the description it was rather a management job.
this info is seriously amazing tbh. instant sub
Hi, I think you have a good contribution and overall you're filling something that quite unknown to people for a greater good.
I suggest you fortify your arguments with more numbers, and adopt a quantitative approach. Best.
uber equity is trash though. At amazon expect to be on call, and some teams work 60 hour/ week. So it's not all perfect in the #3 world.
Thank you so much for this information!
I think we should factor in the Year of Experience that you refer a "senior engineer" would have. (say, median).
Great video dude, keep it up
I’ll have to make a video on this at some point. I don’t think YoE is as important as many people think. It matters up until a few years (say, 5 or so), but after that your skills and experience matters more.
In a great engineering culture, with strong mentorship and role-models, someone could grow more in 3 years than someone else in 6 years in a place where all they do is firefight.
Eg at Uber I knew an engineer who was at the (difficult to get to) senior level and was mentoring incoming engineers with 10 years in the industry, who were not used to a fast-paced culture.
@@pragmaticengineer I have a problem with that fast paced culture concept. I've seen it too often used as an excuse for rushing things and not doing proper engineering. Of course, software is all about iterations and incremental improvement, but the goal is delivering working software, not iterating so fast that your head starts to spin.
Great video! Would be nice if you would mention the freelance options, too.
In the Netherlands, being a mid level developer you can land a contract with rates from 80 to 90 Euros per hour. This roughly translates to 12.5 to 15 grand a month. Be careful, this doesn't include vacation or sick leave. If you're off work for any reason, you simply don't get paid.
All in all, with quite limited experience you can get to the beginning of your definition of tier 3 without the crazy competition. Finding such positions is mostly a matter of filtering through a sea of recruiters talking only to those that hire freelancers and discarding everyone else.
Yep, I'll add in information for freelancing when I'll go into detailed NL numbers. I've never freelanced myself, but have some data and know friends who do this successfully (and happily).
I wonder how to get these contracts. Set your location to Amsterdam on linkedin and wait for the invitations to start rolling in?
how much of these 12.5-15k gonna be taxed?
@@karengrigorjan2777 Quite a significant portion (The Netherlands has high taxation but very high quality of living) but usually actually less than when making the same as a regular employee. You would likely end up at somewhere around 40% taxes over that income.
@@karengrigorjan2777 You'd need to look at the total income for a year and the tax brackets, then split the total into each bracket. Freelance work can also be very inconsistent, so you'll get 15,000 for 3 months then nothing for a month.
Looks like you can just add another axis of "size of locality" and make it a 3d distribution.
Great stuff! Liked the idea that transparency is helping the market! Valuable info :) thanks
Transparency helps employees, not employers.
Can you do a list with all these tier 3 companies in EU? I would move to another country only for a tier 3 company so it would help me filter a lot of jobs when I will be looking for one
The tax system basically means that paying higher salaries is a very inefficient way to compensate people. Once you get to the higher rate tax bands you compensated by way of bonus and stock options.
What an amazing channel, how do you have only that few subs? Definitely won me over, I'm sure this channel will explode over the next months and years, if you keep up this great content. Best regards from Berlin
Not talking about your salary only helps employers.
Thank you for sharing these info ! I just discovered your channel and learnt a lot already ! I was wondering though, do you think these salary ranges are also applied to Data Scientists ? I know your channel is all about SWE as that’s your expertise, but i am asking because I can’t find resources similar to yours about Data Science hiring in big tech in Europe. Would love to hear your thoughts that could be a great video idea for the Data Science and Machine Learning folks who follow you. Thank you very much ! 🙏
At Uber, the salary ranges for data scientists were 100% identical with software engineers. Salary dependent on the level for these engineers. So I'll wager that at #3 type of companies, this is the case.
I can't be fully definite about #1 and #2 of companies. I have seen few data scientist salary submissions and they seemed to be in-line with mid-level engineer salaries. However, I won't be the definite source on data.
My former colleague, team mate and first data scientist on my previous team, Oleg, is building nextround.cc for data scientist where he gives a salary estimate after people assess their own skills. It's pretty cool!
@@pragmaticengineer Thank you very much for your response! Also I didn't know about nextround.cc , I'll make sure to check that out.
Don't fool yourself, big salary means lots of pressure, tight deadlines, long hours (not year round but there are always several crunches a year(70-80hr weeks)), getting mega frustrated when others aren't pulling their weight.
And getting the boot if you don’t deliver
Actually, many jobs with poor salaries mean all that, plus having almost no purchasing power
Definitely true. When people with high salaries don't deliver high quality output , they often dont survive long in the company . No matter what the job , unless you deliver more value to your company than your salary, you won't last too long
A phenomenal video, please advise as to what software you use for the "whiteboard" you got?
This information is just... priceless!
I like the tiny library in the background were the books are turned in just the right way so he can say ... look what I know.
#3 does not exist in Hungary or it's very well hidden, I have no info about extremely high salaries (other than a few exceptional cases on a personal basis) even though I have contacts to the biggest IT minds of the country. Many people in the #1 group are still in denial about how much the #2 earns and it's really funny.
Hungary for the last 150 years has been world famous for producing great minds that make great scientific breakthroughs.... just never IN Hungary.
#3 are companies that compete on the top on the global level. Who wants to start a company like this in Hungary (or may start it but then better resettle to a better place. Vienna is just up the river). Your current government doesn't help much on that issues.
What would you say extremely high is in Hungary? 1.5M HUF net?
I think in your form asking for salaries is important the city as well. Is not the same earn 40k in Barcelona that is a "high salary" only given to people with roles, where you need to put 50 or 60% of those earnings in rent a flat or commute 1 to 2 hs.
Also would be good to check how much of the salary goes in taxes in each place, because here in spain for a 40k you pay about 40% on taxes so there is that, and the employer is paying for you also a 30 to 40% above. I currently unemployed after a burnout, all the companies I can find here that work in english are type #3 but paying shitty salaries, using the little saves I got to fix myself.
In your experience, do you think higher salaries and competition brings in the best people and results or not?
IMHO, higher salaries and competition are perfect for capitalism only, but terrible for employees and working conditions.
There is a problem that you didn’t mention: a lot of the companies in Europe (I assume also true in US/Can) have started opening secondary HQ in India and Eastern Europe, so when a person in your team leaves, they open the position in their secondary HQ as this lowers the cost dramatically. It is becoming more and more evident this will be detrimental for career opportunities in the primary HQ.
Eastern Europe salaries are not all that different than what we've seen here - 50k for a senior developer is now a standard here in Serbia. The main difference why companies chose to outsource is that best and brightest here are becoming software developers since it pays so well, best and brightest Amsterdam for example are into medicine and economics.
No this is not a major problem. I have been in this industry for 25 years and despite all the out-sourcing and near-shoring going on I never had an issue finding a job and getting paid well. There are more IT jobs and more well paid IT jobs in Europe than ever.
If you DO feel impacted by said out-sourcing example then there is something seriously wrong with your skill set. Let's say, your skill are to "narrow". If you can only do ONE thing well and that things can be easily described, easily checked and easily trained than indeed you have a problem.
I live and work in easter europe. It's not so different salary vise.
@@dejankrstic514 Exactly this. One of my Serbian colleagues earns 8k EUR a month -> 96k € gross living in Serbia like a king...
I've seen some software companies which they demand:
1 - You should bring your own pc to work at office. They don't pay for the gear and expect that you'll buy it with your own money.
2 - No perks
3 - No compansation
4 - No benefits
5 - No parental leave
6 - No extra money for your extra time
7 - Expecting you to work at weekends
8 - Paying just a little above minimum wage
regardless of your experience and value.
Meanwhile here in UK making half of the average of first category 😂😂😭😭
Yeah. If UK companies will go this way - many Devs will look for a job elsewhere. O think this is starting now as salaries don't catching up with inflation and cost of living
I kind of always assumed this information is self evident and trivial.
You can extend this to various types of positions at a company depending on whether you are working in a cost center or on improving the product. It is very difficult to convince anybody in a cost center to pay you salary that is higher than their current established brackets, no matter how good you are. Whereas if you can show you are somebody that can directly positively impact the product all brackets vanish and you get to actual negotiation.
A lot like being a Chef. Huge variations.
Never thought of it like this!!
There is a huge variation in the quality and speed so it makes sense
Very insightful! I have a request. Do you mind making a video on technical program management and how software engineers work with them? I'd also like to see you make videos on product management.
You forgot to mention the trading companies in Amsterdam. They employ a lot of software engineers and are at the higher end of the third bucket.
Just moved to the US from Italy, Italy has a really bad salary and TC. Usually entry-level(0yoe) is 25k to 28k for the better companies e.g. bending spoons or startups. I worked at a startup and made 30k with 1yoe. The only time I saw Equity was in that startup but was only available for senior staff positions (aka about < 10 people at the time). I've seen good companies underpay a senior who is basically unfireable with ~50k.
Good example. I have (temporarily) worked in numerous countries around thew world. Italy is second only to Japan in underpaying its IT engineers and discouraging (most) smart people from entering the industry. Every good Italian IT guy I know works in Switzerland (exaggerating).
@@michaelrenper796 yeah, Switzerland steals a lot of italians
In Germany, I earn a 27k gross salary after one year of experience in a med-sized company.
@@chaotic-voices-in-my-head My only experience with Germany is a close friend of mine who worked for amazon and made closer to 60k iirc. Faang always pays higher but 27k seems way too low. Are you in a major city?
@@Metruzanca It´s not like a major city like Hamburg or Munich, but also not so small. The car industry is strong there. I work remotely and luckily my rent isn´t so high currently. I couldn´t afford to live in a bigger city.
Amazing, thank you for this info
I'd add "ability to work on things no one else can, with tools no one else has" to the diagram at 8:40.
WOW...That graph looks a lot like blackbody radiation :D
Lognormal distribution. It's very common for data that's one-sided. (Salary is never negative. Nor are counts, latencies, etc.)
Really insightful video, thank you. I believe I am in the #2 company in NL with great work-life balance.
Have you found big differences between technologies / stacks? JS, Go, Python, Java, C++, C#, embedded C, etc.? Or it doesn't matter that much as good engineer can adapt?
I've not found real differences. Every company uses different languages / frameworks, but engineers pick it up quickly.
The complexity of systems is usually harder to grasp than pick up yet another language, in my experience.
A bit skewed...at least in America everyone in your Big Tech range basically gets up to 3-400k after a few years and a significant number get up to 700k+ TC if they grow the scope of their work.
With everyone at these levels having a base salary above $200k & generally people are comfortable enough to spend the rest of their careers in senior/staff positions after essentially “automatically” rising to the senior level.
&you can get a slightly higher salary in emerging / hot technologies within these companies combined with the fact that it’s easier to rise to higher level roles on a growing project even though it still takes a good bit of luck to position yourself to become a staff engineer+. ...also startups hiring people away from these companies exclusively which often kills individual career growth for a significant pay bump.
Really good content, but i would like to remember you of software engineering jobs in big banks and financial institutions. they pay top tech salaries
If you put entrepreneurship where you make 100k or more per year on your software products, into the measures of success you shared, it's pretty much 100% in all fields, outside maybe the company brand.
Very good stuff! Interesting insights!
@Pragmatic Engineer Do you have any insight about Germany? Is the range of salary is below what you have shown in the Nederlands?
Excellent video
great mental input for me
thanks and have fun with my thumb up :)
Might be a tiny sample of positions that offer 180k in Amsterdam. Not a big deal, you can make as much by owning a 2by2 donner shop.
Great video! 👍
Classic to have a copy of DDIA on the shelf :)
Great video Gergely, just sent you an email to discuss further - I would be keen to diffuse this message to the French community.
So, this is about salary if you work for a company as an employee. As a freelancer, you'll earn 2x to 3x the amount of money, even if you don't work for the tier-3 companies. I've been a freelance senior software engineers for the past 12 years. Starting as a freelancer was the best decision I ever made in my career.
Of course, as a freelancer you'll have to take care of everything yourself, including saving for retirement, insurance etc. so you'll also have a higher cost, but you'll still have much more money than when you work as an employee.
I have to take care of those things myself anyway. But at the same time the majority of freelancing doesn't pay better overall while it comes with greater instability.
@@ian1352 It probably depends heavily on what work exactly you do as a freelancer. For me as a software developer working full time as a freelancer, and in the location / country where I'm at, it pays a lot better than being an employee. But that's indeed probably not the case with all freelance jobs.
I admit I'm a bit surprised. I had assumed Europeans tech salaries were a lot lower than US ones, but in fact they're only somewhat lower when you take the #3 group into consideration.
Also, maybe he mentioned it and I missed it, but the #1 way to get your resume noticed at a big fancy tech company is to already know someone who works at that big fancy tech company.
Networking is crazy important. Keep in touch with your colleagues. If one of you make it to a desirable company, it can make it considerably easier for the rest of your gang to at least get your foot in the door. After that, you still have to be good and survive the interview.
I'd say between 10 and 15% lower in terms of total compensation package? I think in the end when you take into account the lower cost of wellfare in europe, you end up with probably around the same amount of money in the end.
This video is about the top tier locations in Europe. Netherlands, Paris, London, Southern Germany ( The blue banana - google that). Salaries are lower elsewhere.
Not talking about your salary only helps employers keep salaries low.