Tech salaries in US decline amid record-breaking inflation, market turbulence

San Francisco, Sep 24 : Following a year of record-breaking inflation and market turbulence, local tech salaries in the US, including those for fully in-person or hybrid roles, have experienced their most significant year-over-year decline, dropping 3 percent from $161,000 to $156,000, a new report has revealed.

When adjusting for inflation, the data by AI-driven marketplace Hired revealed a staggering story -- local US salaries have plummeted to their lowest point in the past five years, decreasing 9 percent from $141,000 to $129,000 from 2022 to mid-2023.

In contrast, salaries in the UK have seen a 4 percent increase year-on-year, rising from 82,000 pounds to 86,000 pounds. Despite economic volatility, jobseekers in the US and UK have maintained their salary expectations at $146,000 and 82,000 pounds a year.

“However, these figures may not be as impactful as candidates would expect when accounting for current market conditions,” the report mentioned.

Amid the rise of generative AI and tightening of corporate budgets, junior talent (those with less than four years of experience) have experienced the most significant decrease in salaries – nearly 5 percent year-over-year.

The demand for such roles, with posted roles on the tech hiring platform, lowered from 45 percent in 2019 to 25 percent in the first half of 2023.

“Compared to last year, we are witnessing a seismic shift in tech employee and employer preferences. The surging demand for experienced tech talent on our platform and employers’ increasing reliance on AI tools point to an ever-growing skills gap,” said Josh Brenner, CEO at Hired.

This challenge will only heighten as companies reduce their hiring locations amid their return to the office and limit their access to qualified talent.

“With the future talent pipeline at risk of a deficit, companies cannot afford to disregard high-quality talent at any level,” Brenner added.

Employers have consequently decreased the number of open roles in high-cost-of-living markets by 19 percent and have nearly quadrupled the number of roles in low-cost-of-living markets to 9 percent since 2020, the findings showed.

Experienced engineers with the ability to resolve issues efficiently are in high demand, particularly with the introduction of AI tools and increased cybersecurity challenges, said the report.