Tech salaries in Europe really are a joke. Even American companies don't pay well here because why would they, the market itself sucks. Combine that with easy immigration to US for Europeans and good affordable education it seems unlikely that talented people would choose to stay here. Part of the reason is the old money in this ecosystem.
The problem with digitization in Germany specifically is that our paperwork is supposedly something to be proud of. "Germans love paperwork" says every article about German culture as if its a great thing. Its really sad to hear this. We should hate paperwork and seek to replace it wherever possible.
Don't look at just the number. Once you consider the cost of living, health coverage, days off, sick days, long service leave, parental leave, and lots of other benefits, it's actually not that impressive.
> easy immigration to US for Europeans
"Europeans" don't exist. UK has drastically different immigration rules than Poland for example.
> good affordable education
Some EU countries provide University education for free, while the US is famously in debt... Are you sure about this one?
Finally, some people just aren't excited about life in the US. I'd take a lower salary to live somewhere else and I know a few people with the same opinion.
Don't just look at the list of things not included either. Actually look at the numbers.
A Silicon Valley total compensation can easily be double that in the UK. That pays for a lot of cost of living, healthcare, time off, etc. It actually is an impressive difference.
It's more than double. The engineers on my team in Portland earn more than 2x the experienced senior engineer we have in the UK. The engineers we have in San Jose make 1.5x what most of our Portland engineers make. And we are not a FAANG.
> A Silicon Valley total compensation can easily be double that in the UK.
Sure, but that's comparing one specific area known for tech, including many big players with a whole country. SV is not the US, like Canary Wharf is not the UK.
> Once you consider the cost of living, health coverage, days off, sick days, long service leave, parental leave, and lots of other benefits, it's actually not that impressive.
You don't think that tech workers in the US get most of that? Software engineering in the US is a pretty cushy gig. A lot of the problems you hear about for regular middle class Americans don't really happen if you're working in tech. It's not fair, but it's the current reality.
The ones I worked with some time ago did not. So it seems really dependent on the job.
But even if you do currently, there's a lot of peace that comes with: it's not company's goodwill, it's a requirement and company's goodwill goes on top of that.
People keep saying that, and I keep not believing them. AFAIK American companies tech offer comparable benefits to salaried employees, even though it's not required by law. And more and more of the "lifestyle" perks are disappearing, e.g. people are working more and more (8-6, 10-10 etc.) but still not getting paid US-style.
The only real deal-breaker, for me, is the risk of health insurance - I'm sure I'd be getting top-notch health insurance for myself and my family, but will it be useful when I need it? Will I know which provider to go to, is "in network", will bill me correctly, insurance company won't reject the claims, ... (but I guess these things are solvable, otherwise top-paid US employees would complain a lot, or emigrate). And of course the fact that I'm paid EU-style (well, better than EU-style as I work in finance with shittier quality of life, but still below US salaries) so I'm guessing US employees would either try to underpay me.
They are "a joke" because you're comparing them to the U.S. If you compared them to Japan / Australia / Canada let alone to the developing world they are great.
Immigration to the U.S never was and probably never will be easy and the education there isn't affordable. Also, the work culture would be quite a shock for an European.
Some people will always try to gain a "better future" , I don't see big numbers leaving Germany though even if immigration was easy.
It's funny that when Europe is mentioned, many people think "Germany". Ask Italians about their tech salaries, I've been told people are happy with 2.5k as a senior developer there...
The average software engineer in Iowa makes around 100K a year. That's pretty good, really, most people would consider it a lot of money. There is a reality distortion field around SV :)
>If you compared them to Japan / Australia / Canada
Can't speak for Japan, but the tech salaries in the big cities in Australia and Canada are far more competitive than those in Europe.
The European tech industry is an absolute joke overall, and I say this as a European. It would take an utterly massive overhaul to correct without relying on outright Chinese-style protectionism, and as more companies move remote and snatch top talent in timezone-friendly countries, time is running out faster than ever.
Good luck to European leaders in responding to the question of "Why would I, as a European in Europe, work for a European 'tech' company for terrible pay, when I can work for a US or Canadian tech company remotely for far better pay, on stronger teams, while retaining the same benefits of living in Europe?".
Be careful what you wish for: if we move towards a genuine globally-integrated tech market, where work can be done from anywhere, then companies might start asking the complementary question: "why would I, as a company, pay US-level (or even EU-level) salaries when I could hire someone from Russia or India or the Phillippines for much cheaper?"
Arguably anyone that could outsource to very low cost centres has already tried to outsource there and many have learned (expensive) lessons from it.
What seems to work: Geographically distributed but autonomous product-dev centers, with remote workers aligned within a certain timezone.
What doesn't seem to work: Outsourcing pure dev work to timezones with no overlap.
I don't believe the above will change even if things become more remote-friendly. Perhaps we'll see more dev centers pop up to service the needs / wants / cultural or language asynchronicity of a given region, but that would lend more toward expansion than cost reduction. This also resonates with the approaches being discussed that I've read and heard first hand from company leaders during COVID.
That argument from consequences is common against remote working but isn't an actual arguement against the utility.
If there is no benefit for paying a premium why not go with the commodity? Why go with an outmoded restriction to only hire blacksmiths in bounds of the south side of the original city limits? (Because they didn't want to smell the smoke in the posh north side while requiring the smiths live within the innermost set of city walls so they were available during a siege).
Not trying to discredit those numbers, but I wonder about the split per US state. Are they very close? Are there states that pay a lot more than others?
I'm not American, but everything I read suggests that yes, of course; California pays much more than Missouri. I think the difference could be 2x - 3x.
Then again cost of living is also 2x-3x more in SV.
Today I was looking at some job ads for mid-senior devs in London. £50K and 200+ applicants. And then it says:fruits, free parking, private healthcare after 1 year.. And this suppose to be the tech center of Europe..
That's pretty average for dev jobs in commercial enterprises in London (e.g. working for a B2C). In the UK, the big money for developers is in finance (either at a bank, or prop trading, or insurance, or gambling, etc). If you want a shock have a look at the wages in some of the surrounding areas (e.g. Buckinghamshire, Oxfordshire) - you'll be lucky to break 40k£, even if your skill set is very specific to what is required. Contrasted with finance in London, you would be looking at 70-80k£ for a mid/senior, and 100k£+ for a true senior/lead.
Also important to realise that 50k£ is 2x the national average wage. So for more than half of the population it's nothing to scoff at.
The UK is also in a bit of a funny place when it comes to immigrating to the US - due to a lot of American businesses having satillite offices here and a lack of specific visas for Britons, you're going to have a hard time finding a company that will be willing to sponser and relocate you.
Another really important factor when looking at the UK labour market, specifically in London (because my experience with it is there, but this could be true for the other major UK cities), is that contract roles are much much much more lucrative that FTE (or at least, they have been prior to IR35). If you're a mid/senior contracting at a bulge bracket bank you could expect a ~500£ day rate. 500£ * 282 (working days - some holidays/sick/national holidays) = 141000£. If you run that into your contracting LLC, rather than take it through PAYE, you can cut your effective tax rate by a big margin depending on how you spend your money - so even more cash that you would be FTE on the same wage.
Mid-senior devs in most of the USA don’t make 400k total comp either.
Solid experience and skills will get you offers around 100k GBP from bigger, well funded startups and if you want to sell your soul to the finance industry you can get like 300k GBP total comp. Those are both real offers I’ve had in London.
> and if you want to sell your soul to the finance industry
What do you mean when you say the finance industry? It's a pretty big field. Is an online bank the same as some real time trading platform?
Also, why is it selling your soul? Is Google / Facebook "better" (that is - more moral) than a fintech company ?
That seems true. However it also needs to be considered that salaries shouldnt be so low that people just leave. For example consider Berlin, rapidly rising rent but not so much for salaries. So people just leave. In such a case you do get more bang for your buck as a company but theres a limit on how much.
Companies maybe, but there’s zero reason for me to move back to the Netherlands if they’re not going to pay me at least what I earn in Japan, and Japan isn’t even particularly high paying.
Well you left one of the happiest countries in the world to live in a not very happy country (according to research). Without knowing anything about you I find it hard to believe your day to day is any happier than it was in the Netherlands.
I moved to the Netherlands from a country that pays developers very good money but had a million other problems...so it's really not all about the money.
Global and a few Japanese companies in Tokyo pay well compared to Europe. E.g. you can make 200+k$ total comp if you have skills in demand (ML, etc.), which is hard in Europe outside management consulting/finance.
How that compares to the US depends on your life choices, etc. I am aware I could "easily" earn 2x in SV, but I hate living in suburbs while I can cycle to work in Tokyo and live in one of the most vibrant city in the world.
Despite what you may think, there isn't some nefarious conspiracy keeping tech salaries low in Europe. It's that this is where the market is, an equilibrium between supply and demand for engineers.
It's precisely the same reason that salaries in certain US markets are so high: FAANG don't pay high salaries because they have fundamentally decided that engineers should be paid X amount, nor because someone has read Marx and wants to give engineers more of the value they create. It's because demand has exceeded supply for engineers in those markets, and that has driven up the equilibrium price. I should also point out that the median salary for engineers outside the NY and the Bay Area is something like $100k, not the stratospheric packages often discussed here as though they were normal rather than exceptional.
(I've not noticed too much of a love of paperwork here in Germany, but I could certainly see how the stereotype was formed)
However, that also means software engineers don't create that much value. I've been hiring developers myself, it takes half a year to get a senior engineer, even with extremely relaxed immigration laws like in Germany, just due to shortage. It's a weird paradox. If companies had enough money, I'd imagine SV engineers jumping on a plane to Berlin right away.
Maybe. I was the CTO of a startup in Berlin until about 18 months ago, and built a engineering team of 13 people. There was certainly competition for engineers, but it never took 6 months to get someone on board[1]. That said, there was definite wage inflation being driven by that competition (at least in Berlin), but it still topped out at around EUR 80k (2 years ago, it may be higher now).
I accept that the Berlin expat market is also a little bit different, where 3 month notice periods aren't insisted upon, and companies know how to move fast. The situation in the Mittelstand software industry could be very different for all I know.
[1] The exception to this, for me, was DevOps, which took so long to hire for that we ended up developing a strong enough in-house capacity that we no longer needed them. Engineering management was also difficult to find.
>If companies had enough money, I'd imagine SV engineers jumping on a plane to Berlin right away.
How many SV developers speak German? Germany isn't quite as English-friendly as other places in the EU (Netherlands, etc.), and if you don't speak the language you aren't going to enjoy yourself in the town very much
Maybe if you just look at gross numbers. It's the old GDP vs happiness as an index for a country's rank debate.
I worked for a multi-national in Berlin; heading a team of 40 internals and another 40 externals, the latter mostly in Ukraine.
As a director I saw the salaries of everyone working under other directors under the same VP. Including the teams in Chicago and San Diego. Salaries were maybe 10-15% lower in Berlin.
We regularly swapped developers around. Usually for six months. People from both CA & IL that came to live in Berlin with their families were always overwhelmed about quality of life in here. Particularly the food. Well, then they fly to Italy over the weekend (affordable, with their spouse & kids, mind you) and they are completely blown away.
If you look at net salary and what it buys you, quality of life, quality of food, healthcare, rent, 20 days/y of paid holidays (+12 paid public holidays in Berlin, more if you live in a state with a Catholic majority ofc.), 6 months (unpaid) unconditional sabbatical after you complete five years with that company, job security because of German laws. The list goes on.
On these measures the US sucks compared to most of Europe. Compared to Germany for sure.
I pay 1,250 EUR/month for a bright, 1075 sqft apartment in the very center of Berlin. The city surely is one of the cheapest capitals in Europe but still.
From my friends in SF or Boston who work in tech, earn more (gross) than me and who visit me from time to time I always hear they're jealous about the quality of life we have here.
I was an expat for 15 years working in India, Australia, Asia and the UK. During the last five years I was on business trips to the US every 2-3 months. Affordable food sucks, good food will cost you $$$ and you can't get it just in any supermarket like here.
I have only one body. What do I care if I make 30% more and live 10 years less to enjoy it?
Being back on the continent for another decade now I know I made the right decision. The only country I lived in with comparable quality of life in many aspects (and even better health care) is Japan.
Finally, in software location is a non issue when you want to start a business. You can shop for money anywhere and you can set up the business where it is convenient, e.g. for tax reasons or access to investors.
I had a software company in Hong Kong seven years ago. I was in Europe most of the time. The team was from all over the planet.
My experience is that if investors want to meet f2f they actually love if you're in Europe as they have an excuse to fly there and meet you.
One of my best friends who's Mexican co-heads a big home delivery SaaS that is growing at crazy pace. He bought a flat here. His workplace is a modest desk in a rather mediocre co-working space in the center of Berlin.
He also bought a flat in Austin, TX. But he only goes there maybe for one month/year. Because ... quality of life. It trumps salaries every time ... if you have understood what it truly means to be human.
We had a funny situation with a fax couple of years ago.My bosses were opening a new company and because of some situation in the bank,they did request to fax the paperwork to them(email not safe, f2f wasn't an option).I asked my manager how is he going to do it,as he seemed quite puzzled. Eventually,he found one dumped behind all the cleaning equipment in the office. Dusted it off and managed to fax it somehow.This was for one of the largest banks operating in the UK. Fintech it's not.
Because the law was a special case for fax machines essentially instead of a generic one and they didn't understand the then very esoteric mathematical concept of converting arbitrary inputs to data and sending it in arbitrary ways.
We don't see laws today for unimagined hypotheticals like if governments if carrying a box with a stable frame of reference anchored wormhole inside that leads to a remote island with 1 ton of heroin is drug smuggling or not.
Fun-fact, a big German insurance company had something like that:
Customer send's fax printed out to paper, that paper got copied to 'real' paper for manual signature, that 'real' paper was then scanned and send digital (email) to a archive, where the printed out that digital contract to 'real' paper again (for the archive)
And the US is one of the only western countries where wiring money from one bank to another might mean that the originating bank prints a check, mails it to the receiving bank where it's typed in manually (hopefully correctly) and clears 6 weeks later.
