Swizec Teller - a geek with a hatswizec.com

    Are you the engineer who scoffs at high salary numbers?

    Back home the programming community used to run a salary poll on Facebook every year. How much do you make, what do you do?

    This was in Slovenia a few years back – smaller numbers than you'd see online now. Some said €20,000 was the most an engineer could dream of, others that they wouldn't get out of bed for anything under €50,000 and €100,000+ sounds reasonable with some hustle.

    Both groups yelling at each other that the other group doesn't exist. There is no way in hell an engineer could get paid lots! What do you mean you'd work for peanuts are you dumb??

    The same fight every year!

    You see this everywhere engineering salaries are shared. Distinct groups of people, doing the same work, paid on such vastly different scales they can't even imagine each other existing.

    What do you think is going on here? 🤔

    The trimodal nature of engineering comp

    In 2021 Gergely Orosz collected data on engineering salaries and found that compensation is trimodal. What you see reported as averages, top of range on public portals, and an invisible range of high achievers and IPO lottery winners.

    Trimodal engineering compensation
    Trimodal engineering compensation

    This is where my friend Josh, a salary negotiation coach, casually drops in chat "Oh yeah we negotiated $800,000 more equity". You what now 😳

    All these engineers have roughly the same work. Write code, have meetings, investigate bugs, build company assets, help others. Yet some get paid way more than others.

    What gives?

    What you do matters less than who it's for

    Early in 2021 a contractor helping with my websites took my advice and changed his day job from a local Italian enterprise to Automattic, the company behind Wordpress. His pay went from €28,000 to €116,000 overnight.

    Swizec Teller published SeniorMindset.com avatarSwizec Teller published SeniorMindset.com@Swizec
    Friend of mine just went from €28k to €116k by switching jobs to a remote first US company.

    And Europe wonders where all the engineers at 🤣

    He no longer has time to contract for me 😅

    And instead of spending his days with an outdated in-house framework, he's learning transferable skills. How many companies would hire someone with deep Wordpress expertise? It runs 39% of all websites ...

    Similarly, I changed jobs early in the pandemic and after a few comp adjustments now make $75,000/year more than before the pandemic. Cash.

    Swizec Teller published SeniorMindset.com avatarSwizec Teller published SeniorMindset.com@Swizec
    Over the last 2 years my cash salary went up by $75,000 🥳

    No promotions, no extra effort, no faff. Just showing up every day and applying principles from

    way easier than quitting your job and going solo ¯\_(ツ)_/¯

    The equity could be anywhere from $0 to $millions in 10 years. We'll see 🤷‍♀️

    The Senior Mindset series

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    it describes my days in a way I have not read before.

    This was a very enlightening article about being a senior engineer.

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    Your comp is based on value

    Gergely puts the difference down to competition.

    Tier 1 firms compete with local firms in the same industry. Tier 2 firms compete with all local firms. Tier 3 firms compete for talent globally and hire anyone who's good enough.

    Company tiers
    Company tiers

    The pandemic accelerated this trend.

    With remote work, every tier 1 company has to compete with tier 3 for talent. That's pulling up the market for everyone.

    The reason tier 3 companies can compete for global talent is the value you bring. Think about it.

    How much can a $10,000,000/year company pay its 10 engineers? What about a $10,000,000,000/year company with 50 engineers?

    Alphabet (Google) makes $1,650,000 per employee according to Wikipedia. Apple's quarterly profits are higher than Slovenia's annual GDP. Facebook can lose $45,000,000,000 in stock value from a 6 hour outage.

    How much salary do you think the engineers worth $7.5bn/hour can ask for?

    What you do matters a lot less than the value you bring.

    Swizec Teller published SeniorMindset.com avatarSwizec Teller published SeniorMindset.com@Swizec
    Your salary is limited by the value you bring, not your title. The value is limited by your company

    As senior engineer I've been at $105k, at $210k, and a few steps in between. Pretty big spread 🤨

    Tweet mediaTweet mediaTweet media

    Is tier 3 all about company size?

    You may think tier 3 companies are all about size. Large enterprise, huge profits -> tier 3.

    Not so!

    It's a mindset. A competitive strategy. The company has to decide it wants to hire the best. Then it needs to attract the best and keep you happy.

    The combination of company and personal growth, salary, exciting challenges, brand building, coworkers you can learn from, and good work environment all contribute. Tier 3 companies want you to be happy, challenged, and growing.

    To them, you are an investment, not a cost.

    Cheers,
    ~Swizec

    Did you enjoy this article?

    Published on March 7th, 2022 in Mindset, Compensation, Salary,

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    The Senior Mindset series

    Get a series of curated essays on the mindset of a senior software engineer. What it takes to get there, what should you do when you're there, how to change the way you think.

    it describes my days in a way I have not read before.

    This was a very enlightening article about being a senior engineer.

    Join 15,161+ engineers just like you already growing their careers with my emails, workshops, books, and courses.

    ⭐️⭐️⭐️⭐️✨
    4.5 stars average rating

    Have a burning question that you think I can answer? Hit me up on twitter and I'll do my best.

    Who am I and who do I help? I'm Swizec Teller and I turn coders into engineers with "Raw and honest from the heart!" writing. No bullshit. Real insights into the career and skills of a modern software engineer.

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