The demand for engineering talent continues to grow, and there is little evidence to suggest it'll start slowing down anytime soon. Salaries for software developers have reached consistently high levels worldwide, with the US no exception to this trend: it remains one of the top 3 countries with the highest average developer salaries in the world.
In preparation for this article, we decided to dig deeper and take a look at the variations in how much software engineers earn, and how the state they live in influences their earning potential. To do so, we headed over to two major job search websites — SimplyHired and Indeed — and used their salary estimators to calculate the average software developer incomes in the different states of the union.
Keep in mind that not every state is included in the rankings. Our data provides salary information on the 20 states where the salaries of software developers are highest, as well as on the seven fastest-growing states for technology jobs.
Predictably, California tops our list with an average developer salary of $108,916 per year. Massachusetts takes second place, with engineers there paid on average about $107,902 per annum, closely followed by Washington on $107,808. Alabama comes in last in our rankings, with an estimated software developer’s median salary at $72,631 per year.
At this point we should add that we didn’t include Alaska in our rankings. Indeed had insufficient data on what the average salary of software engineers in this state is, presumably due to the fact that the number of developers living there is comparatively small. On the other hand, SimplyHired suggests that the average engineering salary in Alaska is $101,022 per year.
It’s interesting to see how the salaries in our selected states compare to the national average — $92,764 — and which states come closest to the median mark.
According to our calculations, salaries for software engineers in DC and Virginia are approximately equal to the national average, with only five states — California, Massachusetts, Washington, New York, Maryland, and Colorado — averaging above that mark.
While California may be renowned as the nation’s tech hub, the 10,000 tech jobs the state gained in the first six months of 2016 mean that it only ranks fifth in terms of job growth in the industry. According to the US Bureau of Labor Statistics (BLS), the greatest percentage of tech jobs within the same timeframe appeared in Utah, with Michigan, Alabama, and Illinois coming in second, third, and fourth respectively.
These four states feature cities with a powerful blend of both new and mature tech companies, in addition to sizeable talent pools. It’s therefore only a matter of time before the average salary of software developers in these states catches up to the national average.
It’s worth noting, though, that a number of states, including Virginia, New Jersey and Minnesota, lost tech jobs in the first half of 2016. Whether this marks the beginning of a long term decline is yet to be seen.
The BLS has also published the location quotient of software developers by state (last updated on March 30, 2016), which ranks Massachusetts, Virginia, Maryland, California, and Colorado as states with the highest concentration of software developers in the US. Resultantly, these states also offer some of the highest software developer salary ranges across the country.
While US businesses may offer their software engineers extremely competitive remuneration packages, when it comes to filling tech vacancies, many of them consistently struggle to find suitable tech professionals.
In a survey of 760 employers from 29 US states and three Canadian provinces, as many as 83% admitted they lacked software engineers, a shortfall due mostly to the shortage of local tech specialists.
While tech giants like Google, Microsoft, and Apple try to attract and retain the best talent by offering sky-high salaries and legendary perks, many smaller companies are struggling to keep up with the competition.
Remember, too, that the real cost of employing staff full-time doesn’t stop at salary, but extends to social contributions and infrastructure costs too. These expenses may prove too much to handle for owners of small and medium-sized businesses.
In the face of high costs and fierce competition — even in those states that have a greater than average concentration of tech professionals — many employers are now on the lookout for alternative ways to add software developers to their tech teams.
One such way is to hire remote staff. By doing so, business owners are not only able to reduce their expenses, but also reach a much larger pool of development talent with an enormous array of skills.
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