London software engineering salaries fall by 1.7%

Software engineering salaries in the capital bucked the trend of rising technology pay in general in 2016, according to research

Salaries for software engineers in London fell by 1.7% in 2016 compared with 2015, research has found.

Job marketplace Hired studied the candidates on its platform and found that although technology salaries in general are on the rise, pay for software engineers in the UK capital dropped in 2016.

Salaries also appeared to be lower in London than in other perceived global tech hubs. The average salary for software engineers in the UK in 2016 was £56,000 compared with about £107,000 in the San Francisco Bay area.

Jessica Kirkpatrick, data scientist at Hired, said the reason for this contrast in salaries was the difference in maturity of the US technology market, which gives software engineers in the San Francisco area a certain “prestige” that those elsewhere do not have.

Kirkpatrick said: “Silicon Valley has long been home to some of tech’s biggest success stories – the likes of Twitter, Facebook and Apple – and some of the most exceptional tech talent. This, in turn, has resulted in higher salaries in this region.”

Within the UK, there was also a gap between the salaries offered to technology candidates to relocate to London and what Londoners are offered for the same role. The research found that relocators are offered 28% more than local candidates – an average of £73,000 compared with £57,000.

The UK is currently suffering a technology skills gap both inside and outside the technology remit, making it hard for firms to find the skilled recruits they need.

Kirkpatrick said the salary discrepancy between London and San Francisco could indicate that London cannot get its hands on the right talent at the right time, which is why firms in the capital may be looking for candidates from further afield and are willing to pay them more.

“The UK needs to better address the lack of young people studying computer sciences or science, technology, engineering and maths [Stem] subjects from a much earlier age,” she said. “Until this comes to fruition and with many developers now self-taught, it is vital that employers look past the need for a degree and focus on qualities such as enthusiasm and a commitment to continuous learning.”

The new UK computing curriculum requires children between the ages of five and 16 to learn computing concepts such as computational thinking and coding, but these skills are taking a while to filter through the pipeline and are not necessarily encouraging children to pursue tech careers.  

Data scientists and product managers

Of the highest paid tech jobs in the UK, product managers and data scientists came out on top, and there has been huge demand for recruits to fill data roles across the UK.

The average salary for product managers was £64,000 last year – a 1.6% increase on 2015 – while the average UK data scientist’s salary rose by 5.2% to £56,000 in 2016.

These skills are in high demand across the UK, with product managers requiring abilities such as business development, project management, Java, Ruby, agile methodologies and data management.

Data scientist skills in demand in 2016 included experience in machine learning, data analytics, Python, SQL and R.

Race diversity in the US

Hired’s research of the candidates on its platform showed that software engineering candidates in New York and San Francisco were 49% more likely to be hired if they were of African-American descent.

However, the salaries offered to African-American candidates are lower than those offered to white candidates because their asking salaries are lower, the research showed. The average African-American candidate will ask for an average of $110,000 and be given $115,000, but a white candidate will ask for $125,000 and be offered slightly more.

Because of this, African-American candidates are offered about $5,000 more than they ask for, but are offered less overall compared with white, Asian and Latino candidates. Latino candidates were found to be 26% less likely to secure a role than the average white candidate.

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Kirkpatrick described these salary discrepancies between races as “disappointing” in an industry that is trying to tackle deeply ingrained diversity issues.

“At Hired, we believe strongly in the need to remove unconscious bias from the hiring process,” she said. “We have features baked into our product that help to prevent bias in the sourcing stage, and it is something we are committed to spreading awareness about through reports like this.”

Many people have an unconscious bias that can play a part in the hiring process and, coupled with the stereotypes that already exist in the tech industry, this could be holding back any shift in diversity.

Age diversity in tech

Hired’s research also looked at age diversity, and in all age brackets up to the 50 to 60 category, the salary that candidates are hoping for is higher than the average offered salary.

The research also found that tech candidates aged between 25 and 30 were offered more jobs, on average, than those older or younger.

From the age of 45, the salary offered to candidates decreases, which Kirkpatrick said could be because the skills or knowledge of older candidates may be out of date.

“The tech industry is known for skewing younger, which may mean that people over a certain age face an uphill battle if they are looking for work in this area,” she said.

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