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The Rising Cost of Software Engineers in the US

The Market for Quality Talent Software engineers can essentially write their own ticket when it comes to the American job market. High demand, higher salaries,...

10 min read

Software engineers working in a United States Office

The Market for Quality Talent

Software engineers can essentially write their own ticket when it comes to the American job market. High demand, higher salaries, and a plethora of opportunities have made software engineers the rockstars of the job market. As such, it has become increasingly more difficult for smaller companies to afford quality talent.

Why are software engineers so valuable in today’s market? What has changed over the years to give them such this edge? How can businesses continue to afford quality talent while still keeping their payroll at a manageable rate?


A change in software demand

As times change, so too does the employment market. In the 90’s, during the famous “Dot Com Boom,” quality website designers were sought by every company. Today, as technology becomes more advanced and essential to our way of life, it is to software engineers that the world turns to keep us connected in an efficient manner.

The fact of the matter is the software that we use for everything from banking to entertainment takes a lot more time and expertise to create than the software of years gone by. The Hill reports that an average application for an Apple device takes anywhere between 70 and 140 hours of programming labor to create. Android apps take even longer, demanding anywhere from 90 to 170 hours. And that is just for non-gaming apps. Once we start talking about games, the numbers jump up to 420 hours for Apple and 550 for Android.

The technological world continues to leap forward at an accelerated rate with the Internet of Things technology and artificial intelligence slated to change the way we work and live. With the general public becoming more engrossed in advanced intelligent technology, the software that creates the user experience has to improve in order to stay relevant and competitive. This means more time, more skilled programmers, and more money is needed.


How high are software engineer salaries?

Why is it so hard for smaller companies and startups to recruit software engineering talent? They simply cannot afford them. According to SmartAsset, the median salary for a software engineer is $92,660, while new programmers with no experience start at $54,900. Even these newer workers come with an expected salary growth of 60% throughout their career, according to a report published by Forbes. When one considers that the median US salary is a little more than $46,000, that’s a staggeringly high rate of pay.


Multiple paths to a career

The number of computer science undergraduate degrees shows that the explosive upward career path of a software engineer has not gone unnoticed. Enrollment in university computer science programs saw a 24% jump over a period of 10 years. That is reflective of the overall increase in the opportunity that the graduates will have.

The industry saw a 50% jump in employment placement between 2003 and 2013, making it one of the fastest rising employers in the nation. As such, alternative paths have appeared for those seeking to become software engineers. Coding boot camps have popped up throughout the country. These are normally 12-week programs that teach all of the skills necessary to land a high paying job in the software industry.


How can smaller companies afford software engineers?

If the competition for quality software personnel is so intense, how then can a smaller company or startup acquire the talent they need and retain them? Many are looking outside of traditional hiring practices and outsourcing their software needs to tech firms. This has created an opportunity for full teams of qualified individuals to tackle complicated software issues at a manageable cost.

Because of these rising costs, many companies have begun to outsource to Latin American talent as a cost-effective option. Talented software developers can approach your company’s problems with the same level of skill and expertise as private US developers but at a fraction of the price. And it seems that if engineer’s salaries continue to rise at the same rate in the US, more companies will look to outsourcing to stay competitive.


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