UK tech industry pay is paltry, but think twice before heading to Silicon Valley

Hired has released its annual Tech Salaries Report, revealing that compensation in the UK lags behind the rest of the world. The average salary for a software engineer in 2016 was just £56k ($73k), the third lowest of the 16 tech markets analysed. Overall, the lowest average salary was found in France, where workers receive just £44k a year in return for their endeavours. Singapore followed in second to last place, with an average salary amounting to £49k.

Meanwhile, the American markets showed substantially higher software engineer salaries across the board, a trait which Hired puts down to the relative maturity of tech markets in US. The San Francisco Bay Area, somewhat unsurprisingly, came out on top in terms of compensation, amassing an average of $134k (£107k) in 2016, followed by Seattle with $126k (£101k).

Interestingly, countries across the globe experienced dips in tech salaries, of which the largest was Toronto, whose software engineers suffered a 6.29% salary decrease. Only two markets experienced an average salary increase of over 1%, the San Francisco Bay Area and Seattle, garnering 3.38% and 2.14% respectively.

Perhaps the most revelatory discovery of Hired’s analysis was the astronomically high cost of living in prosperous Silicon Valley, which meant that, all things considered, the Bay Area salaries actually paled in comparison to less expensive cities worldwide. For example, the average salary for a software engineer in Austin, Texas was $110k (£88k), but when you factor in the cost of living, it equates to a gargantuan salary of $198k (£158k) in San Francisco.

This was a trend Hired spotted worldwide; in Melbourne, for example, the average pay was a seemingly modest $83k in US dollars. But the city’s relatively low cost of living meant that making $83k in Melbourne was the equivalent of raking in $150k in San Francisco. So, it seems, if you can forego your dreams of block-colour Google bikes and Stanford sweatshirts – and let’s be honest, they do have a certain cachet – you’ll reap the (monetary) rewards.

Another notable trend was that tech companies show a readiness to offer inflated salaries to non-local tech workers who have jumped ship and relocated. It was particularly true of European, Canadian, and Asian markets that individuals who relocated were offered a significantly higher average salary than individuals who lived in the vicinity: in Toronto, offers were typically 21% higher for the former group, in London and Singapore the increase was 28%, and in France the relocation offer was a whopping 57% higher on average than salary offers to locals.

I guess the takeaway message here is that burgeoning tech markets in cosmopolitan cities around the globe are hoovering up outsiders looking to relocate. So if you fancy spreading your wings and heading for greener pastures (figuratively, in the case of London, home of leaden grey drizzle), then there’s never been a better time to take the plunge. You might just want to look at Melbourne rather than San Francisco.