It's no surprise it's cheaper in Atlanta than Seattle or Silicon Valley for tech companies to pay their workers.
But Atlanta is cheaper than many of its Sunbelt peers with their own burgeoning tech scenes, including Houston, Dallas and Charlotte, North Carolina, according to a new report.
Atlanta is lumped in a lower tier of tech markets where it only costs startups 80% to 88% of what their peers in the major tech hubs have to pay, according to Carta, a management platform for companies and investors that tracks technology salaries.
The report showed workers employed by capital-backed technology companies in the metro Atlanta are paid 84% of what they are in the San Francisco Bay, New York City, Seattle and San Jose areas. Carta made its analysis based on 2,000 venture-backed companies, which employ 125,000 workers on its platform to determine each location’s level of compensation.
Atlanta was also a likely beneficiary of companies leaving major tech hubs in favor of places with lower costs and more diverse talent. The report showed 62% of new hires were in a different state than a company’s headquarters, and 84% of companies take employee location into account when deciding pay.
In the Southeast, Miami-Fort Lauderdale companies paid tech workers the most, about 90% of what top markets pay. Atlanta and Miami, Florida, compete for the title of top regional tech hub. Last year, startups in both of those cities raised around $4 billion of venture capital money, according to a PitchBook report earlier this year.
The cheaper salaries may explain why technology behemoths have chosen Atlanta for expansions. In 2020, Microsoft Corp. brought its cloud computing and artificial intelligence office to Midtown. The move brought 1,500 jobs that paid an average wage of $112,215. A wave of tech expansions followed, including Visa Inc.'s 1,000-person office, with average wages of $113,021; Cisco System Inc.'s 700-person office, with average wages of $118,000; and Intel Corp.'s 500-person office, with average wages above $100,000.
Median employee salaries at those companies were $176,858 at Microsoft, $146,420 at Visa, $124,806 at Cisco and $104,400 at Intel, according to U.S. Securities and Exchange Commission filings.
Lower salaries could also be attractive to high-growth startups. In April, Circadian Ventures invested in Silicon Valley startup Aginity and convinced it to relocate to Atlanta because of its cost of living, local talent and diversity of industry.
But Atlanta's historically lower salaries could be changing as wages rise across the nation. Wages in Atlanta have increased more than the U.S. average in the past year. U.S. Bureau of Labor Statistics data showed that Atlanta wages grew 6.6%, or about $70 per week, to $1,124.85, ranking it No. 44 in the U.S. for percentage growth.
The Carta report found every metro area it analyzed pays higher than the averages tracked by the U.S. Bureau of Labor Statistics. If salaries had adhered to changes suggested by the BLS, tech workers in Atlanta would be making 80% of what is made by workers in the top markets.
The Carta report contradicts one released by career website platform Dice, which showed Atlanta had the 10th highest average salary for tech workers in 2021 at $107,515, an increase of 13.9% from the previous year.
That ranking made the city more expensive than other Sunbelt metros including Dallas, Raleigh, Charlotte Houston and Miami. The Dice report was conducted with a survey by job seekers and site visitors and had 7,215 surveys completed.
Atlanta had the 10th highest average salary for tech workers in 2021 at $107,515, an increase of 13.9% from the previous year, according to Dice. That report found the highest paying tech hubs were San Francisco ($133,204), New York City ($115,510), Seattle ($118,729), San Diego ($114,801) and Boston ($114,959).
