Philadelphia-area residents employed by capital-backed technology firms are paid 86% of what tech workers earn in the San Francisco Bay area, according to an analysis from Carta, a management platform for companies and investors.
That's slightly more than expected: If compensation adhered to adjustments recommended by the U.S. Bureau of Labor Statistics, Philadelphia tech workers would make 84% of the salary earned by employees in San Francisco, the report said.
Carta found every metro included in its report pays higher salaries than the averages tracked by the BLS.
The movement to remote work during the Covid-19 pandemic helped drive up tech paychecks, with workers from markets such as California and New York relocating to metros like South Florida while maintaining their original salaries.
In other cases, "some companies with newly remote workforces are now competing for talent in a variety of markets across the country, rather than just in their home states," the report said, another trend that is boosting compensation locally and nationally.
If the trend continues, company leaders may focus on hiring remote talent in smaller metros or outside of the U.S. to reduce payroll costs, Carta reports.
"New talent hubs may emerge outside of major cities," the report said. "Market uncertainty could also begin to cool salaries across markets."
Companies are already looking outside of their headquarter states for talent. According to the report, 62% of new tech hires this year are based in a different state than their employer, up from 35% in 2019.
The "Tier 1" cities where employees can expect the highest salaries are San Francisco; San Jose, California; Seattle; and New York.
The Philadelphia region ranks among "Tier 3" metros for tech compensation, along with areas like Baltimore, Charlotte, Dallas, Houston, Minneapolis and St. Louis. Washington, D.C. and Boston, for example, are in the "Tier 2" category.
Philadelphia-area technology salaries reached an average of $106,725, in 2021, up 10.6% from the year before. It was the sixth-highest increase in the nation, according to Dice, a platform that connects tech workers with employers.
Longtime technology hubs like Silicon Valley ($133,204), Seattle ($118,729), New York City ($115,510), Boston ($114,959) and San Diego ($114,801) continued to offer the biggest paychecks, the report said.
