A high concentration of technology workers relocating to Philadelphia has driven up tech salaries by 11.9% from 2021 to 2022, representing the largest increase across the U.S., United Kingdom and Canada, according to a new report.
Hired, a recruiting marketplace that matches tech and sales workers with employers, published its 2022 State of Tech Salaries, an analysis of more than 900,000 interview requests and 47,000 active positions that were facilitated through its platform.
Philadelphia was followed by Dallas-Fort Worth at No. 2 and Denver at No. 3. Hired CEO Josh Brenner attributed the increased pay in the three cities to an influx of tech workers relocating from San Francisco and New York.
"Our data found that the exodus of tech workers from traditional tech hubs... to smaller cities — Denver, Philadelphia and Dallas-Fort Worth — is pushing salaries higher in those respective regions," Brenner said in a statement to Colorado Inno, a sister publication of PHL Inno.
Overall, salaries are continuing to rise across the U.S., United Kingdom and Canada for all tech roles except product management, Hired found. San Francisco tech jobs paid the most, with an average of $174,063, while Seattle, New York, Boston and Austin, Texas, rounded out the five highest-paying cities.
The report does not specifically list Philadelphia's average tech salary, however Hiring.com's website lists it at $134,088.
Most cities saw a dip in tech salaries during the Covid-19 pandemic, and the same was true for Philadelphia. Tech salaries in Philadelphia decreased by 0.93% from 2019 to 2020 and another 0.73% from 2020 to 2021.
The difference in pay between large tech cities and smaller hubs — like Philadelphia — is the narrowest it's ever been, Hired said. Salaries at startups are also catching up to those paid by corporations with more than 300 employees.
"For tech talent, moving to a larger company doesn’t guarantee a significantly higher salary," the report states. "Smaller companies became more competitive in 2022."
Hired also found that flexible work environments are no longer optional for many tech workers.
In a survey of 2,000 tech professionals about their salary, benefits and work preference, 95% said they preferred a remote or hybrid work environment, and a growing number of candidates using Hired's platform prefer remote-only roles.
About 54% of tech workers would look for new positions if their employer asked them to go into an office full time, Hired found.
Beyond employee preferences, remote jobs also pay more. Remote employers offer jobseekers salaries that are $3,000 higher on average than what they would earn in the same roles at local companies.
"We’ve found that remote-first employers have a significant competitive edge in hiring," Brennan said. "For employers to effectively compete for and retain top talent, remote/hybrid work must remain an option or else they risk losing out on a significant sector of employees who admit they would immediately look for jobs with flexible work options if asked to return to the office full time."
Of 17 tech cities analyzed by Hired, 15 of them had higher remote salaries than local tech salaries. That's up from 13 cities in 2021 where remote workers earned more. San Francisco remains the only tech hub in the U.S. where local workers earn higher salaries, Hired found.
In Philadelphia, remote tech workers earn 2.3% more than employees at local tech companies. Hired determined the salaries by analyzing interview requests for remote jobs that were sent to jobseekers living in Philadelphia.
Despite increases in tech salaries across the globe, employees still feel their pay doesn't reflect inflation and increased costs of living, Hired found. Hired surmised that tech workers would consider relocating in order for their salaries to have more earning power.
Taking cost of living into consideration, earning an average of $176,000 in San Francisco, for example, is equivalent to making $203,000 in Denver.
"If a tech worker is considering relocating to a traditional tech hub or Denver for a role, Denver would be the more lucrative option to see the highest earning power," Brennan said.
Atlanta was listed as the tech city where an employee's salary could go the furthest. An average salary of $176,000 in San Francisco is equivalent to making $224,000 in Atlanta, the report said.
The Philadelphia Business Journal recently reported how affordability, walkability, more space and easy access to city life is attracting people from more expensive markets to resettle in the Philadelphia area — particularly since the start of the Covid-19 pandemic and shift to remote work. New York transplants are leading the way.
