Why Software Engineers Are Highly Paid
Answers from an opinionated frontend developer
So there’s a question sitting out in the back of everyone’s mind: why do software engineers are highly paid?
Most of the software engineer roles earned more salary income compared to the other jobs. It seems not only me who’s wondering, but also plenty of people. There is a search suggestion on Google indicating that many people are curious about it 😂
The question also came to mind from my personal experience. Compared to my friends who also graduated at the same time as me, but work in different fields — I can confidently say that software engineers are making more.
According to CNBC¹, the average American yearly salary is $56,516 (in 2015). According to Fox Business², the average salary for an American in 2020 is $49,764. Meanwhile for software engineers, according to Salary.com³, they’re making $69,427 on average as of July 27, 2020. Indeed⁴ even said the salary is reaching $104,907 per year, LinkedIn⁵ has a greater number at $112,000. Almost tripled what Fox said.
So why are they highly paid? What qualities or values that they bring?
Last night, I created a QUESTION survey on my Instagram to ask my fellow engineer colleagues what are their thoughts about this particular topic. I would like to share the answers here in my story, added with my own opinion.
1. Supply Vs Demand
It’s a simple supply and demand. In this digital era, technology has risen significantly over the past years. Many small technological startups emerge with a vast array of ideas. Hence, there is a high demand for software engineers. Not only startups but many “traditional” companies are also in dire need of software engineers. For example, media companies, banking, and even the entertainment industry are starting to adapt to the digital era by producing mobile apps and websites.
Meanwhile, the supply of engineers can’t keep up with the demand. Adding more to the equation, not only traditional companies that are planning to go digital — but big technology startups also keep recruiting more talent each year. Some are even willing to hire talents across the country because of the limited resources. We started to see a trend in Silicon Valley in which they are willing to hire a competent engineer from the Pacific coast.
We haven’t talked about the demand in other sectors such as government institutions, software houses, consultant agencies, and many more. The supply simply can’t keep up with the demand from the industry. That’s why software engineers are rated to be highly valuable.
2. Higher Responsibilities
One of the factors that make engineers get a high salary is their responsibilities. For a tech startup, technology is the core of their business. Who’s making all that tech? It’s the engineers. This means engineers are making a direct impact on the business.
Engineers are in charge of making the product and the system should be reliable and scalable so that the company can still run its business for years. One hour of server downtime can cost the company millions of 💲dollars💲 One second of downtime could cost Amazon $1.6 Billion in sales⁶. That is a crazy number! The company’s revenue depends on the quality of the system. Therefore, engineers who make the system in the first place are considered to be having value for the company.
Engineers are also required to be ready at any given time and place if there is an issue happening, even on the weekend. There is no waiting time. The issue would have to be fixed ASAP. As I said, the longer the issue persists, the more the company suffers its loss.
Making direct business impacts, keeping the system reliable and scalable, and the requirement to always be ready to fix issues — are a few examples of the many responsibilities a software engineer has.
3. Adaptability
The technological world is fast-changing. What we’ve known a couple of years ago might not be relevant today. Ten years ago there was no such thing as mobile apps. Now, mobile apps seem to be the core of everyday life. Good engineers have to keep up with the new upcoming technologies and always update their knowledge. In other words, they need to be adaptive to the current state of technology.
Other jobs might have the same principle or knowledge for dozens of years, but that is not applicable in a world of technology that has exponentially grown in the past decade. The need to always keep up with the modern world and the latest technologies makes software engineers have to work twice as hard. Engineers are not only paid for their work to be done but also for “future work” that they might need to do by “keep updating themselves”.
So that’s it! Three things that make software engineers highly paid: limited supply for their demand, high responsibilities, and the effort to be adaptive.
Hope you enjoy the story!
Cheers 🍻 — Ferzos
Reference
- https://www.cnbc.com/2017/08/24/how-much-americans-earn-at-every-age.html#:~:text=Here's%20how%20much%20the%20average%20American%20earns%20at%20every%20age&text=The%20median%20household%20income%20in,men%20and%2040%20for%20women.
- https://www.foxbusiness.com/money/what-is-the-average-american-income
- https://www.salary.com/research/salary/benchmark/software-engineer-i-salary
- https://www.indeed.com/career/software-engineer/salaries
- https://learning.linkedin.com/blog/tech-tips/the-american-city-that-pays-software-engineers-the-most--and-oth
- https://www.fastcompany.com/1825005/how-one-second-could-cost-amazon-16-billion-sales#:~:text=Amazon's%20calculated%20that%20a%20page,many%20millions%20fewer%20online%20adverts.
