Developer salary growth is an inverted hockey stick

Developer salaries almost double with 5 years of experience and then begin to flatten out. The graph below shows how compensation changes per X years of experience. A graph of individual compensation over time won't look exactly like this because individuals typically only see large salary bumps when switching jobs. This graph shows what salaries at different experience levels look like at this instant [1, 2].

To try to make this graphic as useful as possible, here are a few baseline data points for two very different locations:
  • New York City: 0 years of experience has a salary range of $70k-80k, 5 years of experience has a salary range of $115k-$130k
  • Suburban Virginia: 0 years of experience has a salary range of $55k-65k, 5 years of experience has a salary range of $90k-105k
Why is this the case? Experienced engineers are not coming on to the market at the same rate companies are demanding their services. Sure, engineers graduate from college every year, but they're inexperienced and companies are willing to pay a premium for someone who can get up to speed more quickly.

How developers can take advantage of this trend
  • If you got a job straight out of college, have kept it for a few years, and haven't received major raises each year, you can probably command a higher salary than you think on your next job change. 
  • If you're a more experienced developer, think about joining a startup. You'll get paid toward the high end of the inexperienced range in terms of salary, but you can likely negotiate a much higher equity stake.
How companies can take advantage of this trend
  • Hire inexperienced or minimally experienced developers, train them, and retain them.
  • Continue to give raises to more experienced employees. These will easily out-pace the market.

    [1] These figures assume no equity compensation. This can vary significantly if you join a startup.
    [2] These figures and the graph are based on self-reported figures from job seekers and companies (not formally collected data). It's not precise, but there is a clear trend.

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