How to increase SWE salaries in Europe?

I got my higher education for free. I expect to save nothing for my children or their education. I expect to have to put aside very little for retirement.

The thing is, I just can’t find an argument why I should be able to get very rich doing my job. It’s a comfortable job. It pays a good salary. I got here by taking no risk at all. I wouldn’t want to switch jobs just to drive up my pay even if I could. I have other things to think about. I have worked 20 years in the same job and so have my colleagues. This is a cultural difference I feel.

Major US tech companies earn a profit-per-employee of $200-400k[0]. That's across every employee, so depending on how you attribute value the profit-per-SWE is much higher. That gives a lot of headroom to drive up salaries when competing for hires, and in part sets the market price.

I suspect that low European software salaries are just a function of low profitability of European software companies. e.g, spotify is (at best) around $44k per employee, SAP is $41k.

[0] https://fortune.com/2020/08/24/apple-microsoft-facebook-amaz...

Europeaners seem to think getting by is just fine. They're happy that they're hyper educated, that their kids are going to be hyper educated, that their healthcare is paid for, and they get lots of vacation. Because you can't save, you are entirely dependent, in a broader sense, on the government's stability (I am not using this sentiment in a pejorative sense like some might.)

Americans want their fair share of the pie, which will always lead to certain people making more and others making less. Compensation is more than just money to us. It's vacation, stock, better healthcare, expanded education resources and benefits, buying programs, etc... This can be both good and bad. I suspect you can find an endless list of rosy and dark examples to draw from. Most Americans would like to think of themselves as quite independent from the government, whether they want to admit it or not.

The value in risk and reward versus security and stability is just different. It's okay that they're different too. Personally, I believe letting people leave the US without monetary penalties so they can pursue cultures that more match their own values is the solution. I once thought that having a system setup so that people could switch places between countries might be beneficial, one that augments the current immigration system.

I might be biased by personal experience, but I think this has less to do with US regulation vs Europe and more to do with direct competition between tech firms’ equity value, notably late stage private companies and recent IPOs. A recent example is circa FB’s IPO, Google would always try to match or beat the other’s comp. Over the long term, you’re hoping that most of your wealth will have come from equity, not salary, if youre an engineer in SV. Senior engineers earn ~half their comp as equity grants even at public companies. Salary is simply a knob to adjust risk.

Theres an interesting sort of recursion where companies compete with others slightly earlier and slightly later than them, where the more mature company promises less risk (in the form of cash and equity $ value as of the last round raise) compared to the less mature company. This means that e.g. Stripe must offer comparable or higher salaries than a series B or C company, and slightly “less” equity compared to the less mature companies more risky but higher potential equity. So the salary floor is driven by very early upstarts, and companies are pressured as they mature to increase that floor or employees leave to other companies with the same salary but less equity risk.

So, 2 things: early companies must be able to grow (so their equity over the long term outpaces or matches larger companies) and early companies must be able to pay something close to reasonable salary (in SV this is usually ~70% salary of top of market, so 90k from a seed startup vs 130k from a FAANG). Basically, more companies need to be started and access to initial investment is a huge part of that.

Been working in Europe for about 10 years now with "low" wages as a Hardware Engineer (6 figures US). Sorry but America seems like a third world country compared with what we get here. I have: 35 days vacation per year, 35 hour work week, overtime pay, free education, childcare money each month, healthcare that wont bankrupt me if I lose my job, up to 3 years in parental leave (6 mo. paid), probably other things which I'm forgetting. No amount of money would make me go back to that dumpster fire that is America.

Do you mean a particular part of Europe? I only ask because there are more factors than salary. I have friends who have moved to work in France, Norway, and Germany. They do make markedly less than I do on my US salary. However, they also get:

* Substantially more actual vacation time

* Substantially cheaper and yet similar health, dental, and vision coverage

* Less risk/stress associated with job security

* A very similar job market

I don't imagine this is the same in every country in the EU, just as technical job markets are different in the US. But working in the US Tech Sector isn't the panacea of work related issues.

I unfortunately don’t have much perspective on software development on Europe, but one of the differentiators I’ve observed in the US between high salary SWE jobs/regions and lower SWE jobs/regions is that engineered in the higher categories are considered a core part of the business and are deeply integrated across the business. The engineers sit closer to and interact more with the “money people” than in companies where there might be a layer of analysts or business program managers, etc... As a result, engineering and computing at permeated throughout the business.

This often makes these companies more agile (the cycle times for requirements and feedback are shorter) and seems to make the business more willing to pay for engineering talent generally (as the decision makers see the value or are former engineers themselves.)

This is easier in some industries than others - consumer internet and commercial software companies will tend to organize more like this then health care, for example.

So I guess my answer would be ensure your software engineers aren't just doing software, but helping define the businesses

One option is to emigrate to the United States, driving up pressure on the engineers who remain. My near-term ancestors all left Germany due to poor wages and a tendency for Bismarck to sacrifice draft-age men in wars, and while moving to the US helped their own status it also did a bit to increase pressure at home.

Just like anything worthwhile is done: through free market competition. Build a successful startup, make some nice money and attract the best in the business to work for you by making them eye-popping offers. This will make your competitors react by raising their pay and with it the whole market.

It’s how Silicon Valley reached those salaries after all...

This is a pretty simple topic if you have a good understanding of what enabled developers to pull in large comps, and what kinds of employers pay such comps. I comment on comp threads on HN frequently and don't want to rehash my entire advice, but I can illustrate one example that can be generalized to Europe and America.

Consider two hypothetical employers:

Employer 1: - We want to hire only the best. - We expect people to care about the company and act like owners. - We expect people to flex in and out of different roles. - We fire underperformers.

Employer 2: - We state exact technical qualifications for our roles. - We hire anyone who adequately meets the qualifications. - We don't expect people to do anything not in the job description. - We don't expect people to care about the company, it's just a job. - We never fire anyone.

I hope it's clear that you can make a lot more money at #1 than #2. #1 may be a FAANG and #2 may be your state's Motor Vehicles department. I also hope it's clear that #2 sounds very mainstream European in its attitude towards work while #1 oozes American exceptionalism.

In short, there's no way to raise comp without employers competing for talent but that would basically mean a complete change in employer/employee expectations.

So what happens to European developers who are good/aggressive enough to work for a place like #1? They find it in London and New York.

For what it's worth I am a dual EU/US citizen living in NYC, and my previous job took me a lot to our London office which was primarily staffed with European developers who left Europe exactly for the reasons I described.

Europe doesn't have Amerikan Dream fallacy, that by moving to a country you become rich if you work hard enough, we also don't go bankrupt after breaking a leg twice in 5 years.

Worst student debt you can get is in the UK, its fees are capped at £9k for each academic year. I paid off my student debt in 4 years after graduation, while financially supporting my family and saving for a house in top5 biggest city, which I bought 5.5 years after graduation.

When I was made redundant I got paid 300% of my salary as a security deposit + what I earned that months and cash for unused holidays, it was close to 5 months salary in one pay. I was given fair review and 3 weeks notice before my last day, I didn't go bankrupt or homeless. In fact market is so good here that I had 2 job offers on next working day.

I would not change this program for American version. I don't think my salary is that low that needs increase by a significant %. We get a lot of other benefits, higher living standard, higher job security, paid holidays (20+ days in the UK + a few bank holidays - depends on country), maternity and paternity leave (weeks or months depending on country).

It's not trivial to do. First you have to account for a lot of things if you want to make a fair wage comparison. Europeans generally work much less. Germans almost work 500 hours per year less than Americans. Cost of living is vastly different. I've heard from a lot of friends in the US they pay tens of thousands per year on education and childcare in expensive cities, that's not the case in Europe where most of it is free, so lower salary is a function of that.

The one thing that probably has a real impact is the enormous size and and profitability and competition of large American software firms for talent. There's not many of them in Europe with the exception of SAP or something? So that's a real difference but it's not easy to recreate because the European market is not homogeneous and policy environment is much more weary of big tech.

I don't actually think Europe should or can compete on wages. Europe has other things to offer. Smaller, healthier ecosystems with focus on working on tech that solves social problems, better balance of life and work, free education and high degrees of safety and equality, walkable cities, and so on. There's no need to be more market-driven.

People tend to forget that Silicon Valley tech firms used to collude to keep wages down by agreeing not to try to poach employees: https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L.... Of course, SV engineers were already paid well at the time, but nothing like it is now.

Facebook played a big role in messing up the scheme by refusing to collude and aggressively going after Google's employees (https://techcrunch.com/2014/03/24/sheryl-sandberg-facebook-r...). They started doing this in 2008, years before any antitrust action from the government.

Basically, Europe needs a rocketship tech company, flush with cash and trying to hire away everyone's engineers.

Do engineers in Europe get as much of their comp in stock as the do in Silicon Valley? My hypothesis on why salaries have gone up so high here is if you want to hire folks away from successful companies, that success means their stock grant is likely worth loads more than it was when they signed on, which you now have to match to compete.

If hypothetically every engineer at Apple hired in 2017 got $100k/yr (say $70k cash and $30k RSUs) but because the stock has 4x’d in that time, now they’re making $200k ($70k cash, $130k RSUs). To hire them away now you have to offer $200k as a starting package. And that’s for every single Apple employee with significant stock comp. There’s a critical mass of successful companies, so for google to hire from Airbnb, they have to pay that skyrocketing-comp premium. Airbnb has to do the same to hire from Uber. Uber has to do the same to hire from Facebook, and so on.

Stock based comp in an on-average-growing competitive environment means market comp goes up too.

While I think that lower salaries are a result of multiple factors, one interesting data point is that governments actively disincentivize high salaries for workers through taxation, and low salary requirements for visas.

For example, the "high" salary tax income bracket starts at £50k in the UK [1] and at €54k in Germany [2]. More or less, these rates are similar across western Europe (except for Switzerland). In the US, tax brackets are far more permissive [3].

Also, in the UK a £25k salary is fair enough to guarantee a visa [3], or €40k [4] in the Netherlands, hinting that these governments think that such a salary is high enough.

Most policies enacted by governments, I think more through ignorance rather than malice, assume that workers making ~€50k have enough and shouldn't need to get increased.

While other factors (lack of big companies & lack of VC investment) probably have a higher impact on the low wages, I think that government policies also have an affect on it.

[1] https://www.gov.uk/income-tax-rates [2] https://www.academics.com/guide/taxes-in-germany [3] https://www.bbc.com/news/uk-politics-51430811 [4] https://www.iamexpat.nl/career/employment-news/2019-income-r...

I don't think it's cheaper to live in Europe than in US.

The reasons for lower salaries in my opinion are:

- most developer jobs are in "real" businesses, which see IT as a cost center

- compared to US, there is a vanishingly small number of technically innovative IT-first companies, so there's little competition for talented professionals

- taxation is progressive and harsher in general due to being the primary source of govt income in most (all?) European countries, and increasing gross salary kinda stops making sense at some point

It would be great, if these issues were addressed, and there are well-known ways to do that. But I'm not sure, if increasing salaries is a noble goal per se. While much lower than in US, they are still decent and allow one to live a comfortable life. So it's rather US being an outrageous outlier (no wonder, given that post-WWII economy is operated on their terms). The elephant in the room here (as almost everywhere in the world) is real estate. Now that one (and prevalence of mortgage) is a huge issue, and it needs to be solved at all costs, even if just for the sake of younger people.

As for salaries, most developers simply don't generate that much real value (real, not money). Though they somewhat compensate for inproportionate incomes on a "higher" level of economy by over-spending the surplus above the necessary living costs, though I doubt it's by design.

Overall, I'd argue, that developer (and many other occupations) salaries should be lower, so that we had fewer get-rich-quickers to work and to compete with. To be clear, I'm not saying that a dev should earn as a janitor, but rather on par with other "highly skilled" occupations.

Basically companies do not recognize the value engineers bring. They are seen as costs which need to be minimised, when in reality it's their core business. Little is invested in helping engineers to get better. Agile practices are implemented poorly. People do not start tech companies. The average software company is a body shop that rents out to insurers, banks and the government, which aren't really tech. This model is only popular because it helps business dissociate itself from tech and gets around all employee protections. More lucrative models like Freelancing are sometimes legally restricted because of the same employee protections, so is not popular. Engineers wait for the hours to pass so they can go home. Code reviews are a tool for office politics. Software engineering is kind of a blue collar ish job which employers think anyone can do. There's just no cachet to being a programmer in my slice of Europe. Simply put, there are so many things wrong with software engineering here that I would not know where to even start to address the issues even if I had the power to do it. And it's not just about money too. It's about something being completely and utterly broken.

Other reasons for the U.S. salaries not mentioned yet:

0) Banning of non-competes in Silicon Valley (!!) and ease of incorporation / listing on markets back in the 90's and before

1) Foreign investment in the U.S. (Saudi, Chinese, Russian money due to favorable treatment, anonymity (!)) and presence of U.S. dollar worldwide as a reserve currency - lots of that money ended up in Silicon Valley (Softbank etc). This especially matters since a lot of the compensation is in RSUs and the U.S. stocks have benefitted from above.

2) DotCom bubble because of (1) inflated salary expectations; U.S. had a head start over other countries also because of the DotCom bubble.

3) Personal bankruptcy laws are more lax than Europe I believe (although I'm not positive), since you can discharge all personal debt in a bankruptcy, cost of risk is lower (leads to more risk taking).

4) Gap between EU/US salaries has varied depending on exchange rate. Generally the way the world economy is set up tends to strengthen the dollar (everyone needs them to transact oil and pay foreign obligations after 1971/1974). That might be changing though; with a weaker dollar salary gap will naturally shrink.

5) As people mentioned before: vacation, school, healthcare cost differentials (though my hunch is that this is a small effect if any)

6) U.S. is a unified market of ~300 million people, most speaking English. EU is many smaller distinct markets because of language & cultural reasons (more-so than U.S. states), so more effort required for growth.

Probably some other reasons that slipped my mind at the moment.

Adding more reasons:

Europe as a single entity is problematic, there's a north-south gradient, the cold war east-west divide, and EU/non EU.

* Switching jobs was less common, there used to be loyalty from both sides.

* It's easy to get competent workers from outside of "western" europe with a matching culture and timezone. I've seen a switch from outsourcing to poland(former east) to the ukraine(non EU+east). This is good for the polish guys, they're almost at our level now.

* Residence requirements for people outside of the European continent are low, and on base wage mostly lower than for any other sector.

This makes the wages more internationally competitive from a business perspective, and hooks into "Individual contributors in Europe are not as valued as much as managerial professions" Because you can get the work from somewhere else cheaper.

Be more productive. Companies can only pay more when they make more.

SV is awash in capital because it grows earnings in the 20+% YoY basis. Euro zone companies don’t seem to do this.

My understanding is that EU regulates high growth away too early in corporate life cycle, so anyone wanting to grow fast goes somewhere else.

You need to increase demand:

* Offer tax breaks for tech startups. The UK has a whole suite of these and London is number one in EU (out of now) for tech startups

* Similarly non-tax pro-entrepreneur reforms and help: bankruptcy protections (the US does this very well, the UK very badly); access to mortgages / leases and credit for the self employed; better management of taxes and benefits; reform of regulation for smaller businesses; and media campaigns to make starting (and failing at) a new company more acceptable socially. The UK does great at some of these (starting a business is easy), badly at others (bankruptcy is a nightmare here).

* Legal reforms around freedom: so you can break non-competes (the UK does ok at this and the EU too I think); so it's harder to enforce IP that isn't being actively used; to prevent large established companies from bullying smaller ones (less of a problem already because the rest of the world doesn't follow the "American Rule" for court cost...)

* there are a bunch of smaller initiatives that can assist too: government buy-local and buy-small policies; entrepreneur training and projects in schools and universities, requiring graduate programs to accept delayed/older entries (so you can take a year off between uni and SafeCorp without worrying you'll never get back on the ladder), encouraging contracting over employment.

All of that should drive entrepreneurship. That will hopefully build an eco system (suppliers, capital providers etc.) and it can grow organically from there.

I'm not sure it will ever be Silicon Valley in London or Amsterdam or Berlin. Partly there are established industries that soak up talent tech workers (finance in the UK) but also because software is a "winner take all" market most of the time. Even hardware can be that way too. And that's just not the European culture.

1. The culture around equity should be changed. There are too many companies where employees are only offered equity if they ask for it, and people don't understand it. We can educate the SWE community about matters of financial literacy and normalise equity for all full time employees. I personally will not accept a job at any company without equity.

2. Focusing on salary. We need a european alternative to glassdoor and it needs to become popular. People need to know what they are worth. We are quite shy when it comes to discussing salary. TC info is more readily accessible in the US.

3. Europe needs to grow tech giants that demand top tier talent. That's the main problem with Europe, there isn't a huge amount of ambition to home grow 100bn+ companies that attract the best talent globally. Europe is at a disadvantage because it takes fewer risks and it's also more likely to sell out before reaching tech giant status. We are all using Google, Facebook (or some product of) and Amazon (in countries where amazon can effectively avoid taxes). And the UK sold off ARM, though there is ongoing discussion about that.

If you look at industries that are world leading (i.e banking in London for example), you'll find opportunities to double or triple your salary. Turns out that enough of us are turned off by the idea of working in the banking sector that it doesn't appear to translate into pressure for talent. We are also very well educated so it's not as hard to find people

I've noticed from recruiter email that some US companies have decided to go fully remote (no doubt due to COVID-19) and have started looking for talent in Canada, offering a bit more compensation than our local one (not parity) so I expect this effect will start pushing salaries up outside the US, starting with us in Canada due to time zone/language/culture.

Western Europe is the worst place to be a software engineer. Your salaries will only be like 20% above average salary in the country. However, unlike other jobs, you spend tons of time to learn new technologies, visit a university and all that for absolutely nothing. Decline of Europe is inevitable.

In Germany, a tiler with almost no education will make more money than a software engineer.

I too lament the comparatively low tech salaries in Europe. But I suspect the comparatively higher quality of living keeps us happy enough that we won't move (back, in my case) to the US for just more income.

That said, this new +remote world is providing new salary competition from US companies who do pay more but don't require moving to SF for example. Even so, the work-life balance here is much better than in the US, and I suspect part of that also has to do with salary. If the salary is not super high, the workers feel more entitled to take their actual vacation days. In the US, not only are there fewer paid vacation days, but many employees don't use them all.

Many years of my life I took no more than one week; when you're gone, stuff happens, landscapes shift, job security weakens, etc. In Europe however, your job is more likely to be as solid when you return from holiday as it was when you left for holiday.

I am debating right now whether to stay with my medium pay happy relatively easy company (with very good job security) for more money and less of the other things. We shall see.

What does bother me a bit is seeing managers who frankly use less of their brains getting paid as much or more. I don't bemoan doctors earning more than me because I recognize they have worked harder, studied more, and have more real daily risk in their work than I do. But likewise, many managerial positions can be trained in a matter of weeks, but the work I do takes years to learn and perfect. But c'est la vie.

the problem here you're only looking at one measurement. but life is not measured using one number. honestly, some things can't be measured using numbers. and to those saying competition raises salary, I would say they're roughly right - but you're falling for the narrative fallacy.

the reason, salaries are high here (US) has mostly to do with inequality. remember the average ceo has 2100x wage than the average employee. and likewise, that also pushes the wage envelope for people in the profit center. but in tech not everything is code. support people etc are massively underpaid compared to the value they produce. also while scrum masters are massively overpaid. so yeah you answer is more cultural!! not competition or market factors. but cultural.

in america culture is individualistic, case in point there's huge wage discrepancy between people working the same role | level e.g one Software Engineer could make 20k more or 30k because of negotiation skills.

and I bet quality of life of an average engineer in low paid Europe is way better than your run off the mill engineer here in the US. Healthcare is atrocious! let's see what your high salary will do when you get a surprise medical bill. Last thing SV salaries are not representative of average american tech salaries. most people here seem to forget that.

I would like to pose the question: why do you think these salaries have to increase?

I work in Europe in a SW company, earning a well above country-average salary (around 2.5x). I live quite well. My colleagues live quite well. The company is doing quite well.

Do keep in mind, that every extra euro that ends up in my savings account, is an euro that is not ending up in someone else's wallet in the country where the customers are. That is, if my company decided to raise our salaries, the customers would have to raise prices on their customers, and so on, I would have more savings, but someone else wouldn't be able to have a coffee or pay their tuition money.

Why then, would we want the already well above average salaries raised?

Speaking of low salaries, I saw a $30K/year job ad in a western EU country for a research engineer who will need to build a secure and scalable infrastructure - and I laughed hard. It wasn't even scam, quite to opposite.

There is a reason why Poles, Bulgarians, and Ukrainians are ubiquitous on remote teams in tech: they are cheap, they are hungry for a challenge, and they get gold medals on the IOI (at least the Poles and Bulgarians do).

Dramatically increasing the pay of these people would be doing them a disservice by making them less employable.

You say those reasons aside, but I think they’re the difference that makes the difference. No practical changes to the Euro tech job market will change the salary discount compared to the U.S. barring a dislocation in the factors you mention.

It’s generally true that the US is more comfortable with variance in outcomes than the EU. This is a cultural thing which also presents legislatively.

Competition. The only way a company will pay you more is if you threaten to go work for the one across the street. European labor laws actually work against the interest of employees in this case, since everyone there has longer term contracts, long notice periods and strict non-compete agreements.

I also don't agree with your second point. Salaries of software engineers in the US aren't "skewed" or "inflated". If anything they are underpaid. Up until recently there was a lot of illegal anti-poaching collusion happening among the big tech companies which kept salaries low.

There are a few FAANG-ish companies in my country that pay well. Besides those companies, it is really hard to get a good salary. Other companies top out at 60-80k EUR. And then you'll probably need a lot of experience. It is not hard to pass the whiteboard interviews, but if the senior devs only take home 80k, why would they give you more?

I'm looking for a job change. Purely for money. Anywhere in Europe is fine actually. I mean, looking at the US, how hard can it be to earn 80k EUR with a CS degree and a few years of experience.

There are a few reasons why they're lower, which other commentators have addressed, such as: different tax regimes; the welfare state; and the scale of the European market.

As an aside I think it's also important to point out while there is a difference, it's not quite as large as you think when you factor in the pay of contractors being around the 500euro mark. These people give up the right to sick leave, workplace security, and supposedly career advancement. Personally, I only contract in the UK because there is little career advancement beyond being a senior engineer anyway, and the rate more than makes up for it. I'm a fairly middling engineer in London, I'm 24 and I made 120GBP last year (I just have to be content I'll never make anything more than that).

You're right in attributing the difference in pay to corporate culture in the USA. In the USA where a senior engineer at a Silicon Valley style company will be seen as a key part of building the product, as if they were a product manager.

At nearly all the companies I've worked for in London, engineering has played a subordinate role to product managers (who also stand the most to gain from a successful project). This subordinate nature often takes the form of siloed access to business data: where I frequently have to fight to run queries on PowerBI; or to sit in client meetings.

Asking: Do European tech companies just offer lower salary, or do they also offer less equity?

In the US, most people I know made a significant chunk of their wealth from their equity growth, especially as equity grants grow much more than salary, as people get promoted.

Join Google and move to Switzerland. It isn't that easy to join Google Switzerland but it pays like Silicon Valley.

As already discussed in many places, it's not possible to reach US/SV levels of salary in Europe due to differences in the model of society, taxation etc.

Note however that US companies in Europe pay definitely above the market. So it's not impossible. Partially they pay more because they have more money, as they have access to VS/are listed on stock exchange (and being US-based is almost a most to have this opportunity, even if there are a few successful EU companies)

IMO the diff is that in US companies, developers are more than code monkeys who execute what they are told by the PM. Developers in US companies have more impact hence higher salary: This article nicely summarizes this: https://blog.pragmaticengineer.com/what-silicon-valley-gets-...

Can we reproduce this in EU? EU historically has been more hierarchical when it comes to doing business. Young founders probably are less like that, but we need both different attitude to doing business ("IT brings value", not "IT is cost center") + the capital.

Stop accepting low salaries. Do not allow the H1B-kinda cheap-labour visa for tech workers. Perhaps be extra careful with those tech-body-shop companies like IBM, Accenture, Cognizant, Wipro, HCL, TCS , Infosys, and their smaller siblings

How to increase salaries? Hah, fundamentally change the supply and demand of labor. Not gonna get around that basic dynamic.

Too many unemployed / underemployed educated people willing to take the job for less. Too few companies generating enough profit and growth to employ such numbers of people at good salaries.

All you have to do is change even 1 of those 2 things, and get out of the curse of the middle aged advanced economy.

In France, IT consuling and outsourcing companies are promoting wage dumping. It is not common to be an independant SWE, so consulting companies have a better supply when they hire, thus lowering the wages.

Now, cuturally speaking, in Europe the cult of principles and values reigns whereas in USA it's the cult of god and money (which both work together, cf Harari's thesis).

Interesting topic demanding hours of debate.

Make non-competes illegal (or, well, unenforceable).

Why? I earn ~8x the salary my Mum ever earned, I earn more than anyone I know that I went to school with. I can support myself and my family. I started paying attention to my spending last year and realise around half of it was on stuff that I not only didnt need, but felt better without (tbh it was mostly takeaway food).

Buying a house was hard despite my "high" salary, thats ridiculous, but I don't think the solution is to earn more. I would like to see more support for my mum who lost her job of 28 years due to COVID, I would like to see less homeless addicts on the street due to lack of support, I would like to see the people around me working as hard as they can barely able to pay rent to have more options.

Seeing what tech has made of the Bay Area and asking for more of that please is misguided imo.

> Europe has less freedom of enterprise (debatable)

You would be suprised by the amount of shit you have to deal with in Italy in order to start even the smallest company.

From what I know of the UK, professionals, executives, and the professional service sector are some of the best compensated roles. This may be the case for any EU economy with a burgeoning financial service sector, too. It’s a similar story in NYC though the city has more and more developer presence than 10 years ago.

The more your SWE role can look like that of an auditor, accountant, management consultant, or financier, the more you will be valued. (Literally: valued.)

I think the traditional solution along these lines is to become a contractor, which I don’t think is out of line with the reasons given here for why US entrepreneurialism is so well paid.

I got a simpler explanation - it's what the hiring market allows to happen. If they want to hire a SWE in Europe the market will allow them to offer a lower salary. They set the salary lower in Europe because they can.

European software companies are generally creating less value compared to US ones. Market cap of big tech companies in Europe vs US is probably the best proxy for that.

Makes sense that less value will trickle down to employees IMO.

You should look at all salaries. Broadly US salaries are much higher across the board - whether in IT, finance, engineering, industry etc. So the question should be is how to raise salaries in Europe. Broadly, in economics salaries are tied to productivity. This is best captured by total factor productivity. So you would need to make economies more productive across the board. You can also generally predict the highest salaries with this. What is the most productive economy in Europe? Switzerland. Where are the highest salaries? Also Switzerland.

Remote work will take care of this. Developers will work for companies in USA that can pay more.

Companies want developers and will pay market rates. We will converge towards a global rate for devs.

It is not only SWE jobs that have lower salaries in Europe.

Broadly speaking all jobs in Europe have lower salaries; the living standard in Europe are considerably lower than in the US.

The US has a GDP pr capita of 65.000 USD, whereas the number for EU is just 36.000 USD.

So what can we do?

My suggestion would be to do as the Americans: Expand our military ten-fold, enforce our currency as reserve currency onto the rest of the world, run massive deficits.

We used to be really good at this stuff, too bad we have fallen behind.

Let’s be honest: most jobs are underpaid in Europe. Especially the lower wage ones. Living costs are rather similar in the us and in the eu. That mostly depends on what city you live. You can’t fire people easily so there is a huge risk involved into employing people. Especially low wage jobs. High taxes for companies and high income taxes add to that and you generally have less money to spend at the end of the month.

One way things might become more competitive is when more people become freelancers. The freelance market is more volatile than the rigidly regulated traditional labor markets allowing for larger pay increases during good times (and also decreases during bad times), in general, it approaches a more realistic compensation of real added value.

Personally I've greatly benefited from becoming a freelancer in Europe and have never been one day unemployed since I started over 7 years ago (4 different customers in total). The significantly higher income (almost 3 times my old, already decently above average, _net_ income) royally compensates the lack of unemployment benefits or reduced pensions.

I feel that if more devs would become freelancers it would create real upward pressure towards compensation because compensation isn't entrenched in company policies and regulations.

One downside is the proliferation of those in-between rent-seeking businesses, they're probably needed to get started initially but they take huge cuts and have a lot of absurd contract requirements so it's wise to develop an active strategy to find jobs without them.

This is just a PSA for those comparing financial (in)equality between Europe and the USA: income inequality is different from wealth equality. Income inequality might be lower in Europe but apparently wealth inequality is relatively high.

This video gives a good explanation about their difference: https://youtu.be/Ot4qdCs54ZE

> how can the European tech job market become more competitive?

As an European (working in "tech"), first and foremost:

The salaries of teachers in primary and secondary education must be at least doubled or tripled. The rest will likely trickle down from that.

Software engineers already make a very good living in Europe, no need to give more money to them. If anything, useless managerial jobs must be culled.

Start contracting remotely for US based companies.

For them, you’re cheap(-er) labor, for yourself, you’ll make more than what you used to make in Europe.

My 2 cents: we are living in a certain time when where you live is not as relevant as what you do. IMHO, if you work in areas of high demand and few available professionals (such as machine learning, artificial intelligence, quantum computing, cybersecurity, machine-human interface, etc) you will be a desirable asset and will probably be in the position of choosing what offer is the best one for you. Recruiters are going crazy on Linkedin right now and before you ask they let you know that you can work remotely with very competitive salaries. So as an attempt to answer your question as of how to increase SWE salaries in Europe (as in any other place in the world really) is to consider making a move towards some hot career paths related to areas such as the ones I cited (not restricted to those obviously). I am a firm believer of this type of initiative. It might take time and be very challenging (and it will) but it definitely pays off.

Warning, this post is a bit cynical. Okay, it is a LOT cynical. Sorry.

I suppose this is obvious but the traditional way of increasing prices is to lower the supply. If you want SWE's to get more money, first pass a rule that a SWE has to have some EU certification, and make the certification something reasonably expensive and not easy to get, say a certificate than can only be granted by accredited authorities after some number of years of study/testing/work.

Back in the day that was the role of guilds. They trained and tested individuals and at some point granted and individual "master" status. Consumers paid a premium for goods and services provided by a "master ."

These days, 6 weeks of "coding boot camp" or maybe spending your days hanging out on mailing lists and watching youtube videos can give you the illusion of being a "SWE." I say it is an "illusion" because while a person doing this can write code it doesn't really mean they can write code that will be durable. Much like someone who considers themself to be an automotive engineer because they grew up doing their own car maintenance.

That said, there are a LOT of programming jobs for which someone who learned coding casually is perfectly appropriate. Just as there are jobs where such people would be completely inappropriate. Unfortunately we call both sets of people "SWEs" when the job requirements are quite different.

An interesting exercise would be to survey jobs and salaries for software engineers an see if you could correlate salary with job responsibility. For example, does a web site "front end" engineer make more or less than a "operations/infrastructure" engineer? Does an engineer writing embedded software for modem chips in phones make more or less than an engineer writing embedded software for a toy. Do engineers writing software for vehicle control systems make more or less than software engineers writing drivers for USB peripherals?

My point here is that because software is eating the world "SWE" has grown as a category to span jobs that are trivial and those that require years of study and experience to do.

I would not be surprised at all if the "simple" jobs were much more prevalent than the "hard" jobs and so your dataset's salary numbers would be more interesting to look at as percentiles rather than as an overall average.

Is it just the VC thing? There is heaps more money sloshing around in Silicon Valley than anywhere in Europe.

Then market dynamics have come in and you fund 1 company with a gazillion dollars it pays Market + 30% then another company gets a gazillion and it pays Market + 30% + 30% (of course it isn't all cash it's tied up in options, and bonuses etc).

So when someone at google say earns 350k/annum* it's not as insane as that sounds to a european because they actually mean something like: 180k (money) / 100k (shares) / 70k bonus (I mean it's still insane). So having companies and a healthy stock market, and bonuses are usually tied to performance of individual and/or company so It's possible in a bad year they dont get their bonus and their shares reduce heavily in value.

* No idea if this is even ballpark, but just random names and numbers for example sake

Costs don't scale linearly with size when you're a tech company that doesn't make physical objects, so large tech companies are insanely profitable because their revenue goes up a lot faster than their costs as their grow. Even small companies can raise a ton of funding if investors think they have the potential to become very big. Some of this money trickles down to the engineers.

It's a lot easier for US companies to become large because the domestic market is huge and there is a common language and regulatory framework. The EU does have a common market but there are still more language/regulatory barriers to expansion than in the US. The EU is also much poorer than the US. France has a lower GDP per capita than Alabama, and they are one of the wealthier EU states. This means it's harder to make money selling to European consumers.

Plenty of good points but don’t forget that the fully loaded cost to an employer of a European employee is anywhere from 1.5-2x of what it is in the US. This alone is a major driving factor since it doesn’t matter how much of your salary you take home, it matters how much you cost the employer.

In my experience, salaries start getting much more similar US ones at the staff/principal level, where salaries get into 170k ~ 200k USD/year range and total comp can go into 500~1M USD/year, at least in the main markets (UK, Germany, Sweden if you are working for Spotify).

My impression is that in Europe software development tends more often to be considered a cost center, rather than a profit center.

At its core I suspect this difference comes from the fact that after WW2 Europe lost its place at the cutting edge of scientific and technological development. There are still companies and universities pushing the boundaries, just fewer than before (due to the massive brain-drain caused by the war). In turn, European companies often tend to play catch-up and they more often need competent executants rather than independent innovative thinkers. Competent executants are cheaper as they do less significant work.

To this you of course have to add the social security, shorter office hours, longer holidays etc. that you get in Europe, but maybe not so much in the US.

I wish European companies would offer stock options as part of their compensation package.

The only European company that offered me something similar was SAP and it was a ridiculous one time 9k EUR.

The American 4-year vesting system is much more attractive. But somehow EU startups won't do that.

Unlikely. Education is much more expensive in the US which means having a degree will fetch a higher premium. With free education European software developers need lower salary to make getting the education worthwhile.

Also European work days are much shorter. A key reason American software developers earn more is because they work a lot more hours.

Last time I checked this I think I concluded I had much better hourly salary here in Europe than in the US because work weeks where crazy in the US. Not to mention much shorter vacations. I got 6 weeks full paid vacation with plenty of national holidays on top, and long paternity leave for each kid.

It is unrealistic for why we should have the same pay as Americans with all the benefits we enjoy.

In Silicon valley, its usually a race of execution. Hire an engineer today at any price rather than wait for tomorrow. This is due to sheer competition breathing down your neck. I do not see this in Europe and hence they do not have the urgency and low wages.

I'm obviously biased but... Transparency.

I've heard from compensation and hiring managers directly that Levels.fyi has had an impact on compensation. We believe we're making a significant dent in the market.

UK Here. Keep salary how it is, give me free education including University (as we had 10 years ago), give us free healthcare (which we're clinging onto), give us decent pensions (which have got a lot worse over the last couple of decades), give us affordable housing. Let us choose our work location, so we don't have to commute to London or anywhere (COVID may actually improve this!).

Unfortunately UK doesn't highly value technical skills - real engineers (civil, electric, mechanical) are even worse off. To improve things many have been forced to go to Asia, US or Germany.

It would be nice to earn more as a SE, but not without retaining the stuff in the first list.

I'm pretty happy with what I'm getting in Denmark. I think there are many jobs more important than what I do (teachers, nurses, doctors and so on) that get way less than me.

I do wish we had more startup culture and VCs in europe..

Salaries in most European countries have "batteries included" by design of society.

Free/cheap education from zero to graduate, free/cheap health care, free pension plan, free job security, ..., you got the point. In turn you get a beautiful, diverse, stable an extremely well connected economic/social/natural context. Some countries (I can think of Italy or the Netherlands) also offer consistent tax discounts for qualified foreigner workers/entrepreneurs moving there.

I’m SWE for 10 years. I started with very low salary, and I’m about to start a new job in next month and be at the very top (7k euro net, monthly).

TBH I do not need that kind of money. I do it for new challenges that come with it. I live with my partner, we both had our higher education for free, we plan no children, and we both have 80k euro in our saving accounts.

Why would I need to earn more? I would prefer to pay more taxes so everything is growing more evenly - less poverty = less crimes, more happiness.

Just my $0.02

My understanding is that high SWE salaries require the confluence of two factors:

- Competition for talent.

- (Potential) Output value.

I think a very rough rule is that at a FAANG-like company, a really good engineer can be delivering at least $1M in revenue/value, per year.

So the only logical conclusion seems to be that there’s too much supply of qualified engineers. But then that leads me to believe that many big European tech companies are just piling up money in a vault somewhere.

So my question is: who gets that vault money?

I am based out of Europe. I am a developer here. I have worked in a different tech market before coming here - India.

The whole of Europe's tech scene is smaller than India's. I think that is the reason for the pay gap. Even despite that the pay for engineers is significantly above the median wage.

I live in the Netherlands and I make a salary similar to doctors, lawyers and dentists. So the face value of the salary may be lower but it is a lot for here.

Your second point is the main reason. A company that can generate more revenue by hiring more devs is incentivized to hire more devs. [1] As an investor this is a no-brainer.

There are plenty of US companies that hire devs that do not have these economics, but they’re forced to pay more or loose the few developers they have.

What reduces the upside of European companies hiring?

[1] Calculate the revenue per employee of Facebook, Apple, Google etc to see how much money is involved.

Admittedly I don't know much about work relations in Europe but are SW engineers unionized there? A union could 1.)allow workers to aggressively collectively bargain for more money 2.)add additional requirements (licensure, education requirements, etc) to keep down the supply of labor. I'm not saying such a move would be good for everyone, but it could be good for those who become members of the union.

Successful Silicon Valley companies have an incredible amount of revenue and profit per employee. Software engineers create a lot of the leverage that drives those numbers. As such, it does not seem like such a big deal if they are paid well (excluding labor market demands). If European software companies are seeing similar numbers, they are ripping off their engineers.

This may sound stupid speaking as a non-american engineer, but do engineers really need to earn insane amounts?

We already earn well above average, don't have to pay healthcare and bay area rent.

I don't see many experienced devs/engineers complaining that they're not paid double like americans, because we already earn enough to keep us in a decently above average lifestyle.

It is changing slightly;

Like right now in Munich, there is a boom: Google and SAP are building in Munich right now; Apple isincreasing its workforce, Amazon rented new bigger offices and is also already at 2,5k employees and they have a warehouse in munich as well.

This will pull alot of talent away from the small companies and increase the general salary numbers.

> even adjusting for lower cost of living

Ha, good one! If I wasn't living in Europe probably even three concurrent full-time FAANG-like SWE jobs for the last 10 years wouldn't cover the medical expenses I have accumulated by now. Makes sense people earn more money over there. And don't even get me started on my education ...

I solved the problem by being self-employed. No I can simply "export" my services in better paying countries.

If you find that an employer tries to pay you less after moving to Europe then perhaps you can find some good negotiation points/advice in an article I wrote recently:

https://dusted.codes/equal-pay-for-equal-work

Isn't one of the reasons that the total cost of employing a person being significantly higher. I believe I read that in Europe it's often calculated to be about twice the person's salary. I could be mistaken but don't have the patience to look for the source at the moment.

Simply put, internet giants taking a majority of their profit from the global market, and since a large share of those cooperations are headquartered in the valley, where they would have most of their staff, reasonably, valley pays are much higher.

Salaries in the US are not that much higher than in western Europe if you exclude Big Tech. Curbing the power of Big Tech is pending a new international tax agreement (don't hold your breath).

The European tech job market is plenty competitive, especially if you're not looking just at money. I gladly moved to Germany from the US, taking a lower salary. I have never had less stress.

As a contractor/freelancer one could earn €70 an hour if you’re decent. Earning over €100K a year can be achieved this way.

Our rates are up to €100 an hour. The minimum rate we’re currently working at is 60

Create a union for software engineers, make many software engineers join and threaten employers with labour strike. It works for other professions, so why not for software engineers?

I think a lot of people isn't the fact we earn less, because we do get more benefits.

We acutally earn less than other professions like accountacy, etc Where as in america that isn't true.

Salaries in Europe are less spread out than in the US and you don't need a lot of money to live a comfortable life here. Plus, European companies are smaller.

Just a random question. But is it common that SWE is used as a shorthand for Software Engineering? In the Netherlands I always have seen the shorthand SE instead.

More jobs, less candidates, higher salaries. Nothing else.

Americans are hired at-will, with barely any job protection, where as Europeans received far more protection and regulations governing paid time off, universal healthcare and so forth. You're not being paid as much as Americans in Europe but you're also treated far more humanely. I think the question isn't how to increase wages in Europe but how to get the rest of the world to adopt Sweden's labor laws, assuming it has the most progressive ones. I'm an American who would gladly accept Swedish rates with Swedish benefits.

Does it become more competitive by increasing salaries? If anything, increased salaries can make outsourcing to say Ukraine more attractive.

? Companies have to make more money.

Salaries will invariably follow because the pressures for talent become very obvious.

European tech companies can raise wages 4 technical workers by participating in workplace democracies

Careful what you wish for. The US has no guaranteed paternity/maternity leave, and the majority of workplaces have less than a month of vacation time. Then there is the healthcare system.

make more laws that make it expensive to run a company so never get big companies which in turn in results in no big community/supply and lack of entire eco-system.

Eliminate affordable housing.

You have to destroy your social safety net or escape it.

It is about the mindset that needs to change for the SWE salaries to increase. I was working for a world leader in mobile space. The company was located in a place where there are lot of startups, big world leading local companies, lot of investment activity, US companies etc. The salaries are pittance in that area even though it is a major place of tech and innovation.

I will give you an example of what is the mindset of people(mostly HR) here. There were major changes going to happen at this company I was working for(we didn't know at that time, but came to know much later). The usual trick HR plays in these types of cases is to increase some perks to keep all employees "happy" so that they don't leave the company. So the HR of this company announced a perk via email, that the company will be providing "fruit bowl" to employees every day in the morning. Everyone was excited as there was no other means of eating at the office except for a small vending machine that delivered limited supply of sandwiches and a small coffee machine(did I mention that this company was a world-leader?). The day was announced for the "fruit bowl" perk. So on the day of the perk, when people came to the office they saw that a small bowl of fruits was kept in the "kitchen". There were 2-3 bananas, 2 pears, 1-2 kiwifruit, one apple and a bunch of grapes. One senior engineer who was with the company almost since its inception sent an angry email to the HR and CC'd it to the rest of employees at the office asking them how on earth this fruit bowl was going to be shared between 50+ employees at the office. The HR's reply was(again CC'd to everyone in the office) "But there are grapes"!

And I am not kidding you, I saw this type of "perks" being advertised in the country where I am. The perks are something like this:

"We provide our employees with lunch on Fridays" or "We provide our Employees lunch on first Thursday on the month" etc. What are engineers, beggars? But that is common in companies that are founded in the country where I stay. When I moved to an US founded company in my country, not only did my salary increase substantially(by local salary standards) but the perks were something like this:

Breakfast, Lunch, Pizza if had to stay late, unlimited supply of coffee, onsite postal service, onsite laundry, haircut, manicure, shoe-polish, ironing service, on-site shop for snacks, payment for car fuel(extra pay if the car was environment friendly), 24-7 access to free gym at the Marriot, discounted shopping coupons and the list goes on. And this was not FAANG!

The reaon this is happening is because(I learnt this indirectly), the local companies collaborate, in partnership with recruitment agencies, behind the scene to not only keep salaries low but to share the information with HR that someone is looking for a job or has interviewed at some other company.

In the US, if I am not mistaken, there was a very famous litigation that forced US companies to stop collaborating in artificially keeping salaries down and deliberately not hire from certain companies. This is not there in Europe I suppose.

No thanks.

What’s the incentive for companies to pay European devs more?

The problem in Europe is a cultural problem, SWE are seen as factory workers, only with managerial position being seen as "successful" ones.

Your university education and healthcare are free, your public transportation is ubiquitous and functional, and your retirement is a bit more secure than ours.

The method of financing these things (VAT) affects your employer's top line.

Where in the United States we get to see the money first and then have to dispense it, in Europe, it's gone before it even shows up as revenue to your employer.

To-may-to, to-mah-to.

I doubt it's strictly SWEs who are affected by this phenomenon, either. Most of your professionals probably appear to make less than their U.S. counterparts.

Lower income tax. Lower corporate tax. Eliminate onerous labour laws. Eliminate unnecessary regulation. Improve English education. Raise public sector tech salaries. Stronger accounting and capital market regulations. Stronger contract laws.

Stop skilled visas and free movement of people within the EU.

Create a housing shortage. SV salaries are inflated due to COL in NYC/SV

In my personal opinion:

- Increase immigration. Especially from China and India. - Figure a way out to clip the wings of EU while keeping the free trade and open EU borders intact. EU's unelectable government servants are bringing immense harm.

You see low salaries, I see more salary equality between engineers and non engineers. Most engineers don't add that much more value than other people in the company to justify earning 2x or more.