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UK Tech Salaries Dwarfed By Those In San Francisco & Beyond

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

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UK tech sector’s ability to compete with Silicon Valley and other tech hubs for the best talent could be slowed by wages

Workers in the UK technology industry are paid significantly less than their US counterparts amid concerns that more needs to be done to attract the best talent to Britain, especially after Brexit.

Salary data collected from 45,000 job seekers and 280,000 interview requests on tech job marketplace hired.com found the average salary for a software developer in London is £56,000 a year.

This compares favourably with Paris (£44,000) but pales in comparison to the $134,000 (£107,000) on offer in the San Francisco Bay Area and six figure pay packets available in other cities in the US.

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Tech salaries

The high cost of living in San Francisco and the growth of tech hubs such as Austin in the US and Melbourne, Australia is loosening Silicon Valley’s grip on the market and firms in both these cities are prepared to offer relocation packages to prospective employees.

“In Austin, the average salary for a software engineer on Hired is $110K,” read the report. “But this is the equivalent to making $198K in San Francisco when you consider the cost of living difference between the two cities.

“Notably, Austin-based companies are especially willing to relocate the right talent, with more than 60 percent of job offers going to candidates living outside the Lone Star State. In comparison, only 30 percent of offers from SF Bay Area companies are given to non-local candidates.”

“Our analysis shows it’s a great time for tech workers to consider a role outside Silicon Valley. Whether looking to stretch their salaries or to be a part of a growing tech hub, companies across the globe are ready and willing to do what it takes to bring great candidates to their markets.”

But will London be an attractive option for any potential exodus if salaries are comparatively low, even when the cost of living is a factor? Twenty-seven percent of tech workers in London are from outside the UK and immigration could be a problem after the country leaves the European Union (EU).

There are also concerns about a perceived digital skills gap in the UK, which could make it difficult to find equivalent British workers to fuel the tech sector’s growth. The government has stated that the industry will be a pillar of the post-Brexit economy.

Hired’s figures also suggest that black candidates in two US cities (New York and San Francisco) are half as likely to be hired on its platform than the average white person. This could be because their salary demands are significantly lower, although Hired has said it is difficult to reach that conclusion categorically.

“It’s unclear if African American candidates are receiving more offers because of diversity initiatives, a lower preferred salary, or a combination of those and other factors,” said its report.

Quiz: What do you know about London tech?