This article was originally published in BIV Magazine's BC Tech issue.
In 2021, salary increases in B.C.’s tech sector have blown past compensation budgets as companies fight to attract and retain critical talent in a highly competitive global talent market.
Since 1994, HR Tech Group has been producing an annual salary survey to provide B.C. tech companies with in-depth local market data. Our member companies rely on the survey to inform their compensation decisions and total rewards practices. In 2020, the survey expanded and now includes data for both B.C. and Alberta.
With the ongoing pandemic, a global shift to remote work, mental health challenges, social justice movements and ‘the great resignation,’ this year’s report is unique. It’s also representative of what we’re seeing elsewhere in Canada and beyond. We are not alone.
Our 2021 survey, with data from 25,000 incumbents at 184 companies, highlights just how quickly compensation is moving in the sector. Year over year, common incumbents (employees in the same jobs at the same companies) saw a median salary increase of 5.4%. The information and communication technology (ICT) subsector saw the highest increase, with a change in median base salary of 6.4%, followed by the clean tech subsector, with an increase of 4.6%.
With the COVID-19 pandemic having paved the way for a seismic shift to remote work, companies have been implementing new compensation policies pertaining to this. Of the 184 tech companies that participated in our survey, 53% are now covering home or remote office costs for items such as equipment, supplies, furniture and internet. We expect to see the prevalence of this increase next year, as an additional 15% of companies are considering adding this benefit.
This normalization of remote work propelled by the pandemic has increased international competition for local talent, putting further pressure on tech sector salaries in this province. Examples of U.S. companies hiring B.C. residents to work remotely are becoming more common.
Higher overall compensation
Pay for some jobs is particularly hot right now. Key technical positions in our survey saw average base salary increases of between 6% and 12%. Skills such as software development and IT operations, full stack software development, and data science were identified as some of the most difficult-to-recruit skills, and showed up on the list of jobs with the fastest moving pay.
With demand much higher than supply for many tech roles, companies are under substantial pressure to pay higher salaries to obtain the talent they need. The 2021 data shows many instances where new hires are being paid more than incumbents, driving up the market pay rates for these jobs. Many of our member companies are adjusting salaries twice this year in order to keep pace with the market.
B.C.’s tech sector proved incredibly resilient to the economic downturn in 2020, as reflected in bonus payments handed out to employees. Average 2021 bonus payouts, which are based on 2020 results, were 13.5% of payroll. This is a significant increase over the past four years, where bonus payouts have averaged 8.7%.
A booming tech sector
Recruitment pressure is at an all-time high, with responding companies reporting an average planned headcount growth of 37% for 2021. This represents substantial hiring across the sector. Those same companies are planning a further average headcount growth of 27% in 2022. With the continued influx of international companies building development offices and studios in B.C. (Amazon, Mastercard, Fujitsu, Salesforce, Disney, Apple and Microsoft among them) and the increased number of U.S. companies hiring B.C. residents into remote positions, this upward pressure on salaries is expected to continue.
B.C.’s tech sector has a critical shortage of talent and an abundance of high paying jobs. As a result, the average salary of an entry-level software developer in B.C. is now $89,300, up from $84,400 in 2020.
The bottom line? Our sector is booming and providing incredible career opportunities across all functions. Let’s get all hands on deck, encouraging and enabling people throughout the province to shift into careers in tech.
For more details and specific salary figures, HR Tech Group’s Tech Salary Survey is available for purchase online at hrtechgroup.com.
Stephanie Hollingshead is CEO of HR Tech Group, an association for human resources, people and culture professionals in Canada’s tech sector.
This article was originally published in BIV Magazine's BC Tech issue under the headline 'Compensation pressure cooker'. The full digital edition of the magazine is available here.