Business Tips

How can developers improve their paycheck.

As a software developer, what is the most lucrative opportunity you could be working on? This is a very relevant question to ask. Software skills are generally scarce and good developers are highly coveted. Furthermore, developers are mobile, in the sense that the nature of their trade allows them to work from remote locations quite easily and marketplaces for their services are well established. So which project should you pick to improve your paycheck?

developer salary

There are many reasons why someone might prefer one job over another, but let’s be honest: developers deserve to get paid well, given their important position in the global value chain. For the first time in 12 editions, we asked developers in our survey how much they earn in salaries or contractor fees. The results are in and from the data we learn several insights that can help developers improve their paycheck, and conversely, provide opportunities for organisations to find talent.

First, there are enormous differences in how much developers in each region and software sector earn. The best earning developers in our survey – those in the top ten percent – often earn tens and sometimes hundreds of times as much as the least well-off, i.e. the bottom decile. Part of this gap is location-driven. We’ll come back to that shortly. This said, we can only conclude that a developer’s skill, knowledge, and reputation do matter. Investing in them will pay off.

Developers working in areas with a higher technical complexity generally earn more.

Talking of skills, developers who work in areas with a higher technical complexity – and therefore higher barriers to entry and ultimately fewer developers doing it – generally earn more. Developers that work on cloud computing and other backend services report higher salaries than those working on front-end web apps. Machine learning specialists make even more than the backend folks. In Western Europe, for example, the median web developer has a yearly gross salary of $35,400 USD, the median backend developer earns $39,500 and a machine learning developer makes $45,200. This relationship is seen across regions and also at higher wage levels. Web and mobile development are the most commoditised; there is a fairly low barrier to start making simple apps or websites, and these tasks are relatively easily outsourced to other regions.

Scarcity of skills drives up paycheck amounts for developer services.

Scarcity of skills drives up the price for developer services. This is also true for new, emerging areas of development, like Augmented and Virtual Reality, or the Internet of Things, but only at the top end of the scale.The best developers in emerging areas earn top dollar, while the bottom half of the developer population makes less than their counterparts in more established sectors. Let’s compare Augmented Reality (AR) with backend developers in North America as an example. The median wage for an AR developer in that region is $71,000 USD, a good bit less than the $79,200 that the median backend developer makes. At the top end, however, AR development is more lucrative. At the 75th percentile, the AR developer is paid $132,300 and the backend developer $122,800. At the very top (90th percentile), the difference is even more pronounced: $219,000 for AR, $169,000 for backend. The reason for this wide range of salaries is that markets like AR/VR or IoT are still commercially underdeveloped. Companies that are early adopters pay large sums for skilled developers, who are scarce. At the same time, less experienced developers are attracted by the hype. Their compensation suffers both from a lack of relevant skill and from a lack of companies that are hiring in the early market.

Again this pattern repeats across regions. The exception is South Asia. The outsourcing model that drives software development in that region seems to be built on maintaining legacy code and developers there are less involved in emerging innovations (a conclusion that’s also supported by our developer population sizing research).


We’re still a long way off a global market for developers!

We started this chapter by saying that developers can market their services location-independently if they choose to. However, it’s clear from the data that we’re still a long way off a global market for developers! The median web developer in North America for instance earns $73,600 USD per year. A Western European web developer earns half of that – $35,400 USD – although recent exchange rate shenanigans due to Brexit and the Euro-crisis will have affected that comparison. Web developers in other regions earn again half of that: between $11,700 in South Asia and $20,800 in Eastern Europe. Not just the region of the world you live in matters, but also the country and even the city you call home.

This opens up opportunities for organisations who will accept remote workers. You can hire a top 10% Eastern European backend developer for less money than the median North American wage in that sector. For developers, it means that brushing up your English skills and looking for opportunities beyond your backyard can be very interesting indeed. Developers who take that leap and seek opportunities that pay to international standards are in the minority. This explains why top wages in emerging regions (Asia, the Middle East, Africa) are so exuberantly high compared to local standards. A Western developer in the top decile earns about three times as much as the median wage in his sector and region. In the emerging world, top wages are seven to ten times the median. The best developers in those regions work for multinationals or sell their services on international marketplaces, while most stay employed locally, at much lower remuneration levels.

So what’s a developer to do if you want to move up in the world, financially? Invest in your skills. Do difficult work. Improve your English. Look for opportunities internationally. Go for it. You deserve it!

Take our Developer Economics Survey and speak out about other challenges you face!


Developers: builders or explorers?

What do you think about when you hear the word “software developer”? Most people probably imagine a duffy engineer, turning his boss’s requirements into code. A software builder, so to speak. But developers are so much more. They’re often more like adventurers and explorers, boldly going where no programmer has gone before. This was never more true than at the eve of the Internet of Things. The most important role of Internet of Things developers is to explore new possibilities. The technology is widely available; in no small part because of open source software and hardware projects. Now we need to learn where we can take it. We can build it, but should we?

Why are Explorers so important?

Explorers are critical to any developer ecosystem, including in the Internet of Things. First, because that’s where all the truly new, out-of-the-box ideas come from. It’s hard to be super-innovative when you have a project to deliver to your boss or client. Only by exploring seemingly crazy ideas can the Internet of Things reach its full potential. The open source ecosystem is often the area where these ideas bloom.

Secondly, while exploring, Explorers gain a tremendous amount of experience. This will help them build their careers (as builders or otherwise). It also helps the companies that pay the bill. And it is needed. In Q4 2014, VisionMobile surveyed 4,000+ IoT developers. The lack of hardware development skills was the top challenge among IoT developers. 48% of IoT open source enthusiasts (those who find it important to use an open source platform) listed it as a challenge.

Learning and open source

VisionMobile’s data also shows that exploring, learning and open source technology go very well together. Among Explorers (developers that are primarily interested in gaining experience to seize on future opportunities), 20% value open source platforms and technology. That’s the highest level of any group. Conversely, Explorers are the biggest group among open source enthusiasts (32%).

Furthermore, open source is popular among developers that are new to IoT and new to software. A second group who value open source are seasoned software developers who bring open source business models to the Internet of Things. Traditional IoT developers with lots of experience underuse open source. In a way, these “experienced in software, new to IoT” developers provide another kind of ecosystem-level learning.

More data

Here are some more key insights about IoT explorers and open source enthusiasts that we summarized in an infographic, co-created with Arduino:

  • Open source is not just useful for building skills. It is also used by developers that want to increase efficiency (we call them Optimizers) and by developers that work on commission (Guns for Hire). This indicates that open source tools get the job done quickly, efficiently and inexpensively. On the other hand, developers are cautious about using open source technology in commercial products.
  • Open hardware in particular helps IoT developers to address their 3 main challenges: a lack of hardware skills, immature tools and high production costs. Arduino is clearly a leader in this space.
  • “Open” seems to be a professional philosophy that is applied on hardware, software and protocols alike. 60% of open source enthusiasts feel that open standards are missing from IoT, compared to 44% of other IoT developers.
  • All this doesn’t mean that open source has won everywhere. Some verticals, e.g. wearables, seem more difficult to address with open source technology and are therefore less popular among open source enthusiasts. Sometimes open source platforms struggle in the face of strong closed-source competitor. Smart Home platform OpenHab is a good example.

In conclusion, developer-explorers are critical to any developer ecosystem, and open source technology is an important tool to make that happen. I for one can’t wait to see what these modern-day Marco Polo’s and David Livingstone’s discover next!