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Are You Offering Austin Software Engineers Enough?

pay software developer

Austin software engineers are some of the highest-paid professionals in the area. In fact, Austin is the best-paying city for software engineers in Texas, according to the professional social network Blind. As the cost of living continues to skyrocket and high-paying employers from California flood in, are your compensation packages keeping up?

According to Blind’s data, the current average salary for Austin software engineers is $128,524. But that’s not the entire picture. The average total compensation—including annual salary, stock-based compensation, and bonuses—is $171,981. That’s about $35,000 above the average total compensation for software engineers in Houston (named by Blind as the second best-paying Texas city).

We all know that money isn’t the only component of compensation. It helps, but what can you do when you can’t match the big tech companies dollar-for-dollar?

First, Let’s Talk Demand

Supply and demand is the primary issue when it comes to competing for top Austin software engineers. Software engineers fall into the U.S. Bureau of Labor Statistics’ software developer category, projected to grow 22% by 2030. That’s nearly three times faster than the average projected growth rate for all occupations combined. By 2026, the shortage of software engineers in the U.S. is expected to exceed 1.2 million.

“This increase in demand has a significant impact on recruiting strategies and business objectives. Tech recruiters need to improve their approach and employers must recalibrate their goals so hiring doesn’t become a serious obstacle to success,” BuiltIn’s Kate Heinz points out.

This growing demand can also lead to poor retention rates among the software engineers you already employ. How? Burnout.

“When vacancies remain unfilled, current employees must bear the extra workload. We know that 80% of software engineers suffered from burnout during the pandemic, mostly due to increased workloads. We’re hearing from Austin software engineers that this burnout is a major reason they left their most recent job,” says Paul McGaughan, Practice Director of The H.T. Group Technical Recruiting. “Organizations already in a bind are stretched even thinner by this ugly cycle.”

Austin-Specific Compensation

In an October 2021 study, Blind named the following Austin employers as having the best compensation packages for tech workers: Wayfair, Stripe, Google, Apple, PayPal, VMware, and Amazon. In the past month alone, Tesla has listed dozens of jobs for Austin software engineers, including senior software engineers and software engineers focused on vehicle media, vehicle test automation, tools and frameworks, user interface, and more. It seems nearly every major tech company (and major companies with a tech presence) employs software engineers in Austin these days. Many of these employers can offer Austin software engineers generous base salaries but also $60,000 or more in stock. 

If your organization isn’t a household name, how can you compete? First, you need to understand the value of your software engineers as giant tech firms do, especially if your organization operates outside the software industry. As Analytics Manager Daniel Chae writes in an essay for the Stack Overflow Blog, giant software companies like Facebook and Apple value software engineers as important assets who contribute to the bottom line. On the other hand, organizations outside the industry often treat software engineers as a liability or an expense that must prove itself repeatedly.

“Because of this, a company outside the software industry is likely to pay you less,” Chae says. “The company will want to pay the direct contributors first. This group may be project managers, auditors, or even account executives. But if your software isn’t a key driver for revenue, don’t expect to earn a hefty salary.”

As an employer, don’t fall into that trap.

“Whether you’re in the software industry or not, you’re competing for Austin software engineers who are also likely being wooed by the big guys. The first step in attracting and retaining great talent is to value that talent as much as your competition does,” McGaughan says. “Do a market analysis and find out what you’re competing against. If you’re a startup, equity will be a critical part of the compensation package.”

The Other Piece of the Puzzle

Money is meaningful, but, thankfully, it isn’t everything. While a good-faith effort to keep up with the salary trends for Austin software engineers is critical, so are other work culture factors. And on that note, big tech companies aren’t all roses and sunshine for every type of employee.

“Even at some of the so-called best places to work, software engineers have complained of hostile work environments, their work preferences being ignored, intense and rigid processes, burnout, ageism, and the frustration of not seeing their hard work pay off directly. For those software engineers, a smaller company or a startup could be a great fit,” McGaughan adds.

“I remember my time working at a construction company after I worked at Facebook,” Chae recalls. “There were far fewer developers at the construction company—I was one of five programmers in the entire office. In some ways, this scarcity was discouraging, but it offered a potential way to add massive value. By the time I left, I had overhauled and automated their financial estimates model. The model could predict the cost of a given project with 95% accuracy. One of the other, more senior, software engineers created an internal tool that could produce a 3D model of a building proposal based on a design mockup from project managers. The internal tool optimized client relationships for the company. Clients could come in and immediately know what the company could provide at scale.”  

Hired recently asked software engineers what drew them to their careers. About 72% said it was new challenges and continuous learning, 64% said it was building products/solutions and problem-solving, and in third place (at 62%) was earning potential. That’s more proof that, while important, money isn’t the biggest motivator.

When it comes down to it, the best way to attract Austin software engineers is to be a place they want to work. To do that, it’s critical to do your research and work with recruiters who are knowledgeable about what motivates software engineers right now. Let’s go back to burnout as an example.

“Nearly every software engineer will experience burnout, probably more than once,” writes Nemil Dalal, Head of Crypto at Coinbase, in his ongoing Notes to a Young Software Engineer series. “Certain parts of software—startup engineering, gaming, open source—are especially prone to burnout. Try to identify burnout early, as it becomes exponentially worse over time. Since each person is different, experiment with your own strategies to hold it at bay—or recover. And the ultimate goal isn’t always less work, but leaning into activities that unlock you.”

For Austin software engineers, try being the antidote to the stereotypical grind. It can feel like swimming against the tide if you’re a startup, but it’s a worthwhile effort. Be the place where software engineers can lean into projects that move the needle and where they can find respite from being overworked and undervalued. That, along with well-researched compensation, can do wonders (and talented tech recruiters can help).