Executive salaries are stagnating as Australian companies focus on hiring specialists in areas such as user interface (UX) design, data and analytics, and solutions engineering, with a new also finding a “significant” rise in wellbeing programs amidst persisting gender salary gaps.
The salaries offered to software engineering practitioners grew by a median of 18.5 per cent between last year and this year while team leaders’ salaries grew by just 1.4 percent, the 2023/2024 Australian Tech Salary Guide – produced by Think & Grow and Compete from an analysis of real-world 7,000 salary data points – found.
Top-paying software and engineering roles included Senior Engineering Manager (median salary $225,000), Software Architect ($209,100), Solutions Architect ($195,000), Senior DevOps Engineer ($190,000), Engineering Manager ($180,000), Senior Fullstack Developer ($180,000), Senior Backend Developer ($177,500), and Senior Frontend Developer ($171,500).
Victorian firms pay more than NSW and Queensland counterparts for software, systems operations, and hardware roles but NSW businesses pay more for business strategists, designers, finance and project management.
“Engineering practitioners are killing it,” Think & Grow partner Kate Harris-Slade said, adding that “Australia’s growing number of flourishing software companies have nurtured a new generation of talented software engineers.”
With startups increasingly tackling business problems using blends of software, hardware, electrical, chemical, AI, and aeronautical engineering, she said, “Australia is experiencing a rise in engineering-centric sectors beyond software.”
“The complex nature of the problems these businesses are solving require a blend of engineering disciplines [and] Australia is delving into new territories that demand fresh talent from overseas, or training from other skill areas.”
The fact that salaries remain consistently high – and are continuing to grow from year to year despite current economic uncertainty overall – contradicts perceptions that the economic downturn has made it easier to hire software engineers.
“This is not necessarily true,” noted Sydney-based Kevin McHugh, vice president of engineering with web3 gaming scaleup Immutable.
“In many cases, the opposite has happened: key team members, or those with niche skills, have actually become harder to access, with individuals hunkering down out of fear and businesses willing to move mountains to retain their key people… In this environment, it’s necessary to ruthlessly prioritise, ensuring we’re focusing only on those initiatives that will move the needle.”
Wellbeing boosts as gender gaps persist
Among the most significant changes in employment strategies over the past year were the normalisation of work from home (WFH) arrangements and a dramatic surge in employee well-being initiatives.
Most WFH arrangements were 2 days per week (seen at 31 per cent of organisations) and 3 days (27 per cent), but 24 per cent of respondents were offering employees unlimited WFH days – with 48.6 per cent offering some fully remote jobs with no expectation that employees come into the office.
Yet with many employers pushing their workers to do just that, companies face a challenging balance, noted Think & Grow partner Vinisha Rathod, who warned that “the impacts of the lack of non-digital connectivity are still here.”
“We’re hearing of leaders grappling with this dilemma: digital connection can’t always replace in-person connection and simply sharing an office doesn’t necessarily mean instant engagement or collaboration.”
Increasing support for WFH arrangements, and growing pressure on many employees to return to the office, had fuelled a significant increase in investment in employee wellness programs over the past year – with 76.2 per cent of employers offering wellness programs this year compared with just 30 per cent last year.
Mental health services have also become far more common, offered by 60 per cent of employers this year compared with 46 per cent last year.
The findings corroborate Reward Gateway’s recent Australian Talent & Engagement Report, which found employees overwhelmingly value intangibles more than salary increases alone.
Pay rises were deemed less important than factors such as having a manager who cares about their wellbeing (named by 62 per cent of respondents), flexibility in work location (59 per cent), and the ability to control their schedule (58 per cent).
Fully 61 per cent of respondents to that survey said they would leave their current employer due to poor pay, 51 per cent because they are being overworked, and 48 per cent because of poor company culture – highlighting the risks for employers that fail to strike the right balance between pay and environment.
Also confounding the situation is the persistent gender gap in technical roles such as product design – where, the Think & Grow survey found, women make up 34 per cent of employees – and cyber security (26 per cent), data (24 per cent), and software engineering (19 per cent).
Women account for three-quarters of roles in corporate functions but just 22.6 per cent of executive leadership roles, although those women who are in executive roles are being paid better – with the wage gap for women in executive leadership closing to 7.2 per cent.
Addressing this gap while persevering in a tough labour market won’t be easy – but it could be the difference between scale-up success and failure, with Think & Grow founder Anthony Sochan noting that “with unemployment low, many functional areas are in short supply.”
“Whilst Australia remains an attractive place to live and work, beginning a business and enabling it to truly scale remains a more than challenging situation,” he said.
“As we shift towards a new global outlook, it remains to be seen how Australian company leaders will get the support, right access and talent to scale.”