When I graduated with a Computer Science degree in 1997, most of my classmates from UC Berkeley took software engineering jobs in the Silicon Valley. Over the past 20 years, about 25% of my classmates had shifted their career to product management. Some of them got MBA degrees along the way to make the transition from technical positions to product management. Are they better off?
This is an important career decision that many early-to-mid career tech professionals experience. Based on my own career progression and career coaching experience, I’d like to answer this questions in term of financial reward, upward career mobility, job security, and career satisfaction.
Many of my college friends are working in engineering roles at Google, Facebook, Apple, LinkedIn, and other top technology firms. Several of my MBA classmates are working at Google, Facebook, Microsoft in product management roles. Who is making more money? Using salary data from Paysa.com, I’ve compared software engineering and product management.
A few notes about the data below:
- I collected pay information for “software engineer” and “product manager” positions at Google, Facebook, Amazon, Microsoft, LinkedIn, and Salesforce.com. These are average salary estimates. The numbers might be different from actual salaries you have heard from family and friends.
- I compared the pay between Product Manager and Software Engineer across different companies to analyze the spread.
- Paysa.com provides Low, Average, and High pay data for each position.
|Software Engineer Low||153k||162k||107k||113k||153k||104k|
|Software Engineer Average||203k||224k||135k||144k||200k||152k|
|Software Engineer High||257k||291k||164k||177k||249k||203k|
|Product Manager Low||149k||150k||110k||160k||149k||107k|
|Product Manager Average||218k||233k||175k||219k||216k||176k|
|Product Manager High||294k||325k||247k||283k||288k||251k|
|PM Low vs SE Low||-2.61%||-7.41%||2.8%||41.59%||-2.61%||2.88%|
|PM Average vs SE Average||7.39%||4.02%||29.63%||52.08%||8.00%||15.79%|
|PM High vs SE High||14.40%||11.68%||50.61%||59.89%||15.66%||23.65%|
Software Engineer – Low vs. PM – Low: With the only exception of Microsoft, 5 out of the 6 companies, the delta is within 3%. Microsoft is an aggressive recruiter from MBA programs. It might be the reason that its low-end PM salary is higher than the other companies on the list. The key takeaway is that these two roles at this level are similar.
Software Engineer – Average vs. PM – Average: Across all 6 companies, the average PM pay is higher than the average software engineer pay. However, Google, Facebook and LinkedIn had delta of less than 10%. This is consistent with what I have heard from my friends who worked at these companies. If you’re a middle-level software engineer or product management at Google, Facebook or LinkIn, your compensation is comparable.
Software Engineer – High Vs. PM – High: This is when product managers start to have a clear winning edge. Product managers pay is consistently higher across all 6 companies.
Takeway: Software engineering pay is comparable to product managers pay at low-to-average levels. However, at senior levels, product managers get paid more than software engineers.
For most software engineers, there are two career tracks:
- Technical, individual contributor track: move up from junior software developer to senior developer to architect.
- Managerial track: move up from junior software developer to senior developer to manager to director to VP of engineering.
Generally, people who move up the managerial track tend to make more money. However, employers such as Google and Amazon have given highly technical individual contributors very lucrative packages. In some cases, they are comparable to what a VP of Engineering would make.
On the other hand, product manager have more flexibility in upward mobility. They can move up the product management ladder from product manager to senior product manager to group product manager to director to VP. Or, in some companies, they can become GM and assume profit/loss responsibilities and eventually take over as CEO. Because of the cross functional nature of product management, they have more career flexibility.
If you want to become a senior business operator then product management is likely the better path. If you love software engineering and coding, you can remain a strong individual contributor or senior team manager. It really depends on your passion and skill set.
Generally, software engineers have more job security than product managers. That’s because there is more demand and also more jobs available. Most startups grow with engineers first and then hire product manager later (because the founder tends to be the original product owner). In a typical technology company, there will be 1 product manager to many software engineers.
As a software engineer, you can focus on coding and get less involved with the corporate politics of projects ownership and direction. You’ll have more time to yourself and an outlet to be creative. However, I have coached many software engineers and I hear they can get bored easily or feel they’re not moving up the ladder quickly enough.
Product managers are in a position to be more customer facing (internally and externally). They are likely to be in a management role so there will be more social interaction and management stress. However, there is more runway to move up the ladder in a successful outcome.
Between the two occupations, at the low-to-middle level, the financial reward is similar for software engineers and product managers. And for the most part, their upward mobilities are the same. However, if you are the ambitious type who wants to become CEO one day, then product management is the better option. Software engineering generally has better job security and job satisfaction.
In the end, you need to know what you want and what makes you happy. These factors will help you make an informed decision if you should move from software engineer to product management.