In this study, Paysa conducted analyses of its vast data banks of tech sector employment, including job titles, salaries, titles, location and more, to reveal who is underpaid where and by how much.
It is ironic that in today’s connected world with information on nearly everything instantly available, the vital issue of compensation too often remains shrouded in secrecy. Asking people what they make remains one of the last taboos in our culture. As a result, you may have no idea that you possibly are being paid less for the same work as the person in the cubicle next to you or as a college classmate doing the same job in another city.
With this report, Paysa, the only platform that uses artificial intelligence (AI) to deliver personalized career and hiring recommendations plus real-world salary insights, hopes to help you change that.
Why? The amount of money you are paid forms the foundation on which your entire life is built. Where you live, what kind of car you drive, the quality of education your children will receive, your access to healthcare, the level of travel experiences you can have and at what age you can afford to stop working – all this and more depend on what you earn.
Paysa is uniquely suited to provide you with the information in this report to give you the competitive salary facts you need to help determine whether you are getting paid what you are worth.
Paysa offers personalized career and hiring recommendations plus real-world salary insights for maximizing opportunity, earning potential and value at all stages of an individual’s career.
This study used AI algorithms sorting millions of data points to reveal the 10 stingiest cities and companies where tech and engineering employees are most likely to be underpaid (according to market value) by at least 10 percent or more. The results were combined with previous research highlighting that more than one-third of tech workers – nearly two million people – are underpaid by 10 percent or more averaging $11,200, per person, per year in lost wages. The study considered base salary and total pay packages which include equity and bonuses.
Seattle gets the dubious distinction of being the U.S. city where tech workers are the worst paid in both base salary and total pay packages with 60 percent likely underpaid for their total pay packages and a whopping 77 percent likely to receive a base salary below market averages.
It follows then that Microsoft, headquartered in the Seattle area, is the worst company in the U.S. for paying tech workers – 90 percent of their tech staff is underpaid by 10 percent or more.
The study also found that younger workers with fewer years of experience and women of all ages and levels of experience were paid significantly less than their peers for similar work.
Although this study did not look at ethnic background, Paysa analysts hypothesize that while disparities in pay for younger workers may be partly explained by a lack of experience in salary negotiations, for women and for tech workers from Asian countries, there may be ingrained cultural propensities for politeness and deferring to the boss that employers may be exploiting.
Paysa, based in Silicon Valley, constantly tracks, analyzes and updates information on salaries and how they rank for specific jobs, companies and cities as well as for experience levels, age, gender and ethnicity.
Using proprietary artificial intelligence technology and machine learning algorithms, Paysa analyzes millions of data points including jobs, resumes and compensation information, providing professionals with actionable tools, insights, and research. They can then see and understand their individual worth in the market today, and how to increase their value. Paysa also empowers enterprises with the knowledge they need to be competitive in today’s fierce tech hiring market.
Thus Paysa has built vast stores of data that in addition to providing individuals and companies with specific employment information can also be aggregated and analyzed to identify big picture trends.
For this particular study, Paysa sorted its most current data sets as follows:
Salary Calculation Methodology
Leveraging techniques in machine learning, multivariate statistics, natural language processing and information retrieval, Paysa extracted 10K+ signals from millions of job postings, and resumes collected across the US, and grouped similar ones together. Paysa technology sorted them for education, experience and expertise to identify groups with similar attributes. We were then able to accurately estimate salary by analyzing the latest job offers for users of our site, and calculating the distribution of market salary for similar profiles along with data using company, location and title.
Paysa data currently covers all tech/engineering job positions in the US: engineers, data scientists, designers, ux/ui, product managers, program managers, etc. Paysa data does not, yet, include non-tech positions such as admin, sales, and legal.
Data Sets and Sources
- Salaries: 35M+ salary data points
- People: tens of millions of resumes
- Companies: 100K+ companies
- Jobs: 500k+ job postings
Paysa also uses data from the U.S. Dept. of Labor Statistics. The data was controlled for H-1B visa workers who are paid at a lower rate by law.
Most Underpaid U.S. Cities For Tech Workers
It is interesting to note that the cities that ranked the worst for lowballing their tech employees are the cities considered to be the nation’s tech industry hubs. Seattle is the home of companies like Microsoft, and Amazon. And San Jose in the #3 spot for underpaid total compensation is the epicenter of Silicon Valley with San Francisco not far behind. Paysa analysis suggests that this may be due to a glut of tech workers flocking to these cities creating a “buyer’s market.” It is also surprising to see that the top five cities for low pay are ones with a relatively high cost of living showing an uncoupling of tying pay scale to geographic cost of living.
Another factor that emerged is that when the data sets for cities where tech staff are most likely to be underpaid were sorted by base salary and again for total compensation packages, the same ten cities emerged each time. Seattle topped both lists as the worst of the worst by a long shot with Boston coming in second on both. The deck was shuffled slightly for the other eight cities, with San Jose, Los Angeles, Pittsburgh, Washington D.C., New York, San Diego, Austin, and San Francisco, all exchanging places but remaining present on both lists.
The good news though is that San Francisco and San Jose, both key tech industry cities with high costs of living, improve somewhat in the list of ten worst cities for base salary compared to total compensation. San Jose, Silicon Valley’s major city, goes from third place for worst total compensation with 40.53 percent receiving below market value to eighth place with 24.15% of the tech workforce likely to be receiving a low base salary. For base salary, San Francisco places sixth on the list with 24.17% likelihood of being underpaid compared to the city by the bay’s fourth place position for total compensation with 36.72% rate of tech workers receiving less than market value.
New York City, a name that is almost synonymous with “unaffordable,” surprisingly ranked at the bottom of both lists of ten worst cities likely to underpay tech workers for base salary and total pay packages. New York City was in last place for underpaying base salaries with 20.56% underpaid and in ninth place for total pay with 30.31%.
The top 10 cities that are most likely to under pay their tech and engineering pros at market value base salary are:
- Seattle, WA at 77%
- Boston, MA at 39.22%
- Pittsburgh, PA at 31.82%
- Washington D.C. at 28.57%
- Austin, TX at 28.24%
- Los Angeles, CA at 26.92%
- San Francisco, CA at 24/17%
- San Jose, CA at 24.15%
- San Diego, CA at 21.82%
- New York City, NY at 20.56%
The top 10 cities that are most likely to under pay their tech and engineering pros for total compensation packages are:
- Seattle at 60%
- Boston at 44%
- San Jose at 40%
- San Francisco at 37%
- Los Angeles at 37%
- Austin, Texas at 37%
- Washington DC at 33%
- Pittsburgh, Penn. at 32%
- New York at 30%
- San Diego at 29%
Companies Most Likely to Underpay You
Here Paysa’s data uncovered an ironic fact. Glassdoor, a job search firm, is only behind Accenture as the company most likely to underpay its own employees for total compensation. Glassdoor is 83 percent likely to not pay its tech people what they are worth.
Another interesting point is that with the exception of Redmond, WA-based Microsoft, the other five companies leading the list of miserly employers for total compensation packages are all in the San Francisco Bay Area where rents and home prices are among the nation’s highest. Accenture, Pinterest, Dropbox, Airbnb and also ninth place Uber have their headquarters within San Francisco city limits. Glassdoor is located in the nearby Marin County town Mill Valley.
Also worth noting is that Pinterest which is in third spot and 80 percent likely to underpay its staff is one of the few tech companies with a large number of female employees. Unfortunately, according to our data (see below), the tendency for women in tech to be underpaid persists.
Although not among the ten top offenders, other companies 40 percent or more likely to underpay tech people well in total compensation include NVIDIA, Cisco, Intel, Google, Salesforce and Oracle.
The top 20 companies that are most likely to underpay their tech and engineering employees for total compensation:
- Accenture at 90%
- Glassdoor at 83%
- Pinterest at 80%
- Microsoft at 75%
- Dropbox at 65%
- Airbnb at 63%
- Lockheed Martin at 62%
- Facebook at 59%
- Uber at 56%
- IBM at 55%
- Nividia at 54.55%
- Cisco Systems at 52.50%
- Intel Corporation at 48.65%
- Sift Science at 47.62%
- SalesForce at 46.88%
- Google at 42.08%
- Adobe at 40.00%
- Oracle at 40.00%
- Workday at 30.50%
- Hewlett Packard at 36.36%
Companies Most Likely to Pay You What You’re Worth
Here’s another reason to like movies. If you work in tech at Netflix, based in the charming Silicon Valley area town of Los Gatos, you have a zero percent chance of being underpaid. Bloomberg LLP, at five percent likelihood of being underpaid, also rates as 5.56 percent likely to underpay staff. And those are pretty good odds compared to the worst offenders.
The top 10 companies that are the least likely to underpay their tech and engineering employees:
- Capital One
- Bloomberg LP
Gender Pay Gap
The Paysa study found that women in tech all across the U.S. are 45 percent likely to be undercompensated while their male counterparts are only 38 percent likely to have the same experience.
This disparity in pay may be a key factor in why women are more than twice as likely to quit the tech industry as men (41% vs 17%). A recent study of 4,000 women who had recently changed jobs found that the main reason women leave companies is because of “a concern for the lack of advancement opportunity.” And a survey of books, articles, and white papers on this topic concludes that women leave the tech industry because “they’re treated unfairly; underpaid, less likely to be fast-tracked than their male colleagues, and unable to advance,” according to the website Tech Diversity Files.
Age and Experience
Overall, the Paysa research shows that younger workers or those with only 0-2 years of experience are more likely to be underpaid indicating that the more junior an employee is in terms of experience, the greater the odds that they are being taken advantage by not getting compensated according to market value.
The chances of being underpaid are greater for total compensation packages than for base salaries. Those with 2-5 years of experience are 44 percent likely to be undercompensated for total compensation packages while employees with 20 years or more under their belts are 24 percent likely to be affected by a gap in pay.
As we mentioned earlier, younger less experienced workers may not have developed the skill set to negotiate fair market pay. It is worth noting that unlike many professions in which experience increases proficiency and worth, tech is different. The freshly acquired skills of a recent tech graduate such as knowing new programming languages may be of greater value to a company.
If you think you are being underpaid, you probably are. You may benefit from Paysa’s new Get A Raise Tool, which shows them how they are currently doing, in terms of getting paid according to market value and their skills, background and education. The tool also shows employees what they could be getting, available jobs that match their unique profile and offers resources for negotiating a raise with their current employer, if that is the path they want to pursue.
For more information, contact Paysa.com.