Amid industry layoffs, tech startups and AI labs are fiercely competing for specialized engineering talent with massive bonuses and wage premiums.
Data from Payscale and Levels.fyi highlights how artificial intelligence skills are driving compensation trends and shifting market dynamics for developers.
Changing employers can increase earnings
Data from the Federal Reserve Bank of Atlanta shows that those who move on to new jobs get bigger pay raises than those who stay with the same company. The gap is also evident in the tech industry: an analysis by Levels.fyi, which compiles compensation data from large tech companies and startups, found that the median base salary for new hires is 4% higher than for entry-level employees. At the top, the gap is as high as 17%.
Valentino Stoll, an artificial intelligence software engineer in New Jersey, left a job in July that paid him about $260.000 a year for a smaller startup, where he earned a higher salary. Within months, he was promoted. His case is linked to the demand for people with hands-on experience in integrating artificial intelligence into products.
The demand is not limited to those developing advanced models. Software engineers with strong core skills and the ability to leverage AI tools can also command higher salaries.
According to Payscale, the technology sector had the largest median salary increase in the third quarter, at 6,4%. It was followed by public administration at 4,6%, architectural and engineering services at 4,3%, business services and consulting at 4,1%, and manufacturing at 4%.
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In some specialties, the increases were even greater: 16,5% for first-level DevOps engineers and 9,5% for second-level customer service managers. For information security architects, software developers and application engineers, they reached about 5%. At the same time, a Payscale survey found that 56% of workers believe they deserve higher pay for acquiring AI skills, but only 16% said they have received a related raise.
Bonus for filling positions
The Wall Street Journal cites the example of artificial intelligence startup Serval, which this fall found that advertising and reviewing thousands of resumes wasn’t enough to fill 100 engineering positions. The company offered a $30.000 hiring bonus, an additional $30.000 to employees who referred candidates who were eventually hired, and a $10.000 vacation.
Carlos Lezama, head of human resources at Serval, told the newspaper that the company needs software engineers and experts in the development and implementation of its products. He said that companies such as Anthropic and OpenAI are absorbing much of the available specialized staff.
More work for technical professions too
Investments in artificial intelligence are driving demand beyond programming. The construction of data centers and semiconductor manufacturing facilities is creating additional needs in construction, manufacturing, and technical occupations.
ADP data shows that job changers have a wage advantage of nearly 11% in construction and 5,5% in manufacturing. In Northern Virginia, home to many data centers, experienced electricians working on data centers make about $70 an hour, compared to a base union wage of $62. That can include benefits and overtime, and in some cases, additional work is paid at double time.
Businesses are looking for people who can immediately leverage new technologies, rather than waiting to train new workers. So, alongside cuts in parts of the tech industry, investments in artificial intelligence are boosting demand for specific skills and giving some workers a stronger position in wage negotiations.
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