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How I determine my value as an IT professional

Some idle thinking on salary and the related topics.

I have been a software developer for approximately 5–6 years now, working almost exclusively in the e-commerce vertical and mostly for consulting companies. During that time, I have moved from three different companies, each of which have left their own largely positive impression. IT is an interesting industry; it’s incredibly fluid, world-wide in scope and seems to regularly reassess its own fundamental assumptions. It stands to reason then that our careers are similarly chaotic, shifting between one opportunity to another as we see the shifting rhythms of the industry to best capitalise on our skillset.

One of the more interesting parts about negotiating our career paths is determining how much we should be compensated for our relative skillset.

https://what-if.xkcd.com/111/

The importance of money

It’s perhaps worth first considering the nature of the thing that we’re given for (usually) our time. From Wikipedia, the definition of money is:

… any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context.

This definition is useful in an abstract sense but I think it’s worth digging a little deeper at what money “buys” us.

Power

Broadly, money (especially salary) is a mechanism to express the value of a person. Having money buys access to a socioeconomic class of others who have similar amounts of money, each of whom wield their own pools of influence. The greater the level of money, the greater the access to these high power individuals.

Knowing and being part of these communities has implications on business opportunities, pools of knowledge, finding new partners to work with and a progressively better (materialistic) quality of life.

As an aside, I am personally of the opinion that the accrual of this power is both something to be exceedingly wary of and something that can positively benefit our relative societies. While the accurel of this social power is useful, we must ensure we are grounded in the needs of those who have less power than ourselves, and continually seek to ensure this social power is spread with the intend to reduce general harm.

Choice

As mentioned and by way of an increase of social power, wealth buys us choice. Perhaps this best understood by examining the inverse; the scenario in which some of us are restrained to positions of little choice, and are thus unable to increase their relative wealth — the “poverty trap”. Broadly, there is a segment of our society who are unable to make the sort of investments that lead them to contribute more value to society at large — education, transport or even food and safety.

Our salaries dictate our choices. Lower salaries confine us to the positions that we’re in, whereas higher salaries allow us to be deliberate about where we are, with whom we are and the direction in which we want to go. This allows us in turn to increase our value to society, and our own wealth.

Direction

The nature of our economic complexity is such that we are often unable to see the yield of our work directly. At the time of writing, I see that these posts have been read by around ~900 people in the last 30 days. But I have no notion as to whether they’ve helped improve lives or yielded any societal value.

Money is a mechanism that gives us a direction to improve our skills. Indeed, theses posts are monetarily motivated — they’re both about increasing my value to you, as the reader community, and to demonstrate that value to stakeholders to determine my salary.

Our salaries are a mechanisms to express how our value to the business has changed over time. In many cases we study an extremely large amount which, we guess, positively impacts the business. But absent salary changes there is no way to reflect this understanding.

Determining our value to a business

Unfortunately, not all businesses are equal, neither are our development contributions to them. Even if we work for ourselves, our value lies in the value that we’re able to provide to others rather than the technical excellence of our solutions, our ability to understand the clients requirements or whether we’re nice people. It gets a little messier when discussing concrete value versus perceived value, but that’s a topic for another day.

Measuring it

If you’re lucky enough to be a part of a company that makes its financials transparent, then it’s a fairly straight forward journey between determining our contributions to the business as compared to our salaries. In my case, my salary is derived from the aggregate of our consulting services, in turn billed by units of time. I try to maximise my value by first ensuring that our project partners and project team is happy. It then folds out into ensuring that the project teams more generally are happy, and then to the business proper.

I know the approximate financials of my project, and I know where my project sits in comparison to other projects. I also have a reasonable idea of the outgoings, and our companies financial position. So, I’m able to draw a reasonable (though not 100% accurate) conclusion about our companies position, and my contribution to it.

Measuring proxy values

There are now an abundance of services that provide some comparative data across industry between companies. Such services generally ask several questions like:

  • How many years have you done ${X}
  • What are your qualifications with ${X}
  • How old are you
  • What industry are you in
  • What type of organisation do you work with

Before generating some sort of histogram indicating the range of salaries that one can reasonably expect for the position:

A generated report from Payscale.com for “software developers” in Frankfurt am Main

Some, such as PayScale, will also give additional data as to how different qualifications, time in the industry or other factors generally affect salaries as time goes on. As an interesting aside, for Magento development it seems to cap at around € 70k.

Services that I have used for this in the past include:

These tools can inform both what sort of salaries you can expect for the position, tools and experience that we’re in and over time, but also what you can expect shifting your job role to something a little different:

A generated report from Payscale.com for “Site Reliability Engineer (SRE)” in Frankfurt am Main

Asking

Ultimately, all calculations of salary are hypothetical unless they’re against the open market. While reading salary calculations and other related literature, it’s easy to see only the best of ourselves and determine that we’re being underpaid, and we’re rockstars in our respective fields.

However, in order to determine our practical wealth we need to communicate with many different individuals, teams and companies to determine where we can make the most value out of our skills. This invariably means applying for work.

This is an interesting duality. On the one hand, it can feel like a betrayal to our teams, to the organisation and to the executive team. However, on the other hand not doing so makes us vulnerable to being undervalued by our respective organisations, or developing an inflated sense of self worth. Regardless, I do not see applying for other positions while still happily in the current position a betrayal but rather a periodic exploration of industry values. This is useful to both the employee and the employer — provided it’s done in an open way and discussed freely.

At any rate both accepting and communicating the possibility of leaving an organisation has a number of useful benefits. Broadly, it:

  • Reduces the taboo around salary discussions. Salary is a fundamental driver to our motivation and willingness to complete tasks on behalf of our corporate partners. Not discussing it does harm all around.
  • Requires us to prepare a portfolio of our knowledge suitable for others consumption. This helps our own orgs as well in their learning.
  • Forces us to prepare systems such that they do not depend on us, and deliberately spread knowledge and skills around.
  • Requires us to to investigate the skills required by other companies, especially those who pay larger salaries. In many cases those skills are extremely useful regardless of the efficacy of the application.

Even given those benefits, I find the act of applying for work an inherently stressful proposition. So, I only do it once a year. I communicate this with everyone that I think should know and prepare for it, and it’s been useful to moderate salary conversations with a view to reduce the incentives to look super hard at other alternatives.

Putting a price on a ourselves

As far as I know, there is a limited objective set of prices to evaluate a given person's value; it’s an inherently tricky task. However, the above guides and things should provide some clarity as to the expected salary return.

It gets even tricker when contemplating “at what price” you would consider leaving a company, though. The price I have for leaving is about 133% of the price I would like to have staying — Sitewards is a pretty awesome place to work. There are several factors that play into this decision beyond simply salary recompense:

The team

Broadly, the team of people I work with are among the best engineers I have ever worked with. They’re smart, talented, empathetic and driven to improve the quality of the project and increase our customers return on their investment in us.

It’s hard to overstate something more valuable than a team that you can understand and trust. However, unfortunate practical aspect of salary negotiations is that part of that negotiation may mean moving teams or even workplaces, and that you may longer work with that team.

This risk needs to be offset in salary negotiations.

Business benefits

In our cae, Sitewards is fairly generous with business benefits, and definitely has a super relaxed culture. Sitewards pays for things like:

  • Conferences
  • Qualifications
  • Courses in German
  • Office space and other utilities to make our work places better

These things are deliberately budgeted, carefully thought out and applied as they’ll bring about the best possible results.

The value of this is also significant, and needs to be offset in salary negotiations either by a direct comparison of benefits or by an increased salary figure, such that those benefits can be self-determined.

Negotiating position

Perhaps the most frustrating part about salary negotiation is that it systematically rewards those who are able to risk more in opening these discussions, requesting higher salaries or even moving companies and locations with a view to increase their personal worth.

For those who have obligations to family, friends, community groups or other requirements that grounds them in their locale there needs to be some mechanism to give them negotiating power, or to remove the negotiation entirely from the salary (that is, draw up a salary structure and refuse to budge on it).

In my case, I systematically reduce risk — I save money, and I’m already in a country that is not the one of my birth, and learning the language and customs here. But this is not a universality, and employers need to approach those who are in a less risk-friendly position and still partake in these salary conversations.

In Conclusion

Determining our value as IT professionals is a difficult topic. It is perhaps not natural as humans to attempt to express ourselves in terms of a numeric salary digit. In the culture in which I was raised we are deliberately effacive, eschewing self importance for the improvement of family, friends and community.

However, such valuations are an inevitable part of our lives, and being prepared for them will serve us well as our industries grow and the opportunities change over time. Spending time thinking and preparing for this topic is time well spent indeed.

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See https://www.andrewhowden.com/

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