[LRUG] [JOBS] Ruby market rates.

[Glenn Gillen]

Re the "if you look at SF" comment: health insurance is a non-trivial cost if you're based in the US. Plus as a contractor I needed a stupidly high level of indemnity insurance to meet the requirements for some contracts. Factoring in just those two items made perm employment the financially better option for me.

On Tue, Jun 24, 2014 at 8:41 PM, Louis Goff-Beardsley
<louis at infinitiumglobal.com> wrote:

> [I wrote this for a client, might be of relevance here.]
> Hi x,
> Hope this makes sense and doesn't come out as some stream of consciousness waffle.
> Basically what you'll find is that if you did a survey of all the Ruby teams in London which have perm Senior developers you'll find they will be on anywhere between £55 & £80k. The average will probably be £65k. So everyone then makes the assumption that they should be paying £65k for an onsite perm developer. The problem is that they don't come onto the market (and most of the time when they do it's to switch to going contracting) so if you have an open vacancy for a Senior Ruby developer @ £65k it will likely remain open for many months. What teams then do from there is:
> ·         Drop their expectations and hire a Mid-level developer into a senior position at senior money. The mid-level takes the role as its more than the £45-55k that they are getting offered from other companies.
> ·         Hire Mid-level developers @ Mid-level money. While it's still a tough market, mid-level perm isn't as tough as senior perm.
> ·         Hire onsite contractors @ £400-600 /day as a stop-gap until the perfect developer for them comes onto the market; will take a while.
> ·         Accept remote/semi remote developers as they are more plentiful, affordable and loyal (they don't move jobs anywhere near as often as onsite do as there aren't as many opportunities constantly being presented to them. Generally if a company offers them what they want to fit in with their life style of why they want remote in the first place they are content)
> ·         Offer above market rates: (i.e. £80k for a senior developer, somewhere towards what they could make as contractors.). Interestingly enough companies most of the time refuse to take this option as they don't want to feel like they are over paying, however they then go on to take onsite contractors and it ends up costing them even more.
> ·         Wait and let it impact development, stressing out the developers they have, in turn making them want to leave.
> My opinion of why the market is like this is: when development is business critical companies will pay whatever the market rate is for contract developers to do the work until the point where they physically can't afford it. Whereas there is a collective consensus on what Permanent salaries should be based on what they have been historically, what other technologies are at, what a lot of permanent developers who have not had a salary rise are at. The problem lies in the collective consensus of what a permanent salary should be is so out of whack with what the market rate for contract rates is (which is closer to developers true value) that it's got to the point where by being perm developers are essentially walking away from £20k (perhaps more if you consider that contractors can pay close to 20% tax).
> If you look at SF, you'll see that the contract rates and perm salaries are much closer and thus there isn't such a draw towards contract work.
> I personally think the new developers coming onto the market will cancel out the mass adoption of Ruby in start-ups and established companies, and that on the whole, permeant salaries will go up as the consensus of what permanent developers salaries should be becomes more in line with their what true value is. This will happen to the point where contract & permanent developers will separate into distinct groups based on individuals personalities better suiting contract or permanent work. Right now I think there are a lot of developers who would be happier in a permanent job more than in a contract role but economically it doesn't make sense for them to be perm.
> That being said, the above only takes into account the economics of salaries. Relationships, buzz/hype surrounding the company, other perks etc play some role in attracting developers to perm.
> Best, Louis.
> -
> Louis Goff-Beardsley
> Ultra-specialised Independent Ruby Recruìtment
> https://www.linkedin.com/in/louisbeardsley
> "I just can't stop thinking about Ruby on Rails"
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