Salary Inflation in San Francisco
Written by Andrew Slepitza, Division Manager in Jobspring San Francisco
With the first quarter of 2015 already behind us a couple things are certain about the San Francisco tech industry; there are a lot of new companies, it’s hard to find candidates, and salaries are increasing. It’s been a well-known fact for a while now that San Francisco is a candidate’s market with new companies popping up everywhere. However, the trend of salary increases is relatively new and is adding fuel to the fire during hiring processes. Just in the past 12 months alone San Francisco wages have gone up almost 5%. This is the highest in the nation just ahead of Dallas, TX.
Why is this the case?
It’s hard to find talent. It’s no secret that this is the most competitive hiring market that San Francisco has seen in years. There are a lot of companies hiring, but not enough candidates for the positions. Most of the high caliber candidates that Jobspring works with have anywhere between 3-5 offers that they are choosing between. It’s causing companies to get into bidding wars and go above their budgets for positions.
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On the flip side, candidates know that it is a good market and they are taking advantage of the situation. This is causing an increase in job changes and even some candidates going onto the market simply because they can. These candidates are looking at salary increase as their top priority.
So, what can companies do? The bottom line is to be patient. Don’t be afraid of missing out on the candidate that it will take an arm and a leg to get on board and definitely don’t be afraid to walk away. That candidate is going to be hard to keep happy and may not invest his time fully to his commitment in the company. It is important to remember to look for quality candidates that want the position for the right reasons. Also, live by “A duck is a duck.” If it looks like a duck and walks like one it is one. I see a lot of companies over looking senior level candidates that have short job history. They are overlooking it because of hard it is to find talent and because they do have a really good skill set. They think that their position and their culture will be the position they stay at. If the long term fit is what you are looking for then you’ll only be disappointed when this person leaves a year later after the project you hired them to do is finished.
Additionally, they can take a chance on mid level candidates. Looking to mid-level candidates will allow companies to spend less time in the hiring process and instead using that time to focus on training a candidate with slightly less experience. Instead of spending valuable time in a bidding war for a candidate that may not take the job in the end, look for candidates who may not have as many offers and shape them into the employee you need for the role.
Lastly, remember that culture is key. Look for candidates that are interested in your company for the role and the culture. Conduct interviews that will get candidates excited to work for you and look for the ones that will make a good fit long term. If a candidate feels your office is the perfect fit for them, they are more likely to take an offer at a lower salary than your competitors and will likely stay longer.
With a strong increase in salaries the tech industry continues to boom. Candidates are experiencing a hiring process unlike any they’ve seen in the past. With this shift companies are being forced to change their hiring strategies to get the talent they need. However, with creative thinking and focus on the end goal, companies can acquire the top talent they want.