What Do Companies Consider in Paying Web Developers?

Software engineering salaries often rank on top of wage lists (compared with thousands and thousands of jobs out there).

That said, there are two common reasons why companies don’t pay as much as Facebook or Netflix for engineering (or web development) jobs:

  1. A salary cannot be higher than the predicted return on investment
  2. It doesn’t make sense to pay more than the market standards

Salary and ROI

Bear in mind that web developers are in demand, but expectations may vary wildly.

A 16-year-old hobbyist in PHP could build a simple 5-page business website for a local church. A veteran PHP developer may still fail an interview with Facebook.

The larger the business, the more complex the engineering problems and the more notable the accomplishments of senior contributors. An engineer could individually generate $2M – $10M to Facebook or Google or Oracle or Netflix annually, paying ~10% of that is still a steal.

Less skilled engineers won’t yield the same return on investment. But offering a top salary automatically generates a broad pool of applicants (and you get to be picky).

Market Averages

On the higher end, top companies can afford to pay $500K or even $1M for certain roles. This would not be ideal, though, if they could hire at significantly lower salaries. This is why the market dictates salary expectations.

If Apple decides to go berserk and publicly offers $750K wages for 1,000 engineers, most of the top companies would follow suit once money-driven people suddenly disappear.

As for small businesses…

If your ROI is negligible, there’s no need to overpay. It may be cheaper to get an intern on board or outsource offshore if you’re not in a hurry and small mistakes don’t make a difference.

I don’t blame solopreneurs and photographers launching businesses on Wix. I don’t LIKE it, but it’s not like they need to scale 200M in traffic, reroute through a complex EBS setup, handle data between a marketing automation suite and an ERP, offer courses across different languages and continents via a dozen currencies, and a multitude of payment gateways… You get the drill.

If you want to stay competitive, skill up, build a portfolio, target the higher tier. Otherwise, you’ll compete for mom and pop shops that consider high school students or hiring virtual assistants setting up hosted WordPress sites.