Remote Working and Developer Pay
Written by Sue Gee   
Wednesday, 22 April 2020

The claim that remote software developers earn 22% more than developers who (almost) never work remotely has recently raised some eyebrows and some questions. Yes, the headline was designed to attract attention, but there is truth behind it. 

The post from Nnamdi Iregbulem is based on an analysis of the data collected in the 2019 Stack Overflow Developer Survey and he has done a lot more than simply reporting some of its key findings, which we did in The When and How Of Learning To Code. Instead he dug into the raw data focusing on the 10,355 US-based individuals employed as software engineers on either a part-time, full-time, or independent basis. He is reporting his analysis in four parts in The Highest-Paid Software Engineers: 2020 Edition. So far only Part 1 covering ethnicity, age and gender is available, but as a topical extra Iregbulem looked at the effect of remote working on developer pay.

Yes this is yet another Covid-19 related news item. All over the United States workers are being urged to stay home and wherever possible to work from their homes. For software developers remote working is relatively easy to do, and with the provision of free collaboration and video conferencing tools to help with the pandemic crisis probably easier than ever. It is also something that is generally regarded as a perk rather than a hardship and the idea that it might confer a financial advantage is just icing on the cake.

Here is the chart  provided as evidence for the claim made in the post Remote Software Developers Earn 22% More Than Non-Remote Developers

remotec

It uses as the baseline the income of the group who work remotely never or less than once per month with those who work remotely with increasing frequency going right to left.The scale on the y-axis goes 0.0% to 25% and the x-axis categories from left to right are:

  • All/Almost all of the time 
  • More than half of the time 
  • About half of the time 
  • Less than half of the time
  • A few days each month.

The final category has the label "It's complicated" which goes some way to explaining why the the error bars are very wide but as Iregbulem ignores this group in his write up there's nothing I can comment on.

The headline refers to the blue bar at far left of the chart, reported as:

Fully-remote software developers earn 21.9% more than developers who never or rarely work remote.

But what I find more interesting is the slope of the red bars which suggests that there is a trend of the more you work remotely the more your pay advantage.

There's a clear difference between the blue and the red bars and this is where Iregbulem has gone the extra mile in analyzing the data. It would be entirely disingenuous not to take into account other factors that influence pay - such as age and experience. And this is what Iregbulem does to achieve the Adjusted bars shown in red in the chart above.

This is his explanation of the methodology: 

Two possible statements comparing the pay of different groups of software developers:

    1. Developers of type A make X% more than developers of type B, on average
    2. Developers of type A make Y% more than developers of type B, all else equal

X and Y are rarely the same number. X compares the average earnings of the group A and B. Y compares hypothetical As and Bs who are similar in all dimensions except one, allowing us to attribute the difference to that single trait.

The factors that are taken in account to make "all else equal" in this analysis include years of professional coding experience, age and and a variable that proxies for the influence a developer has within their organization - their decision making power over new technology purchases. You can see the contribution each of these factors make in adjusting the pay premium of fully remote developers vis-a-vis non-remote developers in this chart:

remotefactors

The effects of these adjustments are to remove 12.5% of the 21.9% pay advantage of fully remote workers, reducing it to 9.4%, which is still the largest of the pay premiums over those who never work remotely.

Commenting on the adjustment, Iregbulem states:

Much of the apparent premium earned by remote developers is in fact driven by seniority and tenure. These are older, more experienced developers who either prefer to work remote or whose organizations grant them that privilege.

Once contributory factors have been removed, there is still a large effect of almost 10% of fully remote working on pay. This, together with the clear upward trend in the earlier chart as remote work increases, does provide confidence that, as the author puts it:

"there is something real here".

As mentioned earlier, for many software developers working remotely, at least part of the time, is something they aspire to. Many of those who previously were not offered this perk will be hoping that, if they can prove their ability to handle working from home in this period when they have to do it, they will be allowed to enjoy this freedom in the future.

And maybe the companies who have not previously countenanced large-scale remote working will be persuaded of its benefits, which from the employer's standpoint include not having rent as much office space. Remote working may become the new norm without any ill effects on productivity, agility or code quality and lead to increased remuneration for those who undertake it.

remotesq

 

More Information

Remote Software Developers Earn 22% More Than Non-Remote Developers

The Highest-Paid Software Engineers: 2020 Edition

 

Related Articles

The When and How Of Learning To Code 

Know Your Worth - Insights Into Developer Pay

Upwork Discloses Freelance Pay Rates

Developer Work and Pay

Developer Pay Satisfaction According To Stack Overflow

Are Developers Old At 40? Surely Not 

Is Programming Skill Related To Age?

Older programmers ARE better!

 

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Last Updated ( Wednesday, 22 April 2020 )