Companies' Strategy in Hiring Needs Revision in Light of Changing Tech Salary Landscape

Tech Salaries in 2025: A Shifting Landscape

The tech industry is experiencing a transformation in salary trends, driven by a competitive job market, the impact of remote work, and evolving compensation expectations. According to Hired's 2021 State of Tech Salaries report, these factors are shaping the industry's salary landscape in 2025.

Competitive Job Market

The tech industry is facing a talent shortage, particularly in leadership roles that combine technical and strategic skills. This scarcity is driving up salaries and giving candidates strong negotiation leverage. Executive roles like CTOs and CIOs can command base salaries ranging from $250,000 to $500,000, depending on company size.

Emerging fields such as AI, machine learning, cloud computing, and cybersecurity are experiencing rapid growth, leading to significant pay increases for specialists. For instance, AI specialists can expect salary growth of 15-20%.

Entry-level and specialized roles like software testers and programmers also see salary variation based on experience, skills, and geography, reflecting the competitive talent landscape.

Remote Work

The shift towards remote and hybrid work models is reshaping pay in the tech industry. Companies are adjusting compensation based on employee location, offering location-based pay adjustments, remote work stipends, and flexible work terms. This allows employers broader talent access and employees greater lifestyle flexibility, influencing salary expectations and structures.

Despite geographic adjustments, tech hubs like San Francisco and London continue to offer some of the highest wages due to local market competition.

Compensation Expectations

Beyond base salary, total compensation increasingly includes performance bonuses, stock options, equity grants, and comprehensive benefits such as health insurance, retirement plans, wellness programs, and continuous learning opportunities. Diversity and inclusion efforts are also prompting companies to develop more equitable pay structures across underrepresented groups.

Professionals are aligning compensation expectations with market demand for cutting-edge skills that drive innovation and digital transformation. The average tech sector salary reached around $112,500 in 2024, reflecting steady growth in compensation aligned with market competitiveness.

Implications for the Future

The convergence of strong demand, talent scarcity, evolving remote work policies, and expanded compensation packages are the main drivers behind current tech salary trends, pushing wages upward and creating nuanced pay frameworks across roles, experience levels, and locations.

Despite the downward pressure on salaries for junior employees, top tech talent salaries are still increasing. Companies are accelerating recruitment by hiring junior candidates with less experience and investing in their development, a strategy to stay on top of hiring needs.

The majority of employees (57%) want to be fairly compensated, regardless of the ability to relocate and work from places with lower living costs. Remote work opportunities have led to the most growth in tech salaries for candidates from smaller markets.

The tight job market is leading companies to speed up their recruitment process. The practice of hiring junior candidates with less experience and investing in their development is a common practice in the current job market, putting downward pressure on salaries for junior employees.

Companies are diversifying their candidate pools by offering flexible work arrangements, making it easier for a broader range of individuals to enter and thrive in the tech industry.

Companies' Strategy in Hiring Needs Revision in Light of Changing Tech Salary Landscape