PayScale Releases IT Startup Salary Hotspots Report
San Francisco, Austin and Seattle Top List
Seattle - January 27, 2011 - PayScale, Inc., the world's largest real-time salary data provider, today announced its' IT Startup Salary Hotspots Report.
San Francisco tops the list of IT Startup Salary Hotspots because it employs more than double the national average of IT startup workers and it offers pay over a third higher than the national average. Another large city that has the same potent combination of high IT startup employment and high median pay is Seattle, #3 on the Hotspot List.
Some highlights from the study include:
Some cities experience higher than average employment ratios, but lower than average median pay ratios and vice versa:
For example, Austin is the #2 IT Startup Hotspot due to its large employment ratio, but for pay it only ranks in the middle (7 out of 12).
The same is true for Salt Lake City, except its pay is near the bottom (11 out of 12).
In contrast are Boston and Washington, DC which have mediocre employment ratios, but pay relatively well (3 out of 12 and 2 out of 12 respectively).
The national average pay cut for working at an IT startup rather than a large IT corporation is 18 percent; the range is 22 percent (Seattle) to 8 percent (Salt Lake City). Of course, typical IT startup employees are also granted stock options that might one day provide a very big payout.
"It is not folklore that the San Francisco Bay Area, Austin and Seattle are top places for tech startup jobs; the PayScale data shows these cities top the list of hot IT startup locations," said Dr. Al Lee, Director of Quantitative Analysis at PayScale. "These three cities continue to be prime places with over twice the percentage of startup jobs and the best opportunity to land a job with the next Google or Amazon."
IT Startup Hotspots
Below is a table ranking the metros according to their IT Hotspot score.
IT Startups Hot Spot Rank
IT Startup Jobs Ratio
IT Startup Jobs Median Pay
IT Startups Hot SpotScore
Salt Lake City
New York City
IT Startup Median Pay vs. Large IT Median Pay
This table compares the median pay for IT workers at IT startups and the median pay for IT workers at larger IT corporations.
- Median Pay
Large IT Jobs
- Median Pay
Typical Pay Cut for IT Startup Workers
New York City
Salt Lake City
IT Startup Hotspots Methodology
PayScale reports median pay for workers who have between zero and 10 years of experience, with a typical experience level of five years.
We define IT startup companies as IT companies with less than 75 employees.
The metropolitan areas are based on the Combined Statistical Areas (CSA), which are defined by the US Office of Management and Budget (December, 2003 definition).
To avoid population bias, for each metro PayScale finds the ratio of IT workers at a startup IT firm to all workers and standardizes the ratio by the national proportion of IT workers at startup IT firms. A ratio greater than one implies the metro has more startup IT positions available than average, while a ratio less than one implies the metro has less startup IT positions available than average. For this study, Median Pay Ratio means the ratio of the median pay for IT workers at startup firms by metro to the national median pay for IT workers at startup firms ($64,300). The higher the ratio for a metro, the higher its median IT startup pay, relative to the national median.
Cost of living is not factored into the results of this study because of its many variables. For example, there are different tax structures from state to state and personal choice is a significant factor. For example: A person can live in Newark or Elizabeth, New Jersey and commute to Manhattan, or can choose to live in an expensive neighborhood in Austin, Texas.
The IT Hotspot Score is the product of the IT Startup Employment Ratio and the Median Pay Ratio.
PayScale.com (www.payscale.com) is the leading online provider of employee compensation data. With the world's largest database of individual compensation profiles, PayScale provides an immediate and precise snapshot of current market salaries to employees and employers. PayScale's patent-pending, real-time profiling technology collects and indexes employee pay attributes worldwide and makes this compensation data available through its online salary tools and salary benchmarking reports. PayScale was founded in 2002 and is headquartered in Seattle. For more information, visit: www.payscale.com/about.asp