How Much IT Professionals Earn in Germany - Overview of Salary & Compensation Studies

The presentation outlines relevant compensation studies for the German market. It highlights 6 factors which have an impact on your salary if you work in Germany, then it goes through the main findings of two independent studies. On top: a few extra slides on salary increase and best employers in Germany (2019)

Transcript

1. HOW MUCH IT PROFESSIONALS 
 EARN IN GERMANY Overview of Salary & Compensation Studies 1. EX-YU IT EXPERTS IN GERMANY MEETUP // JUNE 13TH, 2019 @SAPBERLIN Filip S. Perišić
2. OUTLINE 0 1 2 3 4 5 6 7 8 9 Short intro about myself and Nemački kutak Compensation studies in Germany 6 factors which influence your salary in Germany Overview of StepStone Study Overview Compensation Partner Study Salary increase Is salary the most important factor? 10 best employers in Germany Summary
3. FSP in 30 seconds 0 1 2 3 4 5 6 7 8 9 In Germany since September 2009 - Moved here with a dream to play volleyball - Pivoted to learning German and studying - B.Sc. & M.Sc. in Business Informatics mostly in Germany - Currently works as Java Developer That’s me! 6 years and 14 kg ago… Previously worked as: - SAP Finance Consultant
 - Applied Research in Machine Learning (NLP)
 - Frontend developer
 -.NET developer and team lead - Various tutoring jobs at university Hobbies: - Nemački kutak & other projects
4. Nemački kutak 0 1 2 3 4 5 6 7 8 9 Nemački kutak is about helping people to find their way to & in Germany About life, work and 
 studies in Germany Emerging subgroups - Ex-yu students in Germany - Ex-yu doctors and dentists in Germany - Ex-yu IT experts in Germany - Ex-yu Au Pairs in Germany
 Guides on how to
 - obtain German visa, residence and work permits - deal with German bureaucracy - understand German business culture - enroll in German universities Experiences from - diverse German universities - expats with various backgrounds NK Communities - Connecting ex-yu people with an academic background in Germany
5. Nemački kutak 0 1 2 3 4 5 6 7 8 9 This is Nikola, the backbone of NK Two persons behind NK: Nikola Smiljanić & Filip S. Perišić
 
 About life, work and 
 studies in Germany Gathering of ex-yu students in Berlin, October 2018 Landed in a few newspapers, magazines and tabloids in all countries of the former Yugoslavia
 
 More than 30 guest authors with diverse academic and cultural backgrounds such as Social Sciences, Photography, Business, Physics, Medicine, Psychology, Biology, Computer Sciences, Ecology, etc. More than 30,000 unique readers with more than 45,000 views/month
6. 0 1 2 3 4 5 6 7 8 9 Compensation studies in Germany
7. 0 1 2 3 4 5 6 7 8 9 Relevant studies on compensation Different studies exist which focus on pay & compensation of knowledge workers in Germany Publicly available - Gehaltsreport by StepStone (Covers knowledge work) - Gehaltsstudie by Xing (Covers knowledge work) - Gehaltsübersicht by Robert Half (Covers knowledge work) Non-public studies - Vergütungsstudien by Compensation Partner (Focus on IT and Real estate, 
 In-depth studies)
 - Studies by Kienbaum (In-depth studies on management salaries)
 - Vergütungsstudie by Frankfurt University & PwC (Focus on compensation of 
 managing & supervisory board members)

8. 0 1 2 3 4 5 6 7 8 9 6 factors which influence 
 your salary in Germany
9. 0 1 2 3 4 5 6 7 8 9 6 factors influencing your salary Source: https://de.statista.com/infografik/10763/jeder-fuenfte-verhandelt-nie-ueber-das-gehalt/ Different studies identify unambiguously five factors which influence compensation in Germany: - Geographical location
 - Company size
 - Industry
 - Work experience
 - Level of education + One important factor are negotiation skills - Both before and after signing the contract
 - 18-25% never negotiate!*
10. 0 1 2 3 4 5 6 7 8 9 Take the average salary 
 with caution
11. 0 1 2 3 4 5 6 7 8 9 Is the average salary mean? Source: https://de.statista.com/infografik/10763/jeder-fuenfte-verhandelt-nie-ueber-das-gehalt/ Recall the difference between the median and average - Cobol developer at a bank/insurance earns ca. 110k€ gross annually - Junior react.js developer at a startup earns ca. 40k€ gross annually - Average developer salary: 75,000€ gross annually How does an “average developer” profile in Germany looks like? - Speaks German and English - Degree from a German university - More than 5 years of work experience in Germany - Employed, i.e. not a freelance - Probably works in SMEs (Mittelstand)
12. 0 1 2 3 4 5 6 7 8 9 StepStone Gehaltsreport 
 2019
13. 0 1 2 3 4 5 6 7 8 9 Average compensation in Germany Source: StepStone Gehaltsreport 2019 Take numbers with caution because:
 - They are average, Gross compensation, Base pay + variable pay
14. 0 1 2 3 4 5 6 7 8 9 Compensation of IT experts 
 in Germany 
 StepStone Gehaltsreport 2019
15. 0 1 2 3 4 5 6 7 8 9 IT compensation in Germany Source: StepStone Gehaltsreport 2019 Take numbers with caution because:
 - They are average, 
 Gross compensation,
 Base pay + variable pay
16. 0 1 2 3 4 5 6 7 8 9 Higher compensation in the West Source: StepStone Gehaltsreport 2019 Salary in Hesse is more than 60% higher than in Saxony-Anhalt Top 3 states by salary
 - Hesse
 - Bavaria
 - Baden-Wuerttemberg Berlin is the 2nd best in East Germany
 - Highest compensation 
 growth in Germany 
 - Growth more than 20%
17. 0 1 2 3 4 5 6 7 8 9 Big companies pay more Source: StepStone Gehaltsreport 2019 Independent from work area, big companies pay more Small companies pay 10% less than the average compensation Companies with more than 1,000 employees pay more than 15% compared to the average compensation
18. 0 1 2 3 4 5 6 7 8 9 Top 10 industries for IT Source: StepStone Gehaltsreport 2019 Banking industry pays ~ 75,000€ on average Moving from medical IT to banking means could mean 10,000€ increase in salary Note that very large enterprises exist in every mentioned industry (majority in the West) 

19. 0 1 2 3 4 5 6 7 8 9 Experience & education pay off Source: StepStone Gehaltsreport 2019 Regardless of work area
 - University degree means higher salary
 - Salary depends on experience
 
 

20. 0 1 2 3 4 5 6 7 8 9 IT market appreciates experience Source: StepStone Gehaltsreport 2019
21. 0 1 2 3 4 5 6 7 8 9 Senior developer is best payed role Source: StepStone Gehaltsreport 2019
22. 0 1 2 3 4 5 6 7 8 9 Compensation Partner 
 IT-Study 2019
23. 0 1 2 3 4 5 6 7 8 9 University & PhD make the difference Source: https://www.compensation-partner.de/de/news-und-presse/it-vergutungsstudie-2019-unternehmen-ringen-um-fach-und-fuhrungskrafte Top paying people with apprenticeship earn less than average master degree employee
 Note that this are not entry-level salaries, but the compensations earned on average with the given level of education
24. 0 1 2 3 4 5 6 7 8 9 Big companies pay more Source: https://www.compensation-partner.de/de/news-und-presse/it-vergutungsstudie-2019-unternehmen-ringen-um-fach-und-fuhrungskrafte By moving from small company to a large corporation, the average salary increases by 15,000€ Least paid employees in large corporate earn similarly to top paid employees in small enterprises
25. 0 1 2 3 4 5 6 7 8 9 Entry-level salary is ca. 44,600€ Source: https://www.compensation-partner.de/de/news-und-presse/it-vergutungsstudie-2019-unternehmen-ringen-um-fach-und-fuhrungskrafte After 3-6 years the average salary increases by 6,000€ Top paying colleagues get after 7 years of work experience an increase of more than 20.000 € compared to the entry-level
26. 0 1 2 3 4 5 6 7 8 9 IT security earns the most on average Source: https://www.compensation-partner.de/de/news-und-presse/it-vergutungsstudie-2019-unternehmen-ringen-um-fach-und-fuhrungskrafte Backend developer earns on average more than a full-stack developer Admins and technical- support are the least paid IT jobs Consultants earn almost the same as IT-project managers
27. 0 1 2 3 4 5 6 7 8 9 Salary increase
28. 0 1 2 3 4 5 6 7 8 9 Main factors for salary increase Source: StepStone Gehaltsverhandlung in Deutschland (2019)*, Gehaltsübersicht (2018) by Robert Half** Top 3 reasons for salary increase:
 - I have proactively asked for it
 - Standard Pay Increase
 - Perfomance-based The most common reasons for a salary increase:
 - Change of employer
 - Standard Pay Increase
 - Promotion or internal job change
29. 0 1 2 3 4 5 6 7 8 9 "Money and salary is not a particularly good motivator in the long term."
 - Matt Mullenweg
30. 0 1 2 3 4 5 6 7 8 9 Salary or other reasons? Pay and compensation is just one of the important aspects Priorities change as we go through different life stages Examples of other job aspects - Work itself
 - Working hours - Flextime
 - Overtime pay - Home office - Vacation days - Office location - Professional growth opportunities - Flat or hierarchical/organizational structure - Work culture - Expected travel - Impact - Autonomy - Benefits such as take-home vehicle - etc.
31. 0 1 2 3 4 5 6 7 8 9 10 best employers 
 in Germany
32. 0 1 2 3 4 5 6 7 8 9 The best by Glassdoor & Kununu American and Austrian/German employer rating portals recognize SAP as the best employer in Germany Glassdoor identifies an organization from a public sector as one of the top 10 employers
 - Fraunhofer Kununu identifies 3 american companies - Google - PayPal - Cisco Source: https://www.glassdoor.de/Award/Beste-Arbeitgeber-Deutschland-LST_KQ0,29.htm // https://news.kununu.com/focus-award-deutschlands-beste-arbeitgeber-2019/
33. 0 1 2 3 4 5 6 7 8 9 Summary
34. 0 1 2 3 4 5 6 7 8 9 Three take-away messages Location, employer’s size and industry have big impact on salary in Germany
 - Salary is higher in West Germany
 - Large companies pay higher salaries
 - German market recognizes university degrees and work experience StepStone study on salaries finds 62,279€ gross as the average IT salary incl. variable pay - Keep in mind what “average” means in Germany Two main reasons for salary increase - Asking for it (though only 4/10 people ask for it)
 - Changing the employer

35. 0 1 2 3 4 5 6 7 8 9 Thank you for your attention! Filip S. Perišić
 Founder, Editor filip.s.perisic@nemackikutak.com Nemackikutak.com
 Facebook.com/NemackiKutak 
 Twitter.com/NemackiKutak Nikola Smiljanić
 Graphics, Editor nikola.smiljanic@nemackikutak.com Subscribe to ex-yu IT in Germany newsletter Let us stay in touch!