It’s no secret that essential cloud talent is in short supply.
Skills gaps are a seemingly perennial problem in the enterprise, making cloud a candidate’s market. Where roles in technology such as sales are being slashed, just 4% of cloud workers responding to our 2022 Cloud Salary Survey reported that job security is an issue.
In response, some organisations are taking the road of increasing salaries to tempt talent to their doors. In such a competitive marketplace, you can expect high wages; our research, which sought to undercover salary and employment trends for cloud-focused workers, reported an average pay packet of $182,000. As we found, by staying with their current employer, employees may get an annual salary increase of 4%. However, from our conversations across the sector, we are learning of significantly higher offers becoming typical – 20% or more – plus a signing bonus.
There are signs that inflated salaries may start to tail off. Alongside some impressive wage hikes, the majority of respondents did not report substantial salary increases; those who changed jobs averaged a 6.8% salary increase, while those who remained averaged 4.3%. Not insignificant, but not earth-shattering.
This slowing of salary increases could indicate that the bubble will soon burst on the vastly inflated wages of the last few years. For example, alongside a demand for skills, we’ve also seen significant layoffs in some sectors – for example crypto, which is perhaps not surprising given its dubious model. Other big names are also sending out worrying signals. Netflix has now laid off over 450 employees in the last few months. We may see a shift over the next 6 months, which will perhaps result in employees becoming warier and more aware of the skills they need under their belts.
Here we explore the factors playing into these new dynamics, and how employers and employees may respond.
The Great Workplace Reshuffle
The pandemic has resulted in redesigning working models enabled by cloud technologies. So, it is not surprising that cloud workers are taking full advantage of the continued demand for their skills, alongside embracing the flexible models their skills enable.. In the last year, a fifth of cloud workers changed employers, with a quarter planning to find new employment with better compensation.
A great reshuffle is underway in cloud, rewriting the rules for employers. With the time and cost savings from eliminating lengthy commutes (for employees) and downsizing office spaces (for employers), remote and hybrid work trends are likely here to stay. In fact, remote and hybrid work arrangements are now widespread for cloud professionals; almost two-thirds (63%) work remotely full-time. 31% follow a hybrid schedule, reporting to the office one to four days a week.
What is particularly interesting, however, is that hybrid work is associated with higher overall salaries – the average reported salary for hybrid staff was $188k. At the same time, full-time remote workers made slightly less ($184k). Full-time in-office workers reported the lowest average salary at $131k.
We can only speculate on why in-office work pays less. Perhaps it reflects companies stuck in the past that don’t trust their staff to be productive at home. Do they pay correspondingly lower salaries? If so, this is risky; employees are embracing flexible models and will quickly find another employer to meet this need.
Investing in skills pays dividends
With cloud technologies constantly evolving, employees know that to maintain an edge they have to keep their skills sharp. Nearly half (48%) participated in technical training or certification programs in the last year, with the most common reasons being learning new technologies (42%) and improving existing skills (40%). Just 12% were required to take training.
This focus on workplace training pays; training hours are directly linked to increased compensation. The most significant salary increases went to those who spent 40 – 59 hours in training over the last year, followed by over 100 hours. Minor salary increases and the lowest salaries were reported by those who only spent 1-9 hours in training. It goes to show that those who skimp on training shortchange themselves.
So, what pays the biggest reward when choosing which skills to invest in?
Reflecting on our survey, it seems clear that the largest salaries and salary increases go to those certified for one of the big three platforms: Google Cloud, AWS, and Microsoft Azure. Employees who obtained AWS or Microsoft certifications also earn very high salaries, while those who earned the CompTIA Cloud+ certification receive the lowest wage ($132k). The highest salary increase went to those who obtained the Google Cloud Certified Professional Cloud DevOps Engineer certification (9.7%), with salaries in the middle of the range ($175k).
The largest salaries are associated with Google Cloud Certified Professional Cloud Architect ($231,000). People who earned this certification also received a substantial salary increase (7.1%). Given that Google Cloud is the least widely used of the major platforms and that the number of respondents for these certifications was relatively small, we suspect that talent proficient with Google’s tools and services is harder to find and drives the salaries up.
However, it is not just the ‘big three’ attracting training investment. Respondents also reported that qualifying as a CKA (Certified Kubernetes Administrator) is becoming increasingly popular. The rising adoption of container technology such as Kubernetes is becoming a go-to architecture for app development. Automation, security, and machine learning were also highly rated on the scale of skills development. Ultimately, the most popular certifications and the highest salary increases went to cloud certifications.
It’s vital to understand that online training programmes are a better fit for the increasing remote workforce. If organisations are taking advantage of the trend towards remote work and hiring new employees from all over the world, there can’t be people coming into the office solely for training. Organisations must remember this.
Considerations for employers
For employers, the key takeaways from this latest research are two-fold. Firstly, salaries continue to climb – albeit the pace of this growth does seem to be slowing. However, while cloud skills continue to be in demand this will inevitably impact competitor packages, a factor making a move potentially more attractive for the quarter of employees thinking about moving. Higher wages will always sweeten the deal.
What was clear is that the largest salaries and salary increases go to those certified for one of the big three platforms. Interestingly, however, increased compensation wasn’t the main driver for employees seeking new skills. Rather, it was intrinsic rewards such as increased knowledge and the opportunity to work on more engaging projects.
Concerningly, however, only under a quarter of cloud workers had participated in company-offered training. Employers would do well to ensure quality training is baked into employee experiences – with support for relevant, quality training matched by salaries commensurate with the heightened skills this brings. At the same time, don’t hold employees hostage to outdated working models. Supporting new ways of working also means access to online training programs, designed to support highly remote workforces.
Today’s cloud talent is looking for the whole package; reward, recognition, flexibility and real opportunities for skills development. It is likely that salary expectations will soon start to flatten but that doesn’t mean employers can rest on their laurels. Delivering a holistic employee experience that ensures talented people stick around means enabling learning environments which support, challenge, engage and pay intrinsic as well as extrinsic rewards.
The full O’Reilly 2022 Cloud Salary Survey results and analysis is available here.
About the Author
Mike Loukides is Vice President of Emerging Tech at O’Reilly. We share the knowledge and teach the skills people need to change their world. For more than 40 years, O’Reilly has imparted the world-shaping ideas of innovators through books, articles, conferences, and our online learning platform.
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