Chapter 3

Costs

Global Tech Talent Guidebook 2024

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For most companies, labor is their largest expense, followed distantly by real estate. Highly skilled and educated tech talent workers often command much higher salaries than the average non-tech office worker. Average software engineer salaries were used to determine the cost of tech talent globally.

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Global software engineer salaries have two components: base or take-home pay and additional benefits, which are mandated by law. U.S.-dollar base salaries for software engineers are highest in the San Francisco Bay Area and London at $175,213 and $158,659, respectively. Amsterdam’s high additional benefits, equivalent to 31% of base salary, makes it the most highly compensated market for software engineers overall.

Figure 13: Average Software Engineer Compensation by Market in US$ (2023)

*Additional benefits vary by market and may include mandatory employer costs like disability insurance, social security and health care.
Source: CBRE Labor & Location Analytics, local government agencies, October 2023.

Singapore had the highest rent, with an annual average gross direct asking rent of US$104 per sq. ft. Hybrid work policies continue to impact office markets globally, with office vacancy rates not yet stabilized in many markets. The established markets of Delhi-Gurugram and Shenzhen had the highest office vacancy rates at more than 25%, while the San Francisco Bay Area and Beijing had the highest vacancy rates among powerhouse markets at more than 22%.

Even as remote and hybrid work arrangements become more common, office rent is the second-highest cost for most companies.

Figure 14: Office Market Fundamentals (Q3 2023)

*Full service gross (FSG)
**Tel Aviv's office data represents the average of the market's five major office submarkets in H1 2023.
Note: Measurement standards vary globally impacting inventory and rent per square foot. Office inventory is not available for all markets and is as of Q4 2022 for Latin American markets.
Source: CBRE Research, Q3 2023.

For tech talent workers, affordability of an apartment relative to their salary is a key consideration. Comparing the annual average apartment rent with the annual average software engineer salary shows that tech talent salaries can cover the cost of living in most global markets, based on the affordability standard of 30% or less of income for housing.

Figure 15: Apartment Rent & Wage Ratio by Market (US$)

*Annualized Q4 2022 apartment rent compared to median software engineer compensation by market in 2023.
Note: Markets excluded above do not have apartment rents tracked by CBRE. Apartment data for European marketsis as of Q3 2023 and data for Toronto-Waterloo is represents a straight average.
Source: Economic Research Institute, CBRE Research, October 2023.

The relationship between software engineering wage and office space costs shows which markets are the most and least expensive to operate in. Budget-conscious companies that require tech talent may choose to locate in markets like Bogota and Delhi-Gurugram, while companies with more financial wherewithal may consider larger more expensive markets like the San Francisco Bay Area and London.

Figure 16: Average Office Asking Rent vs. Software Engineer Total Compensation by Market in US$

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Source: Economic Research Institute, CBRE Research, October 2023.

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Chapter 4 Emerging Markets
Chapter 2 Labor Supply