IT Salary Trends 2025: A Data-Led Report for Recruitment Agencies and Business Owners

The IT industry has generally been paying better compared to other sectors. Data by the US Bureau of Labor Statistics (BLS) shows that the median annual IT salary was USD$105,990 in 2024, way more than the median annual wage for all occupations, which is USD$49,000. (1)

As a business owner or someone responsible for recruiting, knowing what fair pay looks like in 2025 can go a long way in not only properly compensating top talent but also staying competitive in the job market. Here are 2025 trends that should interest you.

Trends to Note

According to Motion Recruitment’s 2025 IT Salary Guide, the Year-over-Year (YoY) growth for IT and Tech Salaries in 2024 was 1.8%, which is slightly down from 2% in previous years. This is consistent with market sentiment, indicating that hiring managers are feeling budget pressure.

Big raises are becoming rare because companies need to manage their expenses carefully. Here’s where different IT specialties stand in terms of compensation in 2025:

AI & Data Skills Demand Premiums

AI/ML engineers, prompt engineering leads, and senior data engineers are walking away with six-figure salaries and then some. Companies are willing to pay aggressively for these talents because they’re driving innovation and growth.

Big tech companies like FAANG (Facebook, Amazon, Apple, Netflix, Google) often offer hefty compensation packages. In fact, recent data shows that Meta pays its software engineers up to USD$480,000 while machine learning roles command upwards of USD$440,000. Compare this to 2021, when the top 10% were making over USD$168,570 per year, and you’ll see the difference. (2)(3)

Senior data engineers also enjoy significant premiums. This is because they build data pipelines that fuel machine learning models and business intelligence tools. Without them, companies would struggle to make data-driven decisions. So, if you’re considering a career move, these fields could be worth exploring.

Remote vs. In-Office Pay Split

The remote work revolution has reshaped compensation forever. Some companies now offer more for on-site or frequent in-office work. On the flip side, many employees value remote work enough to accept lower pay. Research suggests that some would take a pay cut of around 20% to work remotely. (4)

Hiring managers are balancing two forces here: location premiums versus remote preferences. The best approach for your business is to clearly communicate your pay policies based on location and work arrangement.

Geo-Differentiation Keeps Growing

Location-based pay bands, or geo-adjusted salaries, are becoming increasingly common. Companies use these to manage costs while hiring a globally.

However, this approach can lead to pushback from remote employees if adjustments seem arbitrary. To avoid such conflicts, your company should have clear guidelines in place for geo-pay adjustments, guidelines that should be properly communicated.

What Can You Do as a Recruiter?

Recruiters play a critical role in attracting top talent. Here are some practical tips:

Sell Total Compensation

Don’t just focus on base salary. Highlight sign-on bonuses, equity, flexible work options, upskilling budgets, and career paths. These may be just enough to sway candidates, especially when base budgets are tight.

For example, instead of offering a USD$150k base salary, propose a USD$140k base with a USD$10k sign-on bonus, a USD$5k training stipend, and a clear path to promotion within 12 months.

Be Explicit About Location Policy

Publish geo bands and explain how you’ve arrived at them. Say a candidate moves from San Francisco to Denver for work purposes. When you clearly state the pay adjustment based on location, you set expectations upfront, which can help avoid negative surprises later.

Target Skills, Not Job Titles

Hire for specific skills rather than rigid job titles. This can help broaden your search and bring in more qualified candidates. For example, if you need someone skilled in “data platform + MLOps,” frame the job description around those skills instead of limiting it to “senior ML engineer.”

What Business Owners Should Do

You have a huge role to play in hiring and retention:

• Benchmark roles quarterly: Use multiple sources (salary guides, marketplace data) to update pay bands regularly. Markets move quickly, especially for hot skills.
• Use selective premiums: Pay top market rates for roles that drive product differentiation (like AI or platform development). For others, offer competitive but not market-top pay plus growth plans.
• Design hybrid incentives carefully: If you prefer office presence, offer a clear premium (e.g., 10–20% for 4–5 days/week) and explain why.

Getting this right can guarantee that you will hire the best people to help you achieve your business goals and remain competitive in the market.

Takeaway

IT salaries seem to be stable but polarized. Top skills (AI, security, cloud) command strong premiums. Recruiters will likely win in 2025 by selling the full package, while employers may stand out by being targeted, transparent, and metric-driven.

So, whether you’re a recruiter, business owner, or candidate, knowing these trends in and out will help you make sense of the changing market and stay ahead of the recruitment game.

References

1. “Computer and Information Technology Occupations”, Source: https://www.bls.gov/ooh/computer-and-information-technology/
2. “Meta salaries: See how much AI engineers, researchers, and more at the tech giant get paid”, Source: https://africa.businessinsider.com/news/meta-salaries-see-how-much-ai-engineers-researchers-and-more-at-the-tech-giant-get/dbz8gy4
3. “Occupational Employment and Wages, May 2021”, Source: https://www.bls.gov/oes/2021/may/oes151252.htm
4. “Many workers would take a pay cut to work from home — some would forgo at least 20% of their salary”, Source: https://www.cnbc.com/2025/02/07/many-workers-would-take-a-pay-cut-to-work-from-home.html

David Lim