When you say consulting firms, does that include the likes of McKinseys, BCG, Deloitte, PwC? No way they tap out at $150K and they have a ton of H1bs
Cute_Obligation2944 on
I wonder how much seniority and staff pay account for the difference…
mosi_moose on
Interesting work. A few thoughts…
* IT services is about maximizing margin on labor in a relatively non-differentiated, cost-conscious market. The financial incentives are to hire lots of staff that provide the best spreads and get them on billable contracts.Â
* Product company engineering is about delivering features. The business model skews toward quality and speed over cost since the margins scale better for software and online services. In general product companies are looking for better, more productive staff and willing to pay for it.Â
* Given the economics of each industry the compensation differences aren’t surprising.Â
* As many know, the H1-B program was designed to provide US companies access to talent that’s not readily available. With all the layoffs in the tech sector it would be interesting to see whether companies shedding staff are keeping H1-Bs at a disproportionate rate.Â
* I would also be interested to understand hiring of H1-B with lower levels of experience as entry-level employment for new CS grads is apparently tough sledding.
![[OC] Analyzing 2.4M H-1B records: $305,700 wage gap between consultancies and product companies over 6 years](https://www.byteseu.com/wp-content/uploads/2026/01/yx7djyu1hxbg1-1536x1062.png "[OC] Analyzing 2.4M H-1B records: $305,700 wage gap between consultancies and product companies over 6 years")
4 Comments
Only for computer related applications
When you say consulting firms, does that include the likes of McKinseys, BCG, Deloitte, PwC? No way they tap out at $150K and they have a ton of H1bs
I wonder how much seniority and staff pay account for the difference…
Interesting work. A few thoughts…
* IT services is about maximizing margin on labor in a relatively non-differentiated, cost-conscious market. The financial incentives are to hire lots of staff that provide the best spreads and get them on billable contracts.Â
* Product company engineering is about delivering features. The business model skews toward quality and speed over cost since the margins scale better for software and online services. In general product companies are looking for better, more productive staff and willing to pay for it.Â
* Given the economics of each industry the compensation differences aren’t surprising.Â
* As many know, the H1-B program was designed to provide US companies access to talent that’s not readily available. With all the layoffs in the tech sector it would be interesting to see whether companies shedding staff are keeping H1-Bs at a disproportionate rate.Â
* I would also be interested to understand hiring of H1-B with lower levels of experience as entry-level employment for new CS grads is apparently tough sledding.