Tech Leveling & Compensation Structures

Welcome to this edition of our newsletter, where we demystify tech leveling and compensation structures, a breakdown especially for data scientists.

In our recent webinar 'Tech Leveling & Compensation', hosted by Manisha Arora , Data Science Lead at Google, and Manny de Souza , Engineering Manager at Netflix, we explored the ins and outs of leveling, from understanding structures like L3-L7 to positioning yourself for the right level. We also discussed the distinctions between Individual Contributor and Manager paths, how companies assess the right level for candidates, and the impact of leveling on compensation across organizations.

With insights from these industry experts, this edition equips you with the knowledge to make informed decisions about career progression and confidently approach your next role. Let’s dive into the strategies to level up in your tech career!

About the Speakers:

• Manisha Arora : Manisha is a Data Science Lead at Google Ads, where she leads the Measurement & Incrementality vertical across Search, YouTube, and Shopping. She has 11+ years experience in enabling data-driven decision making for product growth.
• Manny de Souza : With over two decades of experience forming, leading, and coaching engineering teams, Manny has hired talent globally to build products used by hundreds of millions of people. He currently leads a central squad of engineers and tech leaders that enables Netflix Studios to order, fulfill, package, promote, and distribute content at global scale.

Overview:

Understanding levels in tech is more than just a label; it’s a framework that defines the skills, responsibilities, and experience required at each stage of a tech career. Coupled with compensation strategies, tech leveling helps ensure equitable pay and clear growth paths. Understanding these concepts is vital for anyone looking to navigate their career trajectory with purpose and insight. In this webinar, we unpack how tech leveling works across companies, the metrics that influence compensation, and practical ways to use this knowledge to accelerate your growth.

Part 1: Leveling

1.1) Understanding Levels in Tech (L3 - L7)

Leveling structures help define clear expectations at each career stage, from junior roles to senior leadership. Levels provide a roadmap for growth, outlining the skills, responsibilities, and impact required to progress. In this chapter, we’ll explore the responsibilities typically associated with each level, from L3 (Junior) through L7+ (Sr Staff/Head), to give you a clear understanding of what it takes to advance.

L3 - L4 (Junior - Mid): At these levels, individuals focus on executing well-defined tasks and projects, taking ownership of their work, and building technical expertise. The focus is on developing foundational skills, learning on the job, and contributing effectively within a team. This stage is about gaining confidence and establishing a strong work ethic.

L5 - L6 (Senior - Lead): Progressing to senior levels means handling projects with significant scope, tackling ambiguity, and solving complex problems. L5 and L6 professionals lead by example, driving cross-functional collaboration and ensuring technical excellence within their teams. At this level, the focus shifts from solely executing tasks to leading projects and mentoring others.

L7+ (Sr Staff / Head): At L7 and beyond, individuals take on high-level strategic responsibilities. They shape the direction for key products or initiatives, lead large teams or cross-functional projects, and contribute to the organization’s broader vision. This level often involves redefining or pushing the boundaries of the domain, requiring a balance of strategic insight and leadership skills.

This leveling framework not only offers a clear path for career growth but also highlights the evolving responsibilities and expectations as you move up. Understanding these structures can help you set realistic goals and prepare for the skills needed at each stage.

1.2) IC vs. Manager Path

Choosing between the IC and Manager paths depends on your career goals, whether you prefer deep technical involvement or aspire to lead and develop teams. Each path offers rewarding opportunities for growth and impact within an organization. For many professionals, the choice between technical excellence and people management is a defining moment in their career.

Let me say this very clearly - One path isn't better than the other. Choose the one that works best for you.

1.3) How to Position Yourself at the Right Level

Now let's discuss strategies for positioning yourself at the right level in your career, whether you're aiming for an IC or managerial role, or simply looking to advance. These steps are designed to help you assess your strengths and align them with the company's needs and expectations.

1. Assess Your Skills and Experience: Take an honest look at your current skill set, past projects, and achievements. Identify where you excel—whether it’s technical depth, problem-solving, or leadership capabilities. This self-assessment will help you understand where you add the most value and which roles best align with your strengths.
2. Research the Company: Different companies have unique expectations and role structures. Research the specific company you’re interested in, paying close attention to how they define and support various roles. Understand the expectations for each level and align your positioning with the company's culture and structure.

1.4) How Companies Evaluate Level for any Candidate

Understanding how companies determine the appropriate level for a new hire can give you an edge in positioning yourself during the hiring process. This chapter outlines the typical steps that companies take to evaluate candidates and make role and compensation decisions.

1. Role Approval: Before any hiring process begins, the company identifies the specific role it needs to fill. This decision is based on factors such as business needs, team growth projections, budget constraints, and strategic objectives. Approval is often required from multiple stakeholders, including leadership and legal teams, to ensure that the role aligns with the company's growth goals and complies with legal and budgetary constraints.
2. Candidate Interview: Candidates are sourced through various channels like referrals, online job applications, and recruiting agencies. During the interview process, candidates are evaluated on skills, experience, and potential fit within the team. This step involves multiple rounds of assessments, such as technical evaluations, cultural fit interviews, and behavioral assessments, to gauge whether the candidate aligns with the role's requirements and the company's values.
3. Hiring Committee / Manager Decision: After the interviews, the hiring manager or a hiring committee reviews feedback from all interviewers and makes a decision. In some companies, the compensation committee may also weigh in, especially for senior roles, to determine the offer based on market trends, the candidate's experience, and internal equity. This final step is crucial in ensuring that the offer aligns with both the company’s pay structure and the candidate's level of experience and potential impact.

Part II : Compensation

2.1) Components of Compensation

Let's understand the major components of a tech compensation package:

Base Salary: This is the fixed amount paid to employees for performing their job duties. It’s typically reviewed annually and can vary by industry, experience, and location.

Equity: Equity compensation offers employees ownership in the company, often through stock options or restricted stock units (RSUs). This aligns employees with the company’s long-term success, as the value of their equity grows with the company.

Performance Bonus: Bonuses are variable payments awarded based on individual, team, or company performance. They can be annual, quarterly, or tied to specific achievements, motivating employees to contribute to company goals.

Benefits: Benefits include health insurance, retirement plans, paid time off, and wellness perks. They enhance overall compensation and contribute to employees' well-being and job satisfaction.

2.2) Compensation Approaches Across Companies

Different companies structure compensation packages uniquely, often prioritizing certain elements over others. Some place greater emphasis on base salary, while others prioritize equity, offering significant stock options to align employees with long-term company success. Certain companies focus on providing higher cash compensation, whereas others offer comprehensive, world-class benefits to attract and retain talent.

It’s important to note that these insights are based on my understanding and experiences in the industry, so they may vary by company and role. Use this information as a guideline, but always verify specifics with company sources or recruiters when exploring new opportunities.

2.3) How Leveling Affects Compensation

To give you a clearer picture of total compensation in today’s tech landscape, I’ve compiled examples of typical salary ranges across major tech companies and levels. These figures offer a glimpse into how compensation can vary significantly by company and role, from base salary to equity and bonus structures.

Keep in mind that these numbers are intended as a general guide based on industry observations, not an absolute source of truth. Compensation can vary widely, so always verify with up-to-date information from recruiters or reliable sources when exploring specific opportunities.

Ready to Advance your Career in Data Science?

If you’re looking to deepen your skills and advance your career, we offer two immersive courses designed to help you succeed in today’s tech landscape:

• Product Data Science Course: Covering essential topics like A/B testing, product sense, applied ML case studies, and statistics & probability, this course prepares you to tackle real-world challenges in product data science. With thorough industry research and guidance on compensation negotiation, plus holistic career coaching, this course provides you with the tools and support to level up effectively.

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Thank you to our speaker Manny de Souza for sharing such valuable insights and experiences in the webinar. Your expertise provided a deeper understanding of tech leveling and compensation, offering attendees practical strategies and knowledge to navigate their own career paths. We truly appreciate your time, thoughtful advice, and the clarity you brought to these critical topics. Looking forward to more insightful sessions ahead!

Check out our previous newsletters:

1. LLMs for Search
2. Causal Inference Fundamentals
3. Trends and Career Paths in Data Science
4. Search Rankings and Recommendations
5. Skills and Growth as a Product Data Scientist

Kudos to @Sujithra Gunasekar for helping draft this article. ?? Subscribe to this newsletter to stay tuned about more such events!