Levels in Tech: how to make sense of them
Discussing the basics of how leveling systems work & how they align across companies
In my previous posts, I touched on how compensation in ‘big tech’ works and also how to choose between multiple offers.
Now, it’s time to discuss what in my opinion is one of the most confusing & misunderstood aspects of working in tech — namely, the concept of levels!
Some common misconceptions
Let me start by listing some of the many things about leveling in tech that I’ve heard over the years (spoiler alert: they are all wrong!):
Levels & titles are essentially the same thing
The way levels align across companies is straightforward to figure out
I don’t have to worry about levels when interviewing, since the company will just assign me the right level at the end
If I am a Director at a startup, I should probably aim for Director level positions in ‘big tech’, right?
Within a company, levels work the same way across all functions (e.g., PM vs. SDE vs. Finance vs. Marketing)
This list can be easily continued, but I think you got the gist by now. The simple truth is, people tend to make a lot of assumptions about the way leveling works, and most of those assumptions are going to be at best incorrect, and in some cases actively harmful for the person in question.
In this post, I will try to provide some clarity on the topic, with the hopes that it would help both those actively interviewing for tech jobs, and also people already working in tech & thinking about their next move.
With that said, let’s dive in!
The basics
First of all, we should start with the definition of what levels are:
Levels represent a way for a company to standardize their employees' experience & assumed ability. Companies then use levels to determine compensation bands, set expectations on the level of impact of one’s work, etc. Companies also often think about open positions in terms of target levels, which are used to indicate the level of seniority required, as well as the scope that each position entails.
Now, let’s take a look at a specific level ladder to illustrate this further — I’ll use Google Product Management ladder as an example, which looks roughly like this:
Note: you shouldn’t see the table above as the source of absolute truth; instead, it aims to help directionally illustrate what kind of experience / scope / compensation each level entails.
A few things worth noting here:
At Google, titles have roughly 1-to-1 mapping to levels — but this is very often not the case for other companies, where one title might be used for multiple levels (Facebook & Microsoft, I’m looking at you here!)
Each level has a range (often called a ‘band’) of target number of years of experience (YoE), total compensation (TC), etc.
The higher the level, the wider the range gets
There is also often an overlap of level bands for things like YoE or TC
For example, it’s very possible that an experienced external L6 hire will have both the higher number of YoE & TC than a newly promoted L7
At some levels, you can still be either an IC, or a Manager
On the Engineering side in particular, there are often a lot of levels like that (in effect, you can choose whether you want to stay on the IC track, or switch to management)
At most companies, you have a concept of a terminal level, which means the level that you can stay at forever, without feeling the push to advance further
Typically, the title that corresponds to this level would be ‘Senior’ — although that’s not always the case
On the Engineering side, this is typically L64 at Microsoft, L5 at Google/Facebook, etc.
There are certainly some additional nuances, but hopefully, this gives you an initial idea.
How do levels align across companies?
Now, let’s take a look at how levels work if we attempt to compare across companies.
Again, I believe it would be much easier to understand it if we look at a specific example:
The chart above is from http://levels.fyi.
I’ve already mentioned this resource in one of my earlier posts, and I’ll most likely keep referencing it over & over again. In short, Levels.fyi contains a trove of crowdsourced compensation data (which is generally quite accurate), as well as information about how leveling systems at various companies align, etc.
If you’ve never encountered it before, be sure to check it out!
Let’s take a closer look at what we see on this chart (btw, while I’m using Product Management levels here as a way of illustrating some of my points, all of it generally remains relevant for Software Engineering, Data Science & other fields).
Deciphering the chart above
What are some of the things that come to mind looking at this chart?
First of all, it’s very clear that every company uses different conventions both for the levels & for the titles:
For instance, looking at L6 at Facebook, you can see that it roughly aligns with L6 at Google, but the titles are different
In fact, Facebook uses the same title for L4 through L7, making it quite confusing
At Microsoft, Facebook’s L6 falls between L66 & L67 (Microsoft also uses different titles for both of these levels, compared to Facebook & Google)
At Amazon, the situation repeats itself — there is no way to clearly map Facebook’s L6 to Amazon levels, plus Amazon titles are also different
Next, while this chart can be quite helpful, those who are intimately familiar with PM leveling across companies might immediately complain that it’s not entirely accurate.
For instance, Microsoft & Amazon folks might point out that mapping Google’s & Facebook’s L6 to Microsoft’s L67 or Amazon’s L8 is ridiculous, since those levels at both Microsoft & Facebook clearly imply more seniority & higher scope.
Those people are not wrong — which brings us to the third & perhaps most important point here, which is this:
Levels are quite subjective, especially since they attempt to capture so many things all at once.
In order to unpack this statement a bit, let’s take a look at a few practical tidbits on how ‘big tech’ leveling/compensation works I collected over the years:
Historically, Google considered itself (& was considered by others) to be a very ‘prestigious’ place to work, so it had a habit of down-leveling folks (meaning bringing in experienced hires at a lower level than they could operate at)
Amazon & Microsoft (mostly at higher levels) both can be quite generous with handing people significant scope of responsibilities, but historically, the pay at both companies wasn’t great, compared to e.g., Google/Facebook
Amazon has mostly fixed the pay issues by now, but for Microsoft, those are still the case until very high levels (usually L67 & above)
Each company offers a very different set of trade-offs in terms of work/life balance, promotion velocity, compensation, etc.
As a result, while it is true that Microsoft’s L67 will usually have a higher scope than Facebook’s L6, it’s also possible that an L6 at Facebook would be paid the same or more (due to discrepancies in pay & other factors between two companies), will have a better average promo velocity, etc.
That’s not to say that a person who is L67 at Microsoft would necessarily want to join Facebook as L6 (things like that happen, but are somewhat rare).
Rather, the point is to illustrate that the way levels align across companies is often quite convoluted, and that can in turn determine certain patterns in people’s behavior when moving companies (e.g., going from Microsoft’s L64 to Google’s L5 is usually a no-brainer, while doing the same for someone who’s an L7 at Amazon’s would probably be a bad idea).
Titles & functions
Finally, in my opinion, there are two more questions here that are worth exploring:
Do titles matter after all?
Within a single company, are leveling ladders the same across all functions?
Does the title matter?
On the question of titles, I am hoping you can guess the answer by now: generally, titles matter very little, compared to the levels.
Here is what it means in reality:
For ‘big tech’ companies, every company knows how their leveling system aligns with everyone else’s — and thus will focus on levels, not titles
If you are looking to break into top-tier tech firms & are currently working at a startup (with some exceptions) or a more traditional company, you should fully expect that your title won’t be given much weight
I know this can feel frustrating, but that’s just the way things are
On the plus side, in many cases, you can still get things like higher TC by making the switch — so maybe losing that title won’t be such a big deal
That’s not to say there aren’t cases where your title can work to your advantage. Levels are generally private, and while companies might try to get you to disclose it, you don’t have to do that — so, if you have a title that covers several levels, it can help you obfuscate things a bit (which can be advantageous for a number of reasons).
There are a few other ways you can make your title work to your advantage when interviewing — I’ll cover those in a separate article later on, since it goes a bit beyond the scope of today’s post.
Are all functions created equal?
Regarding the second question (‘Within a company, are leveling ladders the same across all functions?‘), the answer is a bit complicated, since it really varies based on a company & function in question.
As a general rule of thumb, you can probably safely assume the following:
The leveling ladders used for PMs, SDEs, DS folks & SDMs are usually going to be very similar, with 2 minor nuances:
SDE/SDM are often paid slightly better (~10% difference) than PM/DS
PMs would often have higher average number of YoE, compared to other functions for each level
As for the other functions (e.g., Finance, Business Development, Marketing, etc. — in other words, what can be generally described as ‘business functions’), the following is often true:
On paper, leveling for those will appear to be similar to that of PM/SDE/DS/SDM
At the same time, in reality, for each level, the pay on the business side is typically lower (starting at 10-15% difference for lower levels, to 50%+ difference for higher levels — though it varies by company, e.g. the difference at Microsoft would be less pronounced than, say, at Facebook/Google)
Most of that difference in TC is a result of lower equity grants / refreshers for business functions, compared to PM/SDE/DS/SDM
It’s also often harder to stay an IC, compared to PM/SDE/DS, if you care about the speed of career progression; at some point, you have to find a way to switch to management (which isn’t always easy) to keep growing
At the same time, business functions are usually much more open to people considering making a career switch (e.g., consultants looking to switch to tech), and in many cases won’t require taking a down-level (unlike e.g., PM roles)
So, to sum it up, while some functions might operate on the same, or similar, leveling ladder, there are real meaningful differences one should be aware of, especially when considering making a career switch to tech.
Hopefully, after reading this post, you now have a better understanding of how leveling in tech works. Again, it’s a complex (perhaps unnecessarily so) topic, and the one that’s not very easy to navigate.
At the same time, as with other complex things, knowledge is power, and so if you develop a good understanding of how leveling works, you can in fact use it to your advantage (in particular, when looking for a new job) — I’ll cover this in more details in one of my future posts, so if you’re curious, please subscribe (if you haven’t done that yet) & keep an eye out for future publications! :)