Product Management is one of the hottest and fastest-growing job sectors in 2020. With more and more companies recognizing product management as a critical business function, the field has experienced an astounding 32% growth from August 2017 to June 2019. Glassdoor also ranked Product Manager as the 4th best Job in the US based on salary, job satisfaction, and potential job growth.
The career path is indeed a promising and fulfilling one. The job offers more than enough money to live life fully and lets you work reasonable hours. You will work with smart people and work towards meaningful goals. You can also expect added benefits, such as catered meals, gym membership health insurance, and stock options. On top of that, product managers make real and lasting impact and companies welcome diversity in this role.
So how much does a product manager actually make? The answer is not straightforward. Each company has different titles for its product managers and has unique recruitment and promotion criteria. Even job responsibilities vary significantly between organizations.
Some companies follow a hierarchical approach and have product managers on every level, while others have a single role in a cross-functional capacity. Factors such as financial strength and business goals largely influence the team structure and, ultimately, the pay scale.
In this piece, we’ll identify and dissect the five key factors that determine the product manager’s salary. You’ll also learn about exciting product management job titles, their salary ranges, and their requirements. Finally, you will understand how external factors can impact your pay scale to a great extent. So get ready!
5 Key Factors that Determine a Product Manager’s Salary
A quick comparison between Product Managers’ salaries posted on top job portals, such as Glassdoor, Payscale, or Indeed, might make you think that pay meters are faulty. The numbers do not add up, and the standard deviation is too high. The salaries even range from $55k to a staggering $200k.
This unusual variation can be attributed to several internal and external factors. Each factor is significant enough to cause severe fluctuation by itself. Here are the five key factors that determine how much a product manager should make.
- Rank (or Seniority)
- Company Strength
#1 - Rank as a Factor for Product Management Salary
Rank is a combination of three E’s: education, experience, and expertise. It is the core driver of salary increments in every job; product management is no exception.
Associate Product Manager - Entry Level
Associate Product Managers (APMs) work with development, engineering, and design teams on a cross-functional capacity. Their job is to ensure the steady development and timely delivery of products.
Technical duties involve collecting product and user data, analyzing customer feedback, and devising product strategies accordingly. Their roles overlap significantly with those of middle-tier product managers. The only difference is that an associate lacks company-wide decision-making abilities.
- Years of Experience: 0-2 years
- Educational Requirement: Zippia determined that 48 percent of Associate Product Managers usually have a bachelor's degree in business or related fields, and 37 percent have master's degrees.
However, experts confirm that you can enter the field with only a high school degree, provided that you have the necessary skill set as a product person. Most applicants have previous internship experiences in product management or customer-centric fields, such as marketing or sales.
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Average Annual Salary:
- $96,010 (Glassdoor)
- $68,888 (Payscale)
- $82,210 (Indeed)
Range: $49,000 - $129,000
Yearly Cash Bonus: $3000-$5000
Technical Product Manager - Entry Level
Technical Product Managers act as bridges that connect an organization’s business and technological domain. They are responsible for creating product roadmaps, developing core product specifications, and working alongside the development team to create product strategies in tandem with the long-term product vision.
In a nutshell, technical product managers are business representatives in the company’s technology decisions.
- Years of Experience: 2-3 years
- Educational Requirements: The title is pretty self-explanatory. However, what technical skills you must have depends entirely on the company you are applying for, the industry, and its nature. As for academic qualifications, 38% of Technical Product Managers possess a bachelor's in Business or Computer Science, while 37% have master's degrees.
However, technical managers without formal education are also common in the industry. These managers have previous career experience in project management or related software fields.
Average Annual Salary:
- $63,200 (Glassdoor)
- $105,817 (Payscale)
- $128,329 (Indeed)
Range: $68,000 - $148,000
Yearly Cash Bonus: $5000-$10000
Software Product Manager - Entry Level
Software Product Managers are no different from mainstream product managers. However, as the name suggests, they mostly deal with digital products. Their roles involve developing software products, crafting product strategies, creating customer values throughout the product cycle, and delivering profitability.
- Years of Experience: 2-5 years
- Educational Requirements: 37% of Software Product Managers have a bachelor's degree in Business, Finance, or Computer Science. Moreover, 42% have master's degrees. Similar to other entry-level jobs we discussed, software product management does not demand a mandatory college degree. Instead, previous career experience in software engineering is recommended.
- $108,992 (Glassdoor)
- $96,194 (Payscale)
- $107,358 (Indeed)
Range: $65,000 - $146,000
Yearly Cash Bonus: $8,000-& $9,000
Technical Program Manager - Entry Level
Technical Program Managers (TPMs) are risk managers. Their prime responsibilities include initiating programs, managing program processes, monitoring progress, track down technical anomalies, and acting as support centers in times of emergencies. From time to time, they review codes and designs as well.
Since technical program managers are also in-charge of contingency strategies, they are known as Agile Product Development Manager in many communities.
- Years of Experience: 3-5 years
- Educational Requirements: Although it is possible to enter the field without formal education, 37% of Technical Program Managers choose to have a bachelor's degree in Business and Management, and 39% pursue master's degrees. Moreover, candidates with extensive project management experience are likely to get the upper hand in the recruitment process.
- $78,136 (Glassdoor)
- $123,183 (Payscale)
- $143,494 (Indeed)
Range: $53,000 - $162,000
Yearly Cash Bonus: $11,000-$12,500
Senior Product Manager - Executive Level
A Senior Product Manager is a leadership role that entails managing multiple product teams or supervising several Product Managers. The position enables a person to have company-wide decision-making abilities, focus less on hands-on product development, participate in more impactful meetings, and maintain communication with important stakeholders. Some Senior Product Managers also perform basic HR roles, such as recruiting and managing talents.
- Years of Experience: 5-8 years
- Educational Requirements: Almost every job description of a Senior Product Manager, we have come across requires candidates to have formal education in business fields, such as Marketing, Management, or Finance. Demand for a master’s degree is also on the rise. 38% of Senior Product Managers thus have a bachelor's degree, and 47% have master's degrees.
Furthermore, most Senior Product Managers were either of these three in their previous roles: Project Manager, Product Manager, or Marketing Manager. However, it is not uncommon for people from other disciplines to make their way into the field.
- $123,895 (Glassdoor)
- $124,784 (Payscale)
- $139,252 (Indeed)
Range: $82,000 - $165,000
Yearly Cash Bonus: $13,000-$15,000
Group Product Manager - Executive Level
Group Product Managers are in-charge of larger product teams in the company. The role demands leadership. Hence, most managers in this field follow a bigger-picture approach and focus more on team management. However, some tend to lean towards individual contributions and are involved in hands-on product development.
To sum up, Group Product Managers stand on a spectrum between individualism and collectivism.
- Years of Experience: 5-7 years
- Educational Requirements: The more we move up the hierarchy, the less we see product managers without a college degree. Formal education and experience become a pre-requisite for applying to executive-level jobs.
33% of Group Product Managers have a bachelor's degree, while 51% have master's degrees. Moreover, most Group Product Managers have previous career experience as a Senior Product Manager or Marketing Manager.
- $108,992 (Glassdoor)
- $152,288 (Payscale)
- $195,759 (Product School)*
Range: $99,000 - $193,000
Yearly Cash Bonus: $19,980
Director of Product Management - Executive Level
The Director of Product Management is purely a supervisory role. The Director stands above all other functions that we have discussed until now and is responsible for maintaining a smooth work process. Major roles involve collaborating with other Directors, approving new product development, updating stakeholders, overseeing the entire product line, and acting as the product evangelist.
- Years of Experience: 7-12 years
- Educational Requirement: Unless the company hires the Director of Product Management internally, the recruitment panel usually prefers someone with a Master’s degree, or at least a bachelor’s. A whopping 86% of all Directors at Product Management have reported formal education in their resumes.
Furthermore, previous career experience in a product leadership role is a must-to-have requirement in most job descriptions for Director of Product Management.
- $149,238 (Glassdoor)
- $144,449 (Payscale)
- $149,234 (Indeed)
Range: $108,000 - $193,000
Yearly Cash Bonus: $19,000-$20,000
Vice President, Product Management - Top Tier Level
You can consider the Vice President of Product Management as the product manager for the organization itself. The VP is responsible for creating company-level product strategy, align the strategy across all departments to deliver optimum business outcomes, lead organizational decision-making, and mentor other executives for future leadership.
- Years of Experience: 9-15 years
- Educational Requirements: Director of Product Management is the stepping stone for becoming a Vice President. Therefore, both roles have the same academic requirements.
- $181,145 (Glassdoor)
- $172,162 (Payscale)
- $199,414 (Indeed)
Yearly Cash Bonus: $29,000-$30,000
Chief Product Officer - Top Tier Level
Chief Product Officer stands at the top of a company’s product management pyramid. The Chief drives the entire product operations, makes impactful decisions that lead to sustainable values, and balances organizational and product-level needs. The core goal is to facilitate and streamline product development processes.
In smaller companies, the Vice President assumes the role of a Chief Product Officer.
- Years of Experience: 12-15 years
- Educational Requirements: The same as the other top-tier product management positions.
- $195,757 (Glassdoor)
- $183,724 (Payscale)
- $199,414 (Indeed)
Yearly Cash Bonus: $29,500-$30,000
#2 - How Location Impacts a Product Manager Salary
Location is the second most important determinant of a product manager’s salary. It has two components: the cost of living and job demand.
High costs of living translate to higher wages. On the other hand, when demand for product managers outruns the supply in a region, companies will naturally offer more lucrative pay packages.
Product Management Roles Outside the United States
Product managers in the US are paid the highest. Nordic countries are the closest to the US in salary ranges. On the other hand, European nations generally have a high variation in pay scale. In comparison, the average product manager’s salary is relatively high and stable in the Australian continent.
Here is a glimpse of how much product managers make all around the globe.
Product Management Roles Within the United States
There exists a significant standard deviation in a product manager’s pay scale, even inside the country. For instance, the pay scale in New York for product managers is outrageous: 129% above the national average. Cities in the East and West Coasts also report higher salaries.
The following graph describes what amount (in %) cities in the US pay above the national average.
#3 - How Industry Affects a Product Manager Salary
The thumb-rule is that fast-growing industries that rely on technology pay the most to product managers. However, salary variations among companies in the same industry are common as well. Here is a visual comparison of a product manager’s salary across various sectors.
#4 - How Company Strength Impacts a Product Manager Salary
This is a no-brainer. Leading companies will naturally pay their employees higher than the industry benchmark. Although the average product manager’s salary is currently $108k, some of these companies have pushed the bar to beyond $200k.
Following is a list of the eight best places to work as a Product Manager in 2020 for not only their cash incentives but also their vision and personality.
#5 - Certifications as a Factor for Product Manager Salaries
Do certifications determine a product manager’s salary? The link is relatively weak. However, certificates work as confidence boosters or skill upgrades that eventually lead to better performance and salary increments.
If you're still a beginner, product management courses can give you an idea of where to start and help you master the product lingo. Mid-level product managers can refine their understanding and reassess their on-the-job training and methodologies. Finally, executives can pursue certifications to remain updated on the product world, learn current industry standards, and become a visionary leader in overall business process.
Hopefully this article gives you a picture of the salary ranges for product managers and the factors that play into landing a role. We should mention that crafting your resume an another aspect to think about when applying for a product manager role. And we intentionally left out one key factor that plays important role in determining your salary as a product manager, that is negotiation skills.
Product Managers command significant authority in company affairs to merit their desired salary. Negotiation starts with self-development. Take up courses. Pursue cross disciplines. Maybe dive into the basics of coding or design. Engage in more hands-on projects with other departments.
All in all, devote yourself to become a better professional every day. The perks will follow.