IT salary survey: Recovery not making cents

by Guest Contributor | Jan 12, 2005 3:53:00 PM

Tags: Guest Contributor

Takeaway: CIOs are getting paid a little more these days, but for everyone else, the news is underwhelming, says Janco Associates.

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By Matt Hines
Staff Writer, CNET News.com

According to a new IT salary survey, most tech workers have yet to cash in on the improved conditions emerging in many sectors of the industry.

The 2005 Comparative IT Salary Survey, published Tuesday by research company Janco Associates, indicates that there was a small decrease in overall compensation and demand for technology professionals during the last six months, despite renewed spending in many segments of the market. Janco, based in Park City, Utah, also concludes that the outsourcing of IT jobs continues to have a negative effect on the U.S. and Canadian job markets, the two regions covered in the study.

According to the research, the mean total compensation of survey respondents has dropped by slightly less than 1 percent during the last six months, even as budgets begin to grow again. The survey, which is published twice yearly, focuses on IT jobs ranging from executives to lower-paying positions such as data entry supervisors.

The report said that in midsize companies, or businesses with less than $500 million in revenue, the mean total compensation for IT workers went from $76,259 to $75,406 during the final three months of 2004. In large companies, or those with more than $500 million in revenue, the mean compensation also declined slightly, falling from $80,605 in June 2004 to $80,276 in January 2005.

One of the few bright spots in the salary assessment was for chief information officers, who saw their annual paychecks increase, largely based on year-end bonuses. Janco found that the mean total compensation for CIOs in midsize companies grew by 1.35 percent, from $169,498 to $171,791. In large companies, CIOs had even more to celebrate, as the mean compensation for those workers increased by 4.16 percent, from $162,827 to $169,601.

According to Victor Janulaitis, Janco's chief executive, the growth in CIO bonuses shows that companies are again willing to pay top executives based on their overall success, which could serve as a positive sign for lower-ranking IT workers in the future.

"Companies that are earning money have shown that they're again willing to begin paying these bonuses to senior-level people, based on performance," Janulaitis said. "The good news (is) that this sort of activity tends to filter down to the rank and file over time, but that isn't happening just yet."

Janulaitis said that another positive sign for lesser-ranking technology professionals is that a large number of senior executives are expected to retire over the next several years, opening up jobs for other people. Middle managers may be among those most likely to benefit from this trend, he said.

A trend that continues to hurt the overall IT employment market is outsourcing, wherein companies ship work to other companies, or overseas, in order to save on overhead. Janulaitis said companies are particularly sensitive to positions that undergo dramatic growth in demand, which typically spells increased pay for trained workers.

For instance, he said, increased popularity of the "manager wireless" role--for professionals who oversee their companies' wireless technology operations--caused many companies to outsource the work or eliminate the position and distribute responsibilities to lesser-paid workers.

"Companies are refusing to overpay for people experienced with new or hot technology," Janulaitis said. "With the manager wireless position, you see people looking for money on the job market as their skills are in demand, but companies are choosing to downscale the role and spread the work around to other people."