IHL: With IT Salaries, Size Matters

Retailers hedge their bets by raising salaries when IT projects are looming.

The bigger a retailer's IT budget is for next year, the better the IT salary raises will be this year. That's the intriguing conclusion reached by the IHL Group this week, when analyzing data about IT spending with major retailers.

It wasn't simply that larger companies have larger IT departments and that, therefore, managers make more money. IHL President Greg Buzek noticed salary spikes the year before major IT investments were due to hit, as though retailers boosted salaries to keep key people from leaving right before a major project.

"If you're in store operations or IT, the more they'll spend next year, the more they'll pay you this year," he said, referring to a study his company did with RIS News.

The average percentage raise for IT people working for companies with annual revenues of less than $1 billion was 4.13 percent, compared with 4.47 percent for those companies making between $1 billion and $5 billion, and 5.75 percent for companies with annual revenues of more than $5 billion.

The salary percentages ranged sharply based on retail segment, with food and grocery at 3.01 percent, convenience and gas at 4 percent, specialty-hardware at 4.13 percent, wholesale clubs at 4.45 percent, drug stores at 5.01 percent, department stores at 5.36 percent and specialty-software at 5.96 percent.

But the most interesting correlation was with the IT spending. For companies whose next year budgets reflected a spending decrease, the average raise was 2.96 percent. When there was an increase that was less than five percent, the average raise was 4.53 percent. When there was an increase of five percent or more, the average raise was 4.82 percent.