No Growth for IT Salaries

New research indicates that average salaries for IT workers continue to show little growth. Despite the dour outlook, researchers say payouts to some managers and people working with hot technologies are showing some signs of new life.

Most information technology workers saw little growth in their salary levels during 2005, and many of the professionals shouldnt expect to see significant pay increases any time soon, according to the latest industry wage survey published by researchers Monday.

In the preliminary results of its January 2006 IT Salary Survey, research firm Janco Associates said that the mean compensation for computer industry professionals remained relatively flat over the final quarter of 2005, as it has since the beginning of calendar 2004, marking eight straight quarters of level performance.

According to the study, only top IT executives and workers in several hot technology sectors experienced noticeable gains over the last four months, while some companies have begun hiring more contractors in place of full-time workers to help lower their staff-related overhead expenses.

Park City, Utah-based Janco reported that the mean compensation for IT executives, including bonuses, reached $140,760 per year during the fourth quarter of 2005 at large businesses, and settled at $124,472 in midsize companies, based on its survey of roughly 2,000 U.S. companies. The survey also found that performance bonuses were limited to top IT executives at most companies, with only 38 percent of management workers qualifying for such benefits and new stock options offered to only 29 percent of the IT professionals surveyed.

Janco qualifies large businesses as companies with more than $500 million in annual revenue.

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Compensation for all positions surveyed by Janco, which range from chief information officers to entry-level workers, remained relatively the same over the last six months, according to the January report, with the mean compensation level increasing slightly to $74,636 at the end of 2005, compared with a figure of $69,579 in the last quarter of 2004. Median compensation increased by a greater rate at larger companies, moving up from $79,633 in January 2005 to $79,862 in June 2005 and remaining at that level through the end of the calendar year.

However, in general, IT executives at large companies saw their average salaries lower by 1.6 percent over the last quarter, according to Janco, while middle managers experienced a dip of 3.2 percent and staffer payouts fell by 4.9 percent on average. In smaller firms, executive salaries fell by an average of just under 1 percent, with middle managers losing 1.8 percent and staffers checks lowered by 2.7 percent.

Janco said that wireless communications and security worker salaries have improved within many companies, with the positions themselves moving from midlevel executive jobs into consideration as senior-level jobs. Among some of the other positions gaining momentum in terms of increasing pay and visibility were those related to Internet and network areas of e-commerce, voice/wireless communication, object programming, data security and data warehousing, according to the report.

For the first time since leveling off in 2004, Janco said that average pay for top IT executives and some specialized workers could actually begin to grow again in 2006, but the research firm cautioned that those gains will likely be isolated to several specific areas besides management, including people involved in disaster recovery and Internet security, as well as some types of programming and networking.

In a sign that top IT executives are also feeling the salary pinch, the research company reported that average pay for CIOs, often the top-ranked technology workers in many companies, has actually decreased within some businesses, while pay increased slightly for those technology workers who report directly to a CIO.

In terms of benefits, Janco found that over 93 percent of the IT professionals it surveyed had some form of company-paid health insurance, with 78 percent of workers receiving life insurance and another 71 percent being offered 401(k) investment plans by their employers. However, the report said that some firms may be increasing their focus on hiring contractors in order to reduce benefits-related costs associated with full-time workers.

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Experts said that those companies should be pushed to offer contract workers benefits comparable to their in-house counterparts, and contend that the most successful firms already do so.

"There are a core set of benefits that are required by enterprises of all sizes to attract and retain IT professionals; even firms that provide IT professionals on a contracting basis need to and do provide these benefits," Victor Janulaitis, chief executive of Janco, said in the report. "With the rise in heath-care insurance costs employees of all firms are required to share more of the cost, and elimination of health insurance is not an option."

Among the IT workers with improving prospects over the last quarter are chief security officers, who have seen their compensation packages increase to roughly $146,000 within both large and average-sized companies, as well as voice and data communications managers, who make roughly $88,000 in large businesses and over $90,000 in midsize firms.

Janco said that the most significant increases in compensation levels occurred in midsize companies among so-called production operations positions, including vice presidents focused on technical services, production services supervisors, forms and graphics designers, project managers, data security administrators, and network services supervisors.

Unfortunately for the rank-and-file levels of the IT profession, average salary levels continue to dip somewhat for people such as data entry clerks, database specialists and software engineers. Janco said that such staffers make roughly $94,000 per year at present, compared with over $95,000 in its last quarterly update.

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