Salaries Stagnant for IT Workers

Only a slight silver lining shone for it wages in a recent survey.

Only a slight silver lining shone for IT wages in a recent survey. The bottom line: Most IT workers and executives saw little growth in their salaries last year, and many shouldnt expect to see significant pay increases any time soon.

Based on the preliminary results of its January 2006 IT Salary Survey, research company Janco Associates Inc. said mean compensation for computer-industry professionals remained relatively flat over the final quarter of last year, as it has since the beginning of 2004, marking eight straight quarters of level performance.

On the upside, salaries in the wireless communications and security fields have improved at many companies, with management jobs in those fields shifting from midlevel executive jobs into consideration as senior-level jobs at many companies. For the first time since leveling off in 2004, average pay for top IT execs and some specialized workers could actually begin to grow again this year, Janco said.

Among the positions showing gains in pay and visibility, according to the study, were those related to e-commerce operations, including jobs involved with both the Internet and network operations of such business. Other jobs displaying salary growth included IT workers focused on disaster recovery and Internet security, as well as positions involving computer programming or systems networking.

Winners included chief security officers, whose compensation packages increased to about $146,000 at large and midsize companies, and communications managers, who earned about $88,000 at large businesses and more than $90,000 at midsize companies.

The largest increases in compensation were at midsize companies among so-called production operations positions, including vice presidents focused on technical services, project managers, data security administrators, network services supervisors, production services supervisors, and forms and graphics designers.

Unfortunately for the rank and file, average salaries continued to dip somewhat for workers such as software engineers and database specialists. Janco said such staffers earn about $94,000 per year at present, compared with more than $95,000 in its third quarter 2005 report.

Many U.S. businesses are currently looking to cut IT expenditures, rather than increase investments, which will continue to have a negative impact on salary levels, said Victor Janulaitis, CEO of Janco.

"Theres been a degrading of the demand for IT professionals because many companies arent looking at technology to gain a competitive advantage as much as they see it as a cost center," Janulaitis said. "Companies are looking at IT more like any other business unit."

At the same time, the Park City, Utah, researcher reported that some companies have begun hiring more contractors in place of full-time workers to help lower overhead.

Mean annual compensation, including bonuses, for IT execs reached $140,760 in the fourth quarter of last year at large businesses—those with annual revenue of more than $500 million—and settled at $124,472 at midsize companies, according to the survey of about 2,000 U.S. companies.

Compensation for all positions surveyed, ranging from CIO to entry-level jobs, remained relatively flat during the final quarter of 2005, as it has for the last several quarters, with the mean compensation level increasing slightly to $74,636 at years end, compared with a figure of $69,579 in the last quarter of 2004.

However, average salaries of IT execs at large companies fell 1.6 percent over the last quarter, according to Janco, while those of middle managers fell by 3.2 percent and staffers pay dropped 4.9 percent. At smaller companies, executive salaries fell by an average of just under 1 percent, with middle managers losing 1.8 percent and staff pay falling by 2.7 percent.

In a sign that top IT execs are also feeling the salary pinch, Janco reported that the average salary for CIOs, often the most senior technology workers at many companies, has decreased at some businesses, while pay increased slightly for those who report directly to CIOs.

On the benefits front, Janco found that more than 93 percent of IT professionals surveyed had some form of company-paid health insurance, with 78 percent of workers receiving life insurance and another 71 percent offered 401(k) investment plans by their employers.