Tech Salaries: The Good News (And the Bad)

Wednesday Feb 6th 2008 by James Maguire
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An early 2008 IT salary survey reveals a disquieting trend, but also offers a ray of sunshine for those with certain skills.

[Note: see IT salary chart at the bottom of this page.]

The Dice salary survey completed in January 2008, based on 19,000 tech professionals, offers some good news and some not-so-good news.

On the cheery side:

• IT wage growth in major metropolitan areas like Atlanta and Boston, and especially Silicon Valley, keeps chugging along. (Here's a chart of IT salary growth by city.)

• While the days when tech salaries were zooming upward are behind us – at least for now – certain IT specialties are still enjoying healthy boosts. If you’re a project manager or an MIS manager, employers will show you the money.

• Overall, tech workers are still some of the best paid workers across a wide array of professions. The 2007 average tech salary was $74,570.

• Based on U.S. Bureau of Labor data, the unemployment rate for IT professionals remains blissfully low, at 2.1 percent, versus a national average of around 5 percent.

But everything’s not rosy. Check out these gloomy tidbits:

• Between 2006 and 2007, the average IT salary grew a measly 1.7 percent – not even keeping up with inflation.

• IT newbies – workers with less than 1 year of experience – suffered a 2.2 percent decline in average salary, to $41,457.

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Scot Melland, CEO of Dice, says that the IT sector has proven resilient in the face of dark economic headlines.

“There’s definitely a lot of gloomy news out there for the economy as a whole, but if you look at the tech sector in particular, the news is actually a little bit better – especially in the labor market.”

The low IT unemployment in tech, at 2.1 percent, “shows the tightness in the labor market,” Melland tells me. He notes that economists talk about “full employment” as any figure less than 4 percent; by that measure, tech professionals are a highly desired bunch.

After all, employment will likely never get to that mythical 100 percent figure; if the 2.5 percent tech unemployment figure is to be believed, virtually every qualified IT professional who wants a job, has one. (Whether that job is their dream job is another question.)

More than 93,000 tech job openings are posted at Dice, with the average job listing staying up for about 14 days, Melland says. New jobs are constantly opening up. “You might see 90,000 plus positions, but those positions are always changing.”

(The total number of U.S. technology professionals is 6-8 million, by Dice’s count, with other organizations putting the number at around 10 million.)

As Melland sees it, the stagnant wage growth between ’06 and ’07 is not as bad as it seems. The paltry 1.7 percent increase was a slow down after the robust increases of ’05 and ’04; such salary boosts simply couldn’t be sustained.

Moreover, bonuses and stock options are not reflected in the salary figures, he says. “And there’s more use of bonuses and stock options than in years past.” These one-time rewards are less risky for employers than ongoing salary increases.

The Dice salary survey shows that it’s a great time to be a project manager or MIS manager. These specialties saw the biggest increases. Melland says that demand for project managers has increased 25 percent per year for the last two years.

“Those project manager positions, and architect positions, are less impacted by the threat of outsourcing,” he says. Many companies still want their project leader domestically based, even if they ship development work overseas.

The year 2008 should be at least a reasonably good one for IT workers, Melland predicts.

“I think we’re going to see a continued tight job market with low unemployment. The tech sector has not been impacted by the slow down in the economy,” he says. “On the salary front, it’s difficult to predict, there’s all sorts of other factors that work in there. But I think it’s fair to say that there will be healthy job market for tech growth throughout 2008.”

Salary figures provided by Dice:

(Next page: Salary by region/city, by area of expertise, by industry sector, and by years of experience.)

• Note the significant salary boost for Project Managers. Also, that's not a mistake for Systems Developers - they really saw a more than 12 percent increase.

$39,430
JOB TITLE: 2005 2006 2007
IT Management (CIO, CTO) $102,326 $106,272 $107,830
Project Manager $93,009 $96,475 $101,292
Developer: Systems $72,732 $78,476 $88,361
Database Administrator $81,301 $85,441 $85,092
Software Engineer $78,807 $83,524 $84,122
Business Analyst $77,158 $82,288 $84,101
Developer: Database $73,768 $79,911 $83,163
Developer: Applications $73,636 $78,037 $79,421
Developer: Client/Server $75,941 $74,602 $78,173
Programmer/Analyst $65,174 $69,757 $71,623
Quality Assurance Tester $64,486 $68,280 $68,952
Web Developer/Programmer $61,261 $65,327 $68,571
Network Engineer $65,122 $67,202 $68,391
Systems Administrator $63,698 $64,917 $66,388
Network Manager $65,122 $67,202 $64,638
Technical Support $47,259 $49,347 $49,384
Desktop Support Specialist $42,204 $44,909 $46,458
Help Desk $37,397 $41,154
PC Technician $34,563 $36,848 $36,974

(Next page: Salary by region/city, by area of expertise, by industry sector, and by years of experience.)

(Salary figures provided by Dice.)

Metro Area IT Salaries, 2005 - 2007

Some regions are stagnant (and some are actually down) but Silicon Valley continues to rise:

METRO AREA: 2005 2006 2007
Silicon Valley $85,430 $90,310 $93,876
Boston $79,211 $80,308 $83,465
Baltimore/ Wash. D.C. $75,593 $79,911 $81,750
Los Angeles $73,911 $79,583 $81,039
New York $76,382 $80,006 $80,770
Seattle $73,105 $79,787 $79,636
Denver $74,823 $77,317 $77,846
Dallas/Ft. Worth $71,494 $74,656 $76,560
Chicago $71,496 $75,154 $76,407
San Diego $72,163 $79,416 $75,994
Atlanta $73,684 $72,323 $74,822
Philadelphia $71,881 $72,786 $74,442
Hartford $72,265 $71,796 $73,372
Houston $68,358 $71,526 $72,733
Phoenix $70,023 $74,976 $71,246
Detroit $64,154 $67,080 $67,271

Top Average Salaries for Popular Technology Skills, 2007

Some highly paid tech specialties:

AREA OF EXPERTISE: 2007
ETL - Extract, Transform and Load $96,559
ERP - Enterprise Resource Planning $95,589
SOAP - Simple Object Access Protocol $95,387
Business Intelligence $94,317
Data Warehouse $93,200
ITIL $92,663
JBoss $92,518
Sarbanes Oxley $91,542
Korn Shell $90,948
Siebel $90,833

Tech Salaries by industry sector, 2005 - 2007

The difference in pay levels between industry sectors is very significant:

INDUSTRY SECTOR: 2005 2006 2007
U.S. Average $69,700 $73,308 $74,570
Financial-Insurance $76,092 $82,504 $82,961
Computer Software $74,730 $77,582 $79,756
Telecommunications $72,430 $78,003 $77,312
Government-Defense $69,078 $75,086 $77,187
Medical-Pharmaceutical $71,714 $72,717 $74,689
Manufacturing $66,732 $71,878 $73,470
Internet Services $65,426 $71,854 $71,538
Computer Hardware $66,462 $69,987 $70,740
Retail-Mail Order-E-Commerce $55,909 $63,830 $66,782

Average Salary by Years of Experience, 2005 - 2007

Along with project managers, experienced professionals are in demand:

YEARS OF IT EXPERIENCE: 2005 2006 2007
Less than 1 year $37,471 $42,414 $41,457
1-2 years $41,229 $46,935 $47,648
3 - 5 years $52,363 $55,922 $58,037
6 - 10 years $68,355 $72,707 $73,449
11 - 14 years $80,933 $83,907 $86,426
More than 15 Years $86,332 $90,125 $93,107

Average Salary by Level of Satisfaction, 2007

Not surprisingly, better paid workers tend to be more satisfied:

LEVEL OF SATISFACTION: 2005 2006
Very satisfied 14% $93,065
Somewhat satisfied 39% $81,684
Neither satisfied nor dissatisfied 15% $71,091
Somewhat dissatisfied 21% $63,612
Very dissatisfied 11% $51,560
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