Inside the "IT Salaries are Rising" Report

Tuesday Feb 17th 2009 by James Maguire
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It’s hard to believe reports that 2009 IT salaries are rising, until you look at factors that are keeping tech salaries stable (so far).

Yes, it’s almost shocking: a widely publicized report from Computer Economics, a research firm that tracks IT trends, claims that IT salaries will actually rise in 2009.

Really, a salary increase? Are you kidding me?

For IT staffers everywhere, their jobs are like life during wartime. Layoffs mean the body count is falling precipitously. Sysadmins are keeping their heads down in hopes that no one notices they’re drawing a salary. A steady drumbeat of grim news casts a pall over datacenters everywhere.

Forget a salary boost. The optimists are dreaming of simple survival.

Yet there’s that sunny report from Computer Economics. The firm projects that median pay for IT professionals will rise about 2 percent in the stormy year of 2009. Even more surprising, certain fortunate groups, namely execs, directors, managers, and developers, will enjoy a 2 to 3 percent boost.

(If you really want to bathe in optimism, think of this: with inflation supposedly flat, or even declining, the two percent is a real increase.)

The IT salary graph looks like this:

IT salary, 2009

And here are the increases by IT sector:

it salary 2009 by group

The rosy salary stats from Computer Economics agree with the upbeat outlook of Robert Half, which also projects an IT salary boost in 2009. Yet they disagree with the sober forecast of Janco Associates. Published in Jan ’09, the Janco IT salary survey indicates that IT wages will fall – modestly – in this dark year.

Bear in mind that both the Robert Half and the Computer Economics surveys were conducted before Janco’s. The Half survey was published in November 2008, presumably using data gathered through the year, and Computer Economics’ survey was conducted in October 2008. Since Janco’s is the most recent, that may explain its more pessimistic take.

Hoping for a burst of sunshine, I called John Longwell, director of research at Computer Economics. So, I asked, your numbers are higher than Janco’s. Tell me that this good news is for real.

Longwell put today’s IT salaries in perspective in a way that was neither all gloom or overly sanguine.

The slightly higher salary numbers reflect the fact that, despite headlines, the vast majority of IT staffers remain employed. IT employers “are not going to slash people’s salaries in a recession,” he says, perhaps a tad optimistically.

“But they may be hiring people on – if they’re doing any hiring at all – maybe at a lower rate.” Although these new workers may be making slightly less, plenty of existing IT professionals are hanging on to salary levels attained in the brief period between the last recession and this one.

And in good times and bad, employers covet solid IT talent. “Companies, if they can, they’re still going to want to give that annual raise to their good employees, even if it is two percent,” Longwell says.

The median IT salary resists change. “The median salary doesn’t move that greatly from year to year,” Longwell says. “A year from now it may be lower – but it’s not going to be lower by a lot.”

By the way, here’s a look at some typical U.S. median salaries as computed by Computer Economics:

Service Desk Manager: $77,270

Network Administrator II: $59,281

Unix System Administrator III: $89,360

Help Desk Representative I: $39,773

Senior Applications Architect : $96,219

Application Programmer III : $76,223

Another fact that keeps the median IT salary figures steady: IT salary forecasts, whether upbeat or downbeat, essentially ignore the legions of laid off workers. Since axed workers’ paychecks are (unfortunately) eliminated, they are not included in the median salary computations.

As Longwell explains, employers “could be laying off people and giving raises.”

Next Page: Remaining IT workers better paid?

This fact alone, depending on how you crunch the numbers, might make IT salaries appear modestly higher. As laid off workers are removed from the average, only the more essential workers remain. These essential staffers are (in theory) better compensated than their expendable colleagues.

But this formulation could certainly be debated by economists and accountants – not to mention disgruntled IT staffers who are still employed yet don’t feel like they’re “better compensated.”

Also contributing to the resilience of IT salaries is the lingering effect of the dotcom crash, with its massive tech bloodletting. IT wages fell, and some disenchanted professionals left the field altogether. College students, witnessing the carnage (and scary headlines about outsourcing) became leery of going into tech. Computer science enrollment has suffered dips in the intervening years.

Acknowledging this trend, the Computer Economics report includes this:

“IT wages experienced no growth and, in some cases, declines following the last recession and only began to recover in 2004. But that recession was led by the technology sector. The subsequent tightening in the labor supply and drive to improve data center productivity has put IT organizations in a better position to respond to this recession.”

I’m not sure how a “tightening labor supply” helps IT organizations – it’s good for IT workers but it actually causes companies’ labor costs to increase. On the other hand, the phrase about “improved data center productivity,” referring to the trend toward automated monitoring, acts to lower IT employment (but theoretically increase the wages of the few remaining IT wizards who understand the monitoring apps).

On a less cheery note, the report also includes this note of unalloyed pessimism:

“The longer this recession persists and the deeper it goes, the more rising unemployment, bankruptcies, and deflation will conspire to put downward pressure on IT salaries, as it will for salaries in other occupational groups.”

Yes, unfortunately that’s true. We can only hope, as the cloud cover gets darker, that the recession ends sooner rather than later. Good luck with survival.

Also see:

For IT Workers, How Bad Will It Get?

How to Not Get an IT Job: 10 Tips

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