IT Salaries, Perks Continue to Shrink
Overall pay for IT professionals declined in the past 18 months, and competition for available jobs got tighter as baby boomers postponed retirement, reports Janco Associates
As the economy continues to languish, IT salary trends offer little hope to both working and unemployed IT professionals, as companies cut wages and fewer high-tech positions become available due to attrition.
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Janco Associates today released data from its 2009 Mid Year IT Salary Survey that proves compensation for high-tech workers isn't improving, but declining slightly as more companies prepare themselves for a long economic recovery.
“The current economic climate with its cost-cutting mindsets, business closures and extensive outsourcing has put such a great pressure on the IT job market that overall pay has been impacted,” said Victor Janulaitis, CEO of Janco, in a statement. “Added to that, many baby-boomers who had planned on retiring in the next few years are not leaving the job market and you have more potential employees than positions available. ”
According to the survey of 215 large companies and 526 mid-size organizations, IT salaries fell an average of .19% overall, with midsize enterprise IT executives seeing a nearly 2% decline in total compensation between January 2008 and June 2009. Middle managers at large organizations saw total pay decline by close to .5% as well. The mean compensation, including bonuses, for all IT executive positions surveyed was $142,753 in large enterprises and $123,728 in midsize enterprise companies. Both figures represent a decrease in total compensation on average across some 73 positions surveyed.
"Since the fall of 2008, it has been a very 'poor' period for IT professionals' compensation. Not only has mean compensation decreased due to the lack of bonuses but the supply of IT professionals has exceeded the demand," Janco's report reads.
Not only are companies cutting pay or conducting layoffs, they are also reducing benefits, Janco reports, such as personal and company bonuses.
"Since 2006, there has been a continued reduction in the fringe benefits paid by companies of all sizes. In the case of 401Ks, many companies have stopped providing a contribution to those plans for their employees," according to the report.
Another factor impacting demand for IT professionals is the fact that many high-tech workers are delaying their retirement or re-entering the workforce post retirement.
"There is now a surplus of seasoned IT professionals available. For the second time in less than 10 years, retirements are being put off because of the downturn in the stock market and the resultant reduction in savings available to support IT professionals as they retire," Janco's report reads. "Added to this is an influx of retirees looking to get back into the job market due to the massive reduction in their investment portfolio. "
The positions that show an increased demand tend to have significantly higher offering salaries. This in turn, inflates the level of compensation for individuals who remain in those existing positions.
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