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April 26, 1999

1999 National IT Salary Survey:
Pay Up

IT salaries continue to climb, especially in the hot areas-ERP, data mining, the Internet--as companies clamor for IT skills

By Jennifer Mateyaschuk

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he Internet keeps expanding as a business platform. Electronic-commerce Web sites enjoy their greatest popularity, and almost every company is looking to exploit the Internet for all it's worth.

Little wonder, then, that the Internet is one of the hottest areas of IT management. According to InformationWeek's National IT Salary Survey of more than 21,000 online respondents, Internet managers report the second-highest median annual percentage increase--12.9% over last year--among all managers surveyed. They also enjoy a healthy median annual salary of $70,000.

But it's not just Internet managers. IT professionals of all ranks are having another big year. The median annual salary increase across the board was a hefty 8.9%, bringing median base pay for all respondents--managers and staff--to $61,000, according to results of the survey, among the largest employee studies of IT compensation ever (see chart, below). IT pay--and pay raises--continues to outpace inflation and the salaries of non-IT workers. Based on Department of Labor estimates, the median salary for all full-time workers in 1998 was $28,000, and the median pay increase was 5.9%.

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Other key survey findings:

IT managers earn a median annual base salary of $71,000, up 9.2% from 1998.

IT staff members earn a median annual base salary of $54,000, up 8% from 1998.

A challenging job is important. In all, 86% of staff members and 89% of managers said job challenge was more important than base pay and job atmosphere.

Job-hopping is common, with staffers moving on after four years, while managers stay for about five years. That's not surprising, considering 70% have been contacted by headhunters this year.

Survey results also show that technologies once thought of as stepchildren in the IT arena are gaining in importance. Security staff received the highest pay increase of any IT staff position. And help-desk managers received the highest pay increase of the 12 management areas surveyed.

The survey confirms what's probably perceived wisdom about the other hot areas in IT: Year 2000 work is worth the most for managers (at least for the time being); for staff, it's enterprise resource planning work; and data mining expertise is the most sought after. The next move for ambitious IT workers, according to recruiters: combining those skills.

It's not hard to understand what's keeping the market for Y2K managers boiling. "We see a panic move starting to take place," says Joe Dyer, client services manager at TTC, a Germantown, Md., designer of telecommunication systems with about 20 internal Y2K staff members. "Corporations that should have been implementing a plan a year ago are discovering they have six months left."

Also bumping up Y2K salaries, at least on the management side, is the fact that seasoned professionals often oversee Y2K projects, because they have to deal with a variety of older, proprietary technologies. "A qualified Y2K manager oversees everything from mainframes to elevators," says Dyer. The median salary for year 2000 managers topped the survey at $88,000. Y2K staff fared well, but had a lower median salary of $62,000.

Unlike most other IT specialties, Y2K managerial salaries at smaller companies were higher than at midsize companies, at $82,000 and $78,000 respectively, according to the survey. Y2K managers say smaller companies are less likely to have in-house experience and so depend on outside experts who are in scarce supply and can command higher salaries.

Windfall Salaries
Gymboree Corp., a designer of children's clothing with 575 retail stores, initially hired 13 contract employees for its Y2K work but has since brought some of them on as permanent staff for other IT jobs. "The initial phase requires so much more work for planning and getting the required information," says Judy Carter, project manager of the Burlingame, Calif., company's Y2K program. "We're about halfway through the remediation now, and we hope to convert the remaining contractors to employees when we're finished."

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Gymboree pays Y2K contract workers $100,000 to $120,000 per year, plus an additional amount to the agency that supplied them. But the windfall salaries should revert to more run-of-the-mill IT pay when the Y2K work is complete, says Carter.

Already slowing down is the mad dash to implement ERP systems. While the demand for ERP staff is likely to continue--these employees have the highest median salary of any staff function, $65,000--ERP managers fell behind other specialists, including security, data mining, and application development managers, in median pay, according to the survey. Recruiters say this is likely because fewer new ERP implementations will occur over the next year.