InformationWeek
Defining The Business Value Of Technology
June 21, 1999
It Pays To Job HopChanging jobs can be a way to catch up on salary
By John Eckhouse and Eric Chabrow
here's always been an assumption that changing jobs results in a higher salary, and the 1999 National IT Salary Survey conducted by InformationWeek Research proves this thesis. IT professionals who joined their present employers in the past year received far higher pay raises than more senior employees with more than a year of tenure. That's true for managers and staff, regardless of the number of years they've worked in the IT field.IT professionals usually move to new positions about every five years; staffers change jobs about every four years, according to the salary survey.
Pay raises are a good motivator, since job jumpers got raises twice as high as those given to IT professionals who stayed with their employers. "In today's competitive labor market, it's easy for skilled IT professionals to be paid more," says Georgine Young, an IT compensation consultant at Hewitt Associates, a compensation and benefits consulting firm that provided technical assistance in designing the National IT Salary Survey.
But though they received big raises, job changers don't earn significantly more money than their peers. The higher pay mostly gets job changers back on track and brings their base salary in line with the median salary for their jobs. Managers of application development and networking earn the same median salaries--$80,000 and $65,000, respectively--regardless of where they worked a year ago. However, median salaries for newly hired data center managers rocketed to $72,000, $4,000 more per year than their colleagues who stayed put. Conversely, help-desk and IT-support managers who switched jobs earned a median salary of $55,000, $5,000 less than those who didn't switch jobs.That job jumpers aren't making more than their peers at their new companies suggests that the companies they left weren't paying competitive salaries. "It's a reflection on variation of IT pay practices," Young says. "A lot of companies aren't aggressively managing IT salaries."
Job jumpers with the fewest years in IT earn the biggest percentage raises because they have the lowest base salary. Job changers with less than eight years in IT got a median salary increase of 16% this year compared with 10.8% raises for those with eight to 14 years of experience and 7.7% for those with more than 14 years.
Staff and managers in Internet functions who changed companies within the last year earned the biggest raises, a median of 15.4% for managers and 14.4% for staff. Internet managers on the job for less than a year received twice the percentage raise earned by colleagues who have been at their current jobs for more than a year. That pulled the newcomers' median base salary to $73,000--$3,000 more than the veterans.Enterprise resource planning staffers on the job less than a year reaped pay raises about 108% higher than ERP veterans. But even these raises brought the job jumpers' median salaries up to only $61,000--still $5,000 a year less than what veteran ERP staffers earn. For key skills such as ERP, many companies distribute bonuses at the completion of a key project to encourage people to stay until the project ends.
From the IT professionals' perspective, changing jobs corrects a perception that they're not being treated fairly by their employers. It's not unusual for employees to know--or think they know--what their colleagues earn. If they believe they're making $20,000 a year less, they may bolt. "Management needs to pay attention to what's being said on the company grapevine," Young says.
Still, it's not always easy for employees to leave one job for another, even for more money. They're walking away from established 401(k) plans, potential bonuses, and unvested stock options. On the noncash side, they're starting over with a new vacation schedule, new co-workers, and perhaps a longer commute. Employers who can't compete on base pay sometimes can retain IT workers by providing challenging assignments and job growth. Among IT managers and staffers, job challenge rated higher than base pay in the salary survey. Says Young, "Many people who leave their jobs don't perceive their contributions are being valued appropriately."Methodology
InformationWeek Research is conducting its year-long 1999 National IT Salary Survey on the Web, where the results are collected and tabulated by CIC Research, a San Diego market-research firm. Information presented here is based on responses from 22,853 IT professionals to date. To participate in the survey, go to www.informationweek.com/salary.
Results from the salary survey are the foundation of the InformationWeek IT Salary Advisor, a tool that lets IT professionals compare salaries by job function or title, years of IT experience, geographic area, industry, and company size. Developed by Information Builders Inc., a New York software maker, the IT Salary Advisor can be found at www.informationweek.com/itsalaryadvisor.
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