InformationWeek

Several years ago, Manning's work group at Bolt, Beranek & Newman, an Internet service provider in Cambridge, Mass., was eliminated. The company moved him into a quality-assurance management role, not the development work he preferred. Also, his salary wasn't competitive--BBN was known for its scientific excellence in network technologies, not its high pay.

Things changed for Manning when electronics giant GTE Corp. bought BBN three years ago. A technology-fueled economy was heating up, unemployment was dropping, and GTE realized it had to keep the talent it had acquired with its new unit, now called BBN Technologies, as it moved into IT services. Says Manning, "GTE knew it had to invest in people." Manning has moved back into engineering and has received a few good pay raises since the acquisition. He's also benefited from a new incentive-based cash bonus program. "I work with interesting peers and on interesting projects," he says. "I'm much more satisfied now and much happier from a personal career perspective."

Manning's career outlook is fairly typical of the views expressed by a majority of the almost 17,000 IT professionals who responded to InformationWeek's annual salary survey: More than half of IT staffers say they're satisfied or very satisfied with their jobs; almost two-thirds of managers feel the same way.

And why shouldn't they be satisfied? It's a great time to be in IT. Information technology is more important than ever to the success of almost any business, and demand for the people who can design, operate, and manage IT continues to drive up salaries. Another aspect that has changed is society's view of IT. Popular culture proffers images of technology workers as the new arbiters of what's cool. IT workers have emerged from the dark recesses of windowless cubicles--at least metaphorically--to bask in newfound respect from the business community.

"IT professionals are no longer pigeon-holed; they're in business as well as technology," says Cleve Rowley, a partner at recruiting firm Matteson Partners.com in Atlanta. "I'm recruiting for the CIO position of a large telecom firm, and a key part of that job is to be part of the strategic-management team."

Still, not every IT professional is riding a wave of popular respect and high pay. Achieving salary satisfaction among the ranks is one of the most difficult goals of any employer, so it's encouraging that InformationWeek's salary survey finds that 45% of staff and 54% of managers are satisfied or very satisfied with their pay. On the flip side, a quarter of staff respondents and almost a fifth of managers are dissatisfied with their pay. Also unsettling is that the percentage of survey respondents who say they're satisfied or very satisfied with all aspects of their jobs dropped eight percentage points for both staff and managers, to 66% and 73%, respectively, since last year's survey.

Observers say a number of likely factors are related to declining satisfaction rates and pay dissatisfaction among the minority of respondents. For some, the strong economy and very low IT unemployment rate (the Department of Labor reported earlier this month a national unemployment rate of 1.5% for systems analysts, for example) may result in longer work hours combined with greatly accelerated development cycles. Meanwhile, reports of workers who strike it rich at dot-com startups can breed resentment among IT workers at more traditional companies.

Barbara Cooper, group VP and CIO of IS at Toyota Motor Sales USA Inc., says the growth of the Internet has resulted in one of the most significant evolutions ever in the IT community. Those changes involve growing pains that IT professionals feel firsthand. "E-commerce is moving so fast that companies are scrambling to figure out what to do," she says. "It's a very confusing time because roles are less defined, so people are more insecure." Such swift and sweeping changes can frustrate IT professionals, who typically like structure and a clear set of tasks, Cooper says, and tend to prefer a well-ordered environment to a chaotic, undefined one.

InformationWeek's salary survey revealed a number of additional trends, including:

• Money is the No. 1 reason people leave one company for another, but it ranks No. 4 as the reason that people stay in their current jobs. By far, professional challenge is what matters most to workers, followed by flexible work schedules and job stability.

• The top-paying management job this year is in application integration--a category that wasn't even listed in last year's survey. Other high-paying jobs for managers and staffers include those that involve work in enterprise-resource planning, the Internet or intranets, systems security, and application development.

• Staffers and managers who work the IT help desk report the lowest base salaries, ranging from $34,000 to $52,000 for staff, and from $46,000 to $75,000 for managers.

• Raises are still well above the national average of 3.5% reported by the U.S. Office of Compensation and Working Conditions for the year ending Dec. 31, 1999, but are leveling out. Within the past year, the median yearly increase to managers' base pay was 8%, down one percentage point from last year, and the median staff base-pay raise was 7.6%, down from 8% last year. Depending on job function, raises in total cash compensation for staffers and managers ranged from 6.9% to 12.5%.

InformationWeek's salary survey also found flaws in the conventional wisdom that Internet startups pay less than established companies because they typically offer stock options that may pay off handsomely--if and when the startup makes an initial public offering. IT professionals working for dot-coms who responded to the survey, about 1,000, have a median total yearly cash compensation of $75,000, compared with $66,000 for the nearly 16,000 respondents who work at other types of companies. In addition, those working for online companies saw a median increase of 13.9% to their cash compensation within one year, compared with 8.6% at the traditional companies.

Matteson Partners.com's Rowley says he's surprised by that finding. His experience is that hiring managers "want people to come in to dot-coms a bit hungry, and venture capitalists aren't eager to fund big salaries."

But Mary Jane Range, president of recruiting firm BTS Strategies, says that's changing. "Dot-coms are coming up with more money because people have greater [personal] financial responsibilities," she says. Consider that startups proliferate in large metropolitan areas such as San Francisco and New York, where the cost of living is considerably higher than the national average. Range says she's working at placing a chief technical officer at an online company where the base salary is about the same as a traditional company--and that's a change from about a year ago. "Last year, the cut in pay was around 25%, but that was offset by equity," says Range. "Now they're getting equivalent salaries plus equity."

Also, since the survey looked at total compensation for dot-com IT workers, instead of base salary, the difference between their compensation and that of other IT professionals may be partly related to maturing equity stakes and bigger cash bonuses at startups.

Paige Saltzman, VP of product management (an IT-business position) at Enamics Inc., a 16-person provider of E-business services in Stamford, Conn., says she was drawn to the startup by both the money and the culture. "Absolutely--definitely--it's the money," says Saltzman, who previously worked at Ingram Micro. "But the culture is just as important--it's casual, you can speak your mind and work flexible hours."

Saltzman says she's excited to get in at the start of new company. While her compensation package includes stock options, she estimates her financial position is about the same as it was at her last job because the new job required relocating to a more expensive region of the country.

Dot-com companies are typically small, making higher pay an aberration in that category. As in years past, the survey found that small companies often don't pay as well as large ones. The median base salary for an IT staffer at a company with annual revenue of less than $1 million is $44,000; wages steadily increase--give or take a few thousand dollars--as revenue goes up, with median staff base pay reaching $66,000 at companies with more than $10 billion in revenue. The same steady salary increase in proportion to company revenue was seen with IT managers, starting at $60,000 for companies with revenue less than $1 million and reaching $86,000 at companies with more than $10 billion in revenue.

continued...page 2, 3