IT salaries begin to thaw, with median pay for staffers at $90,000 and managers at $120,000.
IT is consistently cited as one of the most-promising U.S. careers, even with the rise of offshore outsourcing. As with most professions, however, compensation is rising only modestly. The IT field still pays well, with staffers earning $90,000 in median total compensation and managers earning $120,000, the 2013 InformationWeek U.S. IT Salary Survey finds. But compensation for staffers is flat compared with last year and up only 3% for managers.
Compensation varies substantially by skill and industry. Staffers focused on enterprise application integration earn a median $110,000, those in general IT earn $73,000 and those on the help desk earn $55,000. A few staff specialties such as cloud computing ($130,000), Web security ($118,000) and mobile ($111,000) pay even higher, though our survey sample sizes are small for those areas. Staffers with the IT architect title make a median $130,000.
IT managers earn six-figure median compensation in 22 of 23 job categories -- help desk managers are the exception, earning $83,000. Among IT staffers, 13 of the 23 functions pay more than $90,000, eight of them more than $100,000.
This marks the 16th year of our Salary Survey, so we have data to track long-term trends. Compared with 10 years ago, few IT employers have dropped health insurance and 401(k) match benefits -- the percentage of respondents receiving those benefits declined only a few points, to 81% and 70%, respectively. The one plunge is in "further education/training," down from 45% for staffers and 46% for managers in 2004 to 29% for staffers and 28% for managers today. And people are our most important asset?
Here are some other data points that should serve as a warning for IT leaders looking to find and keep talented people.
>> Paychecks are barely thawing, but don't take your talent for granted.
Our Salary Survey shows IT pros getting small raises and only average bonuses despite signs that hiring is picking up. IT staffers report a median rise in total compensation of 1.1% and managers a rise of 2%. As recently as 2010, both staffers and managers reported a change in median salary of 0%.
Bonuses are at best average across industries. The typical manager gets 8% of pay ($10,000) from bonuses and other cash compensation beyond salaries, which is exactly the average bonus percentage over the past 14 years. Manager bonuses are significantly higher in some industries -- as a percentage of total comp, bonuses in the financial, biotech, distribution, food and banking sectors all average in the low teens. Government, education and nonprofit employers pay their tech managers bonuses that average 2% or less of total comp. As for IT staffers, bonuses represented 3% of their total pay this year, a notch below the 5% historical average.
IT hiring appears to be on the rise, even though we aren't seeing enough demand to drive pay spikes. IT accounted for 13% of the 88,000 net new jobs in the U.S. economy in March, according to a Foote Partners analysis of Bureau of Labor Statistics data. Monthly IT job growth in 2013 is 53% ahead of the pace last year, Foote finds.
A warning for managers: Even though salaries are growing slowly, don't kid yourself into thinking that your "great place to work" office environment will be enough to keep your most talented people if you're not staying competitive on pay. In our survey, staffers cite base pay as a bigger priority than any other, and it's a close third for managers. More than two-thirds of IT pros cite higher pay as the reason for seeking a new job, and nothing else is cited by even half.
>> Don't learn wrong lesson from Yahoo's no-telecommuting flap.
What matters most to IT pros about their jobs? We asked survey respondents to pick seven priorities from a list of 24. Staffers cite "flexible work schedule" third most often (43%), tied with benefits and trailing only pay (48%) and job stability (45%). Just 26% of staffer respondents cite working at home, putting it in the middle of the pack. Managers put a lower priority on job flexibility (35% cited it) and working at home (15%).
In February, new Yahoo CEO Marissa Mayer issued the decree that launched a thousand outraged blog posts: No working at home. Inconceivable, the critics cried. Without offering such job flexibility in this day and age, employers won't be able to recruit a talented, diverse workforce, they said.
If Mayer had said that all employees must be stationed at their posts at 8:30 a.m. and can't leave before 5:45 p.m., I'd agree. Employers must recognize that employees have earned the right to come in late or leave early some days in exchange for working long hours other days. And I suspect that even Mayer, once she has Yahoo's culture (and company size) where she wants it, will become more flexible as time goes on. Our data suggests that the ability to work at home isn't necessarily the deal breaker for most IT professionals that the howling outrage about Yahoo's policy would have you think.
>> Not all analytics is created equal.
For staffers, the analytics/business intelligence function lands in the mid-range of compensation. At a median of $93,000, it earns a modest 3% premium over the typical IT staffer pay despite the hoopla over big data. But this category covers a huge range of skills. There's a big difference between the true data scientist and analyst who can tease out insights from huge data sets, or specialists who can create and manage big data infrastructure to let others do that analysis, and those who are building static reports.
Analytics/BI managers earn much higher median total comp. At $132,000, it's tied for fifth among the 23 job categories in our survey and 10% higher than typical IT manager pay.
The pay premiums are much higher in the data integration/warehousing category, with median total compensation of $109,000 for staff (a 21% premium over typical staffer pay) and $130,000 for managers (an 8% premium).
As my colleague Doug Henschen writes in his in-depth InformationWeek report on salaries for analytics and BI pros, the highest salaries among analytics pros go to "difference makers" who can pull together the right data and make sense of it to meet a business need. Writes Henschen: "The trouble is, there are not enough of these visionaries to go around, particularly with the rise of the so-called big data era driving up demand for the most-gifted employees."
Join us for a roundup of the top stories on InformationWeek.com for the week of December 14, 2014. Be here for the show and for the incredible Friday Afternoon Conversation that runs beside the program.