IT salaries begin to thaw, with median pay for staffers at $90,000 and managers at $120,000.
>> Application development is surviving against outsourcing.
Staffers who classify themselves in an application development function earn a median $100,000 in compensation, ranking this function eighth out of 23. Among managers, application development ranks fifth, at $132,000, tied with business intelligence/analytics and enterprise application integration.
IT pros in the U.S. have gone through wrenching change over the past decade as programming jobs went to India and other lower-cost countries. In our 2003 survey, we asked unemployed IT pros what job they did most recently, and 16% -- the No. 1 answer -- said application development. Nevertheless, app dev salaries have held up reasonably well. In our 2003 Salary Survey, for example, app dev compensation, at a median $73,000, also ranks seventh.
We're seeing growing interest in in-house app dev teams as software becomes a more crucial part of the customer experience companies deliver. Think of mobile apps. Most companies started by outsourcing that development function, but as mobile apps have become vital to retail and other companies, they're bringing that expertise in-house.
Outsourcing shows no sign of abating. Half of the companies represented in our survey use onshore and/or offshore IT outsourcers, about the same share as in 2004. IT pros aren't quite as discouraged about outsourcing's impacts as they were a decade ago.
Just over half of staffers and managers say it has led to fewer IT jobs, compared with 75% who felt that way in 2004. Two-thirds of the IT pros in our survey say outsourcing hasn't impacted their careers, and 13% of staffers and 20% of managers say it has led to expanded or new responsibilities.
>> The gender gap persists.
Across our survey, female IT staffers earn 13% less in total compensation than male IT staffers; female IT managers earn 10% less. That gap is nearly identical to what it was 10 years ago.
However, our data doesn't explain why that gap exists, and whether women are being paid less for comparable roles in similar industries. For example, we haven't looked at whether women in our survey are underrepresented in high-paying industries such as finance or overrepresented in lower-paying ones such as state and local government. (In total, 13% of the respondents to our survey are female, 87% male.)
Our data does show that the pay gap can vary significantly by industry. In healthcare, for example, the gender pay gap shrinks to 1%. But healthcare is a relatively low-payer field -- IT staffers earn $5,000 less in total comp than the typical IT pro. In securities and banking, among the highest-paid industries, female IT staff earn almost 10% less ($92,000 compared with $102,000 for male staff), while female managers earn 20% less -- $109,000 compared with $137,000 for males IT managers.
>> A sizable minority of IT pros are embedded in business units.
One-third of the IT managers in our survey report to someone outside of the IT organization for at least half of their time, and one in five IT staffers do.
We asked this question for the first time this year because there's so much discussion about business units controlling more of the IT budget -- fueled by Gartner's prediction that the CMO will control more tech spending than the CIO by 2017.
When IT pros are embedded in a business unit, that function tends to consume most of their time. When we asked if staffers are embedded in a business unit, 19% say it applies to more than half their time, and 72% say it doesn't apply at all. Just 9% say it applies to less than half their time. The lesson for IT leaders is that IT pros embedded in marketing or manufacturing won't be able to keep a "day job" supporting ERP applications or balancing data center workloads.
With the answers to another question, we find that about one-third of IT staffers and half of managers have formal responsibilities outside of IT, even if they're still part of the IT organization. The most common areas are business development, R&D, non-IT support and marketing. Anecdotally, we see more IT pros are spending time with marketing and product development teams, as technology becomes a bigger part of these customer-facing disciplines.
In which roles outside of IT have the respondents to our survey held full-time positions? Marketing/sales (20% of staffers, 23% of managers), non-IT support (19%, 14%) and operations/supply chain/manufacturing (18%, 19%).
Don't fear the fact that IT roles and spending are drifting outside of the IT organization. It simply means the value of applied IT knowledge and skills is rising. The people who should be worried are the 46% of IT staffers and 30% of managers who say "spending time with peers in a business unit outside of IT" doesn't apply to their jobs at all.
>> Bay Area salaries are hot, even for the Bay Area.
The median base salary for IT staffers in the San Francisco area is $120,000 -- 38% higher than the median salary nationwide and 10% higher than in the No. 2 metro area, Washington, D.C. ($109,000). OK, it's no shocker that tech pros in the Bay Area are highly paid, but the gap between it and the No. 2 market is up to 10%, compared with 3% last year. Bay Area IT managers earn a median $140,000, 27% more than the national median and 4% more than area No. 2, New York.
The rising IT pay in the Bay Area appears to reinforce its place as the center of U.S. tech innovation. We're seeing a steady stream of big tech venture funding deals. We've seen companies such as Workday, ServiceNow, Salesforce.com, Google and Facebook become destination employers, while stalwarts such as Oracle and Apple still anchor the region. We've also seen established companies on the outskirts of the tech industry, the likes of GE and Ford, open offices in the valley to tap into its innovation ecosystem.
On the flip side, it will be interesting to see if more companies take the General Motors approach. As it sets up tech centers and hires thousands of IT pros in its shift away from outsourcing, GM has decided to eschew Silicon Valley for metro areas (Atlanta; Austin, Texas; and Phoenix among them) where the talent is more affordable and the competition for that talent is less fierce.
In terms of median IT manager pay, Atlanta ranks 16th, Austin 17th and Phoenix 19th among 20 metro areas covered in our survey. Detroit, where GM also is expanding and hiring, ranks 18th. Austin and Atlanta rank higher for staff salaries (eighth and 12th), but Austin's median pay is still $22,000 a year less than in the Bay Area. Railroad Union Pacific is another company opening a new office in Austin looking for talent.
. We've got a management crisis right now, and we've also got an engagement crisis. Could the two be linked? Tune in for the next installment of IT Life Radio, Wednesday May 20th at 3PM ET to find out.