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IT Resources, Rewards Down; Stress Up

According to one survey, total cash compensation for CIOs has dropped compared with 2000.

InformationWeek Staff

October 10, 2001

3 Min Read

Today's workplace dynamic is as tough on IT folks as it is on any other employees. Two recent reports confirm that IT workers face some tough realities: They have to do more with fewer resources and rewards.

The 2001 Information Technology Association of America Compensation Survey, conducted by human-resources consultants William M. Mercer Inc., shows that median total cash compensation (base salary plus annual incentive) declined in 2001 for a number of IT positions. The report, which contains information from 69 companies, attributes that decline to smaller annual incentives, not a dramatic drop in base pay. CIOs' base pay grew during the past year, from $159,800 to $171,300. But total cash compensation dropped from $203,500 last year to $192,100 this year.

Total cash compensation isn't the only thing that's suffering. IT departments are being forced to make do with smaller staffs and budgets. According to Meta Group's Worldwide IT Trends & Benchmark Report 2002, 40% of companies are cutting IT budgets by more than 20%, which will lead to a 53% cut in staff. The report surveyed more than 1,100 companies in about 25 industry sectors worldwide.

Fewer IT workers and fewer resources are likely to lead to more burnout if companies aren't careful, Meta Group analyst Maria Schaefer says. "Some CIOs I've talked to are already in a panic because they're being asked to maintain and increase service levels," she says.

To ward off IT burnout, Schaefer has several recommendations:

• Find ways to streamline and automate. "That's easier to do on the legacy side and harder to do for a distributed environment," she says.

• Be flexible with deadlines when possible. Determine which projects have drop-dead deadlines and which can be delayed if employees are reaching the breaking point. Have rewards in place for meeting deadlines--preferably time off. "Time has been one of the most significant incentives for IT workers," Schaefer says.

• Find ways to encourage a stronger environment of teamwork and collaboration, whether through technology tools or cultural change.

• Outsource tasks with lower value-add, such as desktop support, so IT workers can focus their energy on more rewarding projects with high return on investment.

Many companies will have to rethink their approaches on that last point. The Meta Group report showed that U.S. companies' lowest priority is outsourcing and business-process reengineering. About 10.5% of IT budgets are spent on outsourcing (vs. 12.5% last year). When companies do outsource, 14.8% is spent on data centers, 45.1% on application development, and 13.8% on help desks.

There are at least two bright spots in the reports, though. Harris Miller, Information Technology Association of America president, says he was surprised by salaries for LAN administrators. In April, the association workforce report indicated there wouldn't be high demand for network administrators, so Miller expected salaries to drop slightly. Instead, they increased: from $49,500 to $52,100 for base pay and from $51,300 to $54,200 for total compensation.

That probably won't include many system analysts and designers, which, according to the Meta report, are the most difficult positions to fill worldwide.

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