Your Incredibly Shrinking Paycheck - InformationWeek

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IT Leadership // CIO Insights & Innovation
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11/10/2008
04:19 PM
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Your Incredibly Shrinking Paycheck

Your 401(k) account isn't the only thing that looks pretty shriveled up these days. If you're a tech professional, your paycheck might've shrunk recently, too, says a new report.

Your 401(k) account isn't the only thing that looks pretty shriveled up these days. If you're a tech professional, your paycheck might've shrunk recently, too, says a new report.Hourly tech wages in the third quarter of 2008 slumped to the lowest levels since early 2006, according to findings of a new quarterly survey by IT staffing and outsourcing firm, Yoh.

By the end of the last quarter, average hourly tech wages dropped 6% compared with the same period last year.

So, what does this erosion mean to you if you happen to be, say, a tech consultant? Well, it means that when you looked at your paycheck in late September, you could have very well thought you were looking at your pay stub from January 2006. Déjà vu?

At the end of September, average tech wages fell to $29.81 per hour, about a dime more than the average hourly wage of $29.70 that techies were earning during the first weeks of January 2006, says Yoh.

Yoh says the third quarter didn't start out so bad. In the first few weeks of the quarter, pay was actually up nearly 2% over the same period in 2007. In fact, the average hourly tech wage hit a year-high of $32.21 in July.

But with the autumn collapse of the financial markets -- and companies in related sectors tightening up budgets and delaying projects -- demand for tech talent slipped, pushing average pay down 6.21%.

While the Yoh findings might raise a few eyebrows, it's not all that surprising, really, is it? In fact, the findings sync up with pay trends identified earlier this year by InformationWeek, months before Wall Street's dramatic meltdown this fall.

In InformationWeek's 2008 U.S. IT salary survey of more than 9,600 tech pros this spring, we found that median pay dropped about $1,000 for staffers and managers alike in the previous 12 months. That was the first time IT pay dipped since the dot-com bubble popped.

While the economy had been getting soft during the time frame covered by the InformationWeek 2008 salary survey, other factors contributing to that drop in pay were thought to be more complex -- including the long-term impact of off-shoring, retiring baby boomers being replaced with less expensive younger workers, and even an industry-wide mismatch of job titles and skills.

It's also worth noting that a newly released survey by the Society For Information Management of CIOs and other tech executives at 230 companies found that most expect tech salaries to rise in 2009. However, that survey also was conducted in June, months before Wall Street's meltdown.

What do you expect your paycheck to look like next year?

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