Tech Pay Increases For IT Workers With Key Skills

A new report says demand is up for application development, networking, and messaging expertise. And outsourcing isn't living up to its promise.
Pay for IT professionals with key skills is on the rebound after several years of decline, according to a new study released Thursday by research firm Foote Partners.

The study, which examined IT salary data for about 45,000 IT workers from nearly 2,000 North American and European employers, showed that talent-retention fears, offshore outsourcing disappointments, and aggressive hiring by consulting firms is pushing up pay for several skills areas, including application development, networking, groupware, and messaging.

"Messaging was dead, who would've thought that would've popped back up," says David Foote, president and chief research officer of Foote Partners. The increased deployment of voice over IP, however, is driving demand for messaging expertise at many companies, he says.

"Some skills areas had been declining more than 11% over the last three years. Overall, there's still a 3% to 4% decline (in pay for IT skills overall), but you see key areas bucking this trend, which is a positive sign," he says.

Foote doesn't think the IT job market will recover to the intense level of pay and retention perks offered by employers during the late 1990s. But he says increased IT hiring, especially at consulting firms, as well as many employers' renewed desire "for good people to stick around," are resulting in "adjusted pay and rewards" for key talent.

Despite the recent trend among companies to outsource application development offshore, there's an increasing demand and need for domestic application developers, particularly those with specific industry and business experience, as well as those with rapid application development and extreme programming skills, he says. (Extreme programming is a development methodology that emphasizes simple software code and application design, and iterative testing during development.)

Some applications, such as CRM and others that are closely tied to customers, demand "fast development, fast changes," he says. Pay for application development and programming skills has increased about 4% in the past year--and pay specifically for rapid application development and extreme programming skills has jumped about 9% over the last six months, Foote says.

Also driving up pay for application development is the fact that many companies that sent development work offshore in recent years haven't realized the savings they expected. "Offshoring has gotten a black eye. Half the companies who did it didn't get the numbers they thought," he says.

Among the other hot talent areas: Pay for IT workers with networking skills increased 6% in the past year while pay for those with messaging and groupware skills increased 4.5%, Foote says.