IT Salary Survey 2014: Benchmark Your Pay

Get the complete picture on IT staff and management salaries based on our exclusive survey of 11,662 US IT pros. Is your compensation hot or not?

Chris Murphy, Editor, InformationWeek

May 19, 2014

11 Min Read

7 Super Certifications For IT Pros

7 Super Certifications For IT Pros

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When it comes to IT salaries, tech pros know that boring isn't all bad. In our survey, IT staffers report a 1.6% median total compensation rise, and managers report a 2.4% boost. While those raises aren't busting income tax brackets, a raise sure beats the pay freezes and cuts of 2010. That year, 55% of IT pros reported a pay freeze or cut; this year, just 15%.

Median total compensation hit $92,000 for staffers and $120,000 for managers, the survey of 11,662 US IT pros finds. Base salaries are $88,000 for staffers and $112,000 for managers.

Deep tech knowledge is in demand. Five IT staff titles command median salaries of $100,000 or more: architect (the highest, at $120,000), systems architect, software engineer, project leader, and systems programmer. The "general IT" title earns median base pay of $62,000; help desk, $48,000. Staff roles demanding top pay include those related to cloud computing, application integration, data integration and warehousing, and ERP. The list is similar for IT managers, with security and app development also high on that pay scale.

[ See InformationWeek's complete IT Salary Survey coverage including our flash poll on salary satisfaction. ]

At some companies, the IT skills in demand are changing because IT's role there is changing. Customer-facing apps put a premium not just on application development skills, but also on the people who build the data architectures and infrastructure platforms that feed those apps and deliver a snappy response.

Capital One, for example, is going from 70% outsourced IT to about 70% insourced. Competing in financial services, says CIO Rob Alexander, will increasingly mean delivering new "software-enabled customer experiences" -- and that takes operating like a software company, turning out new app features every few months. To do that, Capital One is hiring software and infrastructure engineers that in the past it got through outsourcers.

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"If you wind the clock back several years, we didn't consider building software to be an essential capability of competing in our business," Alexander says. "We needed to be really good at integrating, customizing, managing third parties -- those things were really important." Now Capital One wants to go toe to toe against top tech vendors in recruiting development and engineering talent.

What kind of IT salary market awaits hiring managers like Alexander? What factors beyond pay concern IT pros most? What's their long-term outlook on the IT career? Here are some key findings from our 2014 Salary Survey.

Employee Satisfaction: Pay Not As Big A Priority

We listed 24 job-satisfaction drivers and asked which seven are most important. Staffers cite base pay most often (48%); managers cite having their opinion and knowledge valued (46%).

As recently as 2009, 60% of IT staffers listed base pay among their most important factors. The drop in importance shows employees are more confident and comfortable that they'll have a steady paycheck, as the economy and employment picture stabilize.

The next most important factors to staffers are job stability, benefits, flexible work schedule, and vacation time. The least important factors are company reputation, involvement in setting company goals, bonus opportunity, and effectiveness of immediate supervisor.

In the middle are factors that relate to having an impact on the company: 22% of staffers and 34% of managers put a premium on doing work that's important to the company's success.

Whirlpool CIO Michael Heim makes the case, however, that IT morale can sink if tech pros lose that sense of purpose. Heim's team has been working on a Google Apps software implementation to replace a dated version of Lotus Notes. While the technology is far from bleeding edge, seeing how much the new Google Apps capabilities can improve collaboration is giving the IT team a lift. "You just don't do that many projects in this business that touch everybody in the company," Heim notes.

IT pros have stayed remarkably consistent in their satisfaction with pay and their jobs overall in recent years: Around two-thirds say they're satisfied or very satisfied, a bit less than one-fourth are neutral, and a bit more than 10% are dissatisfied or very dissatisfied.

Just one in 10 IT pros feels insecure at work, with the rest saying they're secure or somewhat secure.

But IT hiring managers can't get complacent about compensation and must make sure they're paying market rates. The No. 1 reason to look for

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another job, cited by seven out of 10 IT pros in our survey, is higher pay. The next closest factor, more interesting work, was cited by less than half.

Tech Career Prospects And Outsourcing

For staffers, 48% think an IT career is more promising than it was five years ago, while 55% of managers think so. Both of those percentages represent a 15-point increase from a recent low point in 2011.

Concerns about outsourcing are always close to the surface in any discussion of US IT careers. Just over half of the pros in our survey say their companies are outsourcing some IT jobs; 42% say they're not. In 2010, 64% of IT staffers blamed outsourcing for fewer IT jobs, a percentage that dips to 56% this year. Our 2014 survey shows similar small declines in several other negative factors related to outsourcing, but outsourcing continues to be seen as negative to IT careers and salaries. Few see much upside -- just 20% of managers and 13% of staffers say it has led to their getting more responsibilities. But most haven't felt outsourcing's downside personally: Two-thirds say it has had no impact on their career paths.

Our survey shows no big change in the number of companies doing outsourcing -- 53% this year compared with 50% in 2010. But anecdotally, we have seen a number of high-profile examples of big companies bringing some outsourced IT work back in-house, as they see competitive advantage from having employees who know their businesses very well working to innovate with new technologies.

We mentioned Capital One earlier as an example of insourcing, but General Motors is conducting probably the largest and most sweeping such effort today. CIO Randy Mott is driving a switch to 90% insourced IT from 90% outsourced, hiring thousands of IT pros in the Detroit area as well as in new development centers near Atlanta; Austin, Texas; and Phoenix.

If IT employees understand their industry and company well, and internal IT can deliver projects consistently, Mott thinks that success will change the relationship IT has with business units, as they work together on critical projects.

"You really want to change 'the ask' -- you want them asking for things that are bigger drivers to helping their business and driving business results," Mott said at this year's InformationWeek Conference.

Major Pay Variables: Industry, Location, Gender

Male IT staffers make about 16% more in median total compensation than females, and for managers the gap is about 11%. That gap is about the same as last year for staffers and managers, and up three points from 2012.

Huge pay differences exist depending on the industry in which IT pros work. For managers, the top industries in terms of total compensation are Wall Street, biotech, energy, consumer goods, financial services, IT and electronics, and consulting, all topping $140,000 in median total compensation. IT managers in education, nonprofits, and state and local government make the least, at $94,000 median pay or less.

For IT staffers, Wall Street, IT and elec¬tronics, biotech, and energy are the top industries, all earning $107,000 or more in median total compensation. The lowest-¬paying industries for staffers are the same as for managers, where they earn $72,000 or less. A typical Wall Street IT staffer makes nearly twice what an IT staffer in K-12 education does.

Geography also influences salaries, of course, with companies on the West and East coasts paying the most. Six metro areas offer median base IT staff salaries of $100,000 or more: San Francisco; Washington, D.C.; Boston; Baltimore; New York; and San Diego (from greatest to least). For managers, companies in those six cities, but minus Baltimore and plus Los Angeles, pay the highest salaries: $130,000-plus.

IT leaders at companies outside the San Francisco Bay Area continue to debate whether they need to set up shop in that high-salary market to get an innovation injection. GM in its hiring blitz opted not to, thinking that its four dispersed centers let it reach most of the country's tech talent

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while keeping its costs down. GE, on the other hand, has hired more than 600 tech pros in its Silicon Valley office, in order not only to tap certain tech skills, but also to learn the tactics and mindset of fast-paced software development and innovation. "It was as much to change the culture of GE as it was to get the talent," says Jim Fowler, CIO of GE Power & Water.

Skill-Building: Cutting-Edge Tech, Training Neglected

IT pros must keep their skills up to date, right? If doing so means working on cutting-edge tech projects or taking training, too many IT pros don't consider keeping up to date to be a high priority.

Just one in five IT pros considers "ability to work with leading-edge technology" among the top factors that matter at work. Just 23% of staffers and a mere 15% of managers put skill development/education/training on that priority list. (In another question, about half of both staffers and managers acknowledge that "experimenting with cutting-edge technology" is critical to doing their jobs, however.)

Companies do put people through a lot of training. Around half of all IT pros in our survey say they attended company-paid training in the past year, and 17% of staffers and 18% of managers attended company-paid certification. Twenty percent of all IT pros paid for training or certification out of their pockets last year, shelling out a median $1,000. Just 33% of staffers and 30% of managers received no additional training or certification.

Which kind of training is most valued? We asked people to pick two types among a list of nine. For staffers, it's overwhelmingly technology-specific training (73%), followed by certification (45%) and project management (16%). For managers, it's also tech training (54%) and certification (29%), but other areas -- business skills, people management, project management -- were each cited by about one-fifth of manager survey respondents.

Role Of IT

There's a notion that business units are controlling more IT spending than they used to, and we're seeing some evidence of that trend in our survey -- who pays IT pros, where they sit, and especially where they spend their time.

Asked if their salary is allocated to a business unit, 72% of IT staffers in our survey say no. But 21% say half or more of their salary is allocated to a business unit, while 7% say less than half is. The breakdown is nearly identical when we asked IT staffers whether they're physically located in a business unit outside of the IT organization and whether they report to a manager outside of IT. The conclusion: A sizable minority of IT pros have formally budgeted, embedded roles inside business units.

The survey data also shows IT staffers spending a lot of time with business unit peers: 30% say they spend at least half their time with business unit peers, 27% say less than half their time, while 43% say other business units don't apply to their jobs. That might be the most surprising of the stats, actually -- two out of every five IT staffers say they have jobs that don't involve business unit interaction?

The IT managers in our survey spend much more time with business units. Forty percent say they spend at least half their time with business unit peers versus about one-fourth saying such work doesn't apply to their jobs.

The critical business and technical skills IT pros think they need haven't changed in years. For managers, most often cited is aligning business and technology goals (84%), followed by collaborating with colleagues, building vendor relationships, managing vendors, and analyzing data. Lower on their list, cited by 55% of managers, is interacting with customers. Fowler, the GE Power & Water CIO, sees this role of customer-facing IT growing, as IT leaders get called in to help sell company products. In GE's case, the product can be highly technical equipment ranging from power turbines to MRI scanners to jet engines, all of which include data-sharing capabilities along with the operational engineering. As more information technology gets embedded into products, customers are asking hard questions about data security, integration, and analysis -- questions that take an IT pro to answer. Says Fowler: "We're finding that the CIO of our customer is showing up in these meetings."

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About the Author(s)

Chris Murphy

Editor, InformationWeek

Chris Murphy is editor of InformationWeek and co-chair of the InformationWeek Conference. He has been covering technology leadership and CIO strategy issues for InformationWeek since 1999. Before that, he was editor of the Budapest Business Journal, a business newspaper in Hungary; and a daily newspaper reporter in Michigan, where he covered everything from crime to the car industry. Murphy studied economics and journalism at Michigan State University, has an M.B.A. from the University of Virginia, and has passed the Chartered Financial Analyst (CFA) exams.

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