News

Survey: IT Hiring and Pay Still Up, But Employers 'Cautious'

With the U.S. economy still circling and unemployment on the rise, it's a good time to be in IT -- relatively speaking.

• By Herb Torrens
• August 11, 2008

In a survey released last week, research firm Gartner found that 57.9 percent of U.S. IT organizations project an increase in staff for the coming fiscal year. However, that increase is down 8.4 percent from last year's survey. Moreover, organizations projecting a 10 percent or greater increase in headcount dropped by 3.6 percent.

Gartner had surveyed 285 IT firms about their future expectations, which was defined as the period starting in March 1, 2008 through February 28, 2009.

Gartner Vice President Lily Mok said that while hiring rates remained relatively consistent with last year, the survey shows employers are becoming more cautious when it comes to hiring.

"This year's data show a slight decline in hiring projections across different industries," Mok commented in an e-mail interview. "We believe companies are being conservative in their planning based on the current market conditions. Industries such as insurance, public and non-profit reported a lower than last year's headcount increase projection."

And while some IT organizations may not grow as fast in the months ahead, the good news, according to Mok, is that the IT industry is not seeing extreme measures, like hiring freezes, taking place -- at least not on a widespread basis.

Nationally, in a report released on Aug. 1, the U.S. Bureau of Labor Statistics pegged the unemployment rate at 5.7 percent, up a full point from the same period last year. But according to the survey, the current economic climate has yet to significantly affect overall IT pay rates.

Projected median pay bumps for most IT positions will be comparable with those in 2008, which was reported at about 3.6 percent. A conservative projection by Gartner for 2009 estimates a median increase of 3.5 percent for the next year, with an emphasis on the retention of "high performers."

Difficult-to-hire positions, such as database administrator, network engineer, enterprise architect, Web application programmer and project manager, reported receiving above-average pay increases during the last year. And 81 percent of IT organizations said they had or would be implementing an incentive or bonus package for high-value staff, according to the survey. These trendy variable-pay programs are a key component in managing compensation strategy for IT retention, according to Mok.

"As IT becomes more business oriented and is run like a business, those individuals that have IT skills plus business knowledge and experience -- or degrees -- will likely have the fast track into roles which often have executive level exposure," Mok said. "After all, IT organizations are looking at not only technical skills but, more importantly, business skills."

While 2008 will certainly not qualify as a banner year for U.S. business expansion, it's good to know that IT is still a good place to be in the employment food chain.

Gartner describes the scope of its annual IT Market Compensation Study here.