News

IT Hiring and Salaries Down, but Not Out

Despite gloomy economic projections, IT professionals may fare better than people working in other job sectors this year, according to Computer Economics report.

• By Herb Torrens
• February 04, 2009

The report predicts that the median salary for all IT workers will rise by 2.0 percent in 2009, based on Computer Economics' projections. It's actually a point decrease from last year's assessment. Computer Economics had pegged overall pay raises for IT personnel at 3.0 percent in its survey conducted in October of 2008.

Economic factors have dampened this year's forecast, according to John Longwell, research director at Computer Economics.

"The three percent figure given to us by employers [in 2008] was optimistic given what has happened in the market," Longwell said in a telephone interview. "Cost-of-living increases generally track with inflation, and in the fourth quarter, we actually had deflation."

Pay raises for IT professionals have been dropping in recent years. They decreased from 3.9 percent in 2007 to 3.5 percent in 2008, according to the report.

IT wage increases have been relatively flat since the dot-com crash. Those wages had just started to recover in 2004, the report explains.

The 2009 survey ranked "developers" at the high end of the salary increase spectrum, projecting a 3.6 percent hike in wages. "Managers" and "executive/directors" were in second place, with the study predicting 3.5 percent and 3.4 percent raises in those categories, respectively.

"Developers, and that's a broad category, generally have the skill sets that are hot and in demand," Longwell said.

Longwell noted that above-average raises for managers and directors may have been initiated by companies to compensate valued employees who may not benefit from incentives during economic downturns.

"Incentive pay tends to decline with profits," Longwell said. "Other variable compensation, such as healthcare benefits and pension plans, also decline with revenue. It's sort of a natural adjustment in such economic times."

Given the layoffs and cutbacks by some software giants, the increased labor pool of IT professionals represents a boon for other prospective employers. Still, it may not translate to increased salaries.

"An increase in the labor pool always has an influence on salaries, and in today's market, people looking for jobs might not be offered a position at the median rate," Longwell said. "On the other hand, those companies looking to maintain and expand legacy IT programs will have an opportunity to acquire high-level skill sets at a highly competitive rate."

Recent layoffs at Microsoft, IBM, Yahoo, Google and others have sparked anxiety in the IT community, according to a statement from Computer Economics. However, given the state of the general economy, IT personnel are in a better position than most in the workforce.

"We were a bit surprised by the strength and resolve shown by many of the participant organizations in the survey," Longwell said. "Given this economic climate, we thought many more would be planning layoffs and cutbacks in programs. The response was much more positive than we anticipated, which indicates to me that IT workers are more insulated for this recession than other groups."

Computer Economics' "2009 IT Salary Report" can be accessed here.