IT workers hoping to improve their standard of living in 2012 will not likely find relief through annual salary raises.
The Computer Economics 2012 IT Salary Report finds that IT organizations are planning to hand out average raises of 2.8% this year, as shown in Figure 1. Even organizations at the 75th percentile are budgeting for only a 3.0% wage increase for employees. That lags well behind the 3.4% rise in the Consumer Price Index for the 12-month period through November 2011.
On a positive note, most IT workers will get some measure of increase: even organizations at the 25th percentile are increasing salaries for existing employees by 1.8%, which is an improvement over the no-raise policy that prevailed last year in the bottom quartile. Still, typical raises planned for 2012 are somewhat compressed across all quartiles and show little variation by job function or level.
The findings are based on a fourth-quarter survey of more than 130 U.S.-based IT organizations. Although there are modest improvements in the general employment picture, our research indicates hiring by IT organizations across all sectors will remain weak in 2012, especially among large organizations.
If the domestic economy continues to improve, we anticipate some upward pressure on wages, however. IT organizations will need to take steps to retain key workers due to the rise in voluntary turnover rates. Voluntary turnover rate for IT organizations, after dropping to nearly 2% in 2010, is on track to return to normal levels in 2012. Turnover rose to 4% to 2011, and we anticipate it returning to the 5% level, which was typical during the period prior to the 2008 recession. As such, IT organizations will face demands for higher pay from some workers.
In the full study, we project total salary (base pay plus incentive pay) for 65 IT job functions. The study estimates total salaries for 20 sectors and more than 400 metropolitan and nonmetropolitan areas. We publish salary tables in a searchable Excel workbook. The first worksheet provides salaries by metropolitan area and the second by sector.
This Research Byte is a short extract from the executive summary of the Computer Economics IT Salary Report 2012. Most of the executive summary is available for free download in PDF format along with a sample of the salary tables. The salary tables are in Excel format and are available at no charge for Computer Economics clients or may be purchased directly from our website (click for pricing).