- Major Studies
- Market Assessments
(Irvine, Calif.) -- Computer Economics projects that median base pay for IT managers and staff will rise slightly in 2009, driven mostly by annual pay raises that IT organizations give existing employees to reward longevity and performance.
While rising unemployment is causing anxiety throughout many IT organizations, particularly as they view layoffs among leading technology firms such as IBM, Sun, Dell, Oracle, and even Microsoft, IT workers could come out ahead in 2009 if inflation remains in flat or negative territory throughout the year, as many predict.
The Computer Economics 2009 IT Salary Report projects that median base pay for all IT employees will rise about 2% in 2009 over 2008. Base pay levels for IT executives, directors, managers, and developers will rise from 2% to 3% this year, while median base wages for other IT workers will rise from by 1.5% to 2.5%, the Irvine, Calif.-based IT research firm forecasts.
A Computer Economics survey conducted in the fourth quarter of 2008 found that the median pay raise planned for U.S. IT workers this year was 3.0%. A deterioration of the employment outlook for IT workers since then, however, is likely to dampen wage growth.
“With potential deflation, a 3.0% pay raise would represent growth in real terms. That is one reason why our projected wage growth for most IT positions is somewhat lower than the planned pay raises,” said John Longwell, the firms’ director of research. “There are also signs that layoffs are spreading to an increasing number of IT organizations. IT organizations should be able to bring on new employees at rates below what they paying existing employees with similar skill sets.”
The above-average wage growth for developers indicates that application programmers, architects, database programmers, and certain other skill sets remain in short supply. Despite a slowdown in capital spending, organizations are continuing to renew legacy applications and improve e-commerce and other customer-facing systems that provide competitive advantage and lower cost of sales.
The higher-than-average increases for executives, directors, and managers may be compensating for reductions in incentive pay tied to corporate profits. Incentive pay is less sticky and more likely to adjust to economic conditions than base wages. “As incentive pay for IT executives and managers declines, organizations may be increasing base pay for these positions,” Longwell said.
Longwell stressed that, in this unpredictable environment, forecasts are subject to revision. The longer this recession persists and the deeper it goes, the more rising unemployment, bankruptcies, and deflation will conspire to put downward pressure on IT salaries, as it will for salaries in other occupational groups.
Contact us for more information on this subject or to arrange an interview.