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With the coronavirus pandemic defining a year of turmoil and change, several factors are buffeting IT salaries. Even with business leaders asking more from IT personnel during this work-from-home (WFH) era, the slow-growth salary trend we have reported on in recent years is continuing.
As shown in Figure 1 from our full report, IT Salary Report 2021, we anticipate only modest upward pressure on IT wages. Pay rates for IT workers will rise about 2.3% at the median, lower than the 3% pace in the previous two years.
Moreover, few IT organizations are raising wages more than the median 2.3%. For companies that responded to our survey, even those at the 75th percentile are budgeting for only a 3% raise. That is not significantly higher than the median and a sign that upward wage pressure generally remains low.
Hiring plans are also modest, with 47% of companies planning to increase IT head count. The upward pressure on salaries is just not there. As always, some in-demand jobs will see much higher increases in 2021.
“It could be a lot worse,” said Tom Dunlap, director of research for Computer Economics, a service of Avasant Research, based in Los Angeles. “With the pandemic still raging, slow growth in IT salaries is certainly a lot better than widespread pay cuts or layoffs."
But our surveys find another factor moderating IT salaries this year. The work-from-home trend has given some workers the option of moving out of high-cost cities such as San Francisco and Seattle to places where the cost of living is more affordable. Some IT workers are choosing to make less in real dollars to live in places where their dollar will go farther.
But even though IT salaries are rising modestly, some IT workers can expect greater than usual increases. Those in certain positions are receiving much greater pay raises than the 2.3% average increase.
Salary increases that catch our eye include higher median pay for technical support analyst III and rises in all three help desk representative levels. We hypothesize that this is happening for several reasons, with the pandemic likely a significant factor here. At the same time, companies are also using a greater variety of business applications, which puts increasing demands on the help desk. Thirdly, the help desk position has been a challenging one to fill, especially in certain regions. We analyze these trends further in the full report.
The full report estimates 2021 salaries for 80 IT job functions in more than 400 U.S. metropolitan areas and 20 sectors. The report is based on our annual salary survey of IT organizations in the U.S., along with other sources of compensation data as well as regional and industry data from the U.S. Bureau of Labor Statistics. For trend information, we also use our annual IT Spending and Staffing Benchmarks study and data from our year-end Worldwide IT Spending and Staffing Outlook for 2021 study. A complete description of the methodology is provided at the end of this report.