Blog

Tiny IT Pay Hikes Don’t Necessarily Mean that Happy Days are Here Again

Ara Trembly
Insurance Experts' Forum, February 4, 2010

Maybe it’s the horrible economy that seems to never end. Maybe it’s the unemployment figures that continue to climb. Maybe it’s just the bleak mid-winter skies that bring on the “will-summer-never-come?” blues. Whatever it is, I am not moved to dance for joy at the latest IT budget revelations, even though they appear to bring good news. 

Despite budget cutting and layoffs across most IT organizations over the last two years, Computer Economics is reporting that “the picture is brightening for IT workers.” The researcher’s "Computer Economics 2010 IT Salary Report" has found that the IT organizations are budgeting to give the typical IT worker a 1.8% boost in pay.

Obviously, the increase is almost infinitesimal, but CE points to this as a sign that, despite the economy being so weak, “IT executives are responding to the need to retain their best workers and boost damaged morale.” Another recent report from CE shows that IT organizations plan to increase operational budgets by a median 2% in 2010 and that more than one-third are planning increase staff, restoring some of the positions shed over the past two years.

Sounds great, right? But some questions beg to be asked. First, how many current H1B workers are among those who will receive wage increases? Let’s remember that this is a group of imported workers who have been brought here and paid less than the going rate for people in their positions—while also displacing American workers who might have assumed those positions. Assuming they are among those who get these “shoots of hope” pay increases, would the 1.8% bring them up to snuff? Somehow, I doubt it. Yet it might, as CE suggests, help boost their damaged morale, or that of non-H1B workers.

Then we must ask: How much of the planned increase in IT staffing will be due to new workers coming in under H1B? We already know that U.S. companies are seeking to bring such workers here in at least the same volume as last year, and we know that some of our insurance and financial technology services and consulting leaders are among those clamoring for this cheap labor. One would have to believe that H1B workers would make up some if not all of the projected staff increases.

“We see this as another sign that IT jobs and budgets are recovering this year,” said John Longwell, VP of research for Computer Economics, Irvine, Calif. Obviously that is true, but the tragic aftershock of this revelation is that the U.S.-born IT worker will likely see no light at the end of this tunnel. CE provides another twist, noting, “That most IT workers will receive raises does not mean median total compensation will rise at the same rate, or at all. With the persistent unemployment, organizations will be able to hire new workers at rates lower than those who were laid off during the recession. This should place downward pressure on U.S. national median IT salary levels over the coming months.”

Thus, what purports to be good news is in fact a statistical proof of an ongoing problem in the U.S.—our failure to look out for the welfare of our own citizens due to a pathological obsession with the bottom line. Of course the bottom line is important, but how many of our own people will have to suffer before we say that enough is enough?

Ara C. Trembly (www.aratremblytechnology.com) is the founder of Ara Trembly, The Tech Consultant, and a longtime observer of technology in insurance and financial services.

Readers are encouraged to respond to Ara using the “Add Your Comments” box below. He can also be reached at ara@aratremblytechnology.com.

The opinions posted in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

3 Reasons DevOps Matters

Every insurer needs to compete on products and information turned around in light-speed fashion.

Coordinate Coverages to Manage Social Media Exposures

The bottom line is that no one policy will cover all the exposures in the social media realm.

The Internet of Things: Helping Insurers Make Better-Informed Decisions about Risk

The IoT is a major game changer for the insurance industry, and will likely affect every part of the insurance value chain. After all, insurance is data-driven, and that’s exactly what the IoT can deliver—relevant, actionable, real-time data that can provide an accurate picture of what is being—or may be—insured.

Software-Defined Everything

What does it take to virtualize all the key components in your data center?

On Thanking the Regulator … Really

The Financial Conduct Authority is demanding higher standards of consumer protection from insurers, which could lead to greater customer engagement and understanding.

Competing with the Coasts for Tech Talent

Are heartland-based insurers at a recruiting disadvantage for tech skills?

Advertisement

Advertisement