IT Pros Feel Salary Crunch

IT hiring improves, but not enough to consider a recovery as overall compensation for IT professionals remained stagnant since January 2008, notes Janco.

Insurance Networking News, October 20, 2011

Pat Speer

It’s common knowledge that IT executive salaries tend to run in tandem with economic trends. During the last four years, as economic conditions remain relatively flat, so too, does the salary growth potential for senior IT professionals.

“Many most likely feel lucky to have a job at all,” notes Janco Associates in its 2011 “Mid-Year IT Salary Survey” report.

Data collected from Janco’s compensation study was divided into two categories: Large companies (gross revenues are equal to or greater than $500 million) and mid-sized companies (gross revenues are less than $500 million). The survey size and number of participants at large companies was 281 (companies) with 24,782 data points; at mid-sized companies (703) the number of data points collected was 32, 142.

Not surprising, Janco’s report holds that the salary for most senior IT positions remained flat between June 2010 and June 2011. CIOs for large companies saw a 2-percent increase in total compensation, compared with the same period a year ago. Five of the top CIO direct reports experienced salary reductions.

CIOs at medium-sized companies also received a modest compensation reduction, yet many of their direct reports received a modest increase. Receiving the largest raises were VPs of technical services and VP chief security officer, according to the study.

The survey offers a subset of data on IT employment in health care, and finance and insurance sectors. The finance and insurance sector saw a 0.43-percent drop in hiring year over year, but employment in health care IT and spending is on the upswing, predicted to reach $40 billion by the end of this year, notes the report. As expected, much of that growth will come from spending on electronic health record (EHR) systems, mobile health applications and efforts to comply with new government standards. Boosted by increased spending on health care software, which is needed for the rollout of EHR systems, the U.S. health care IT market is expected to grow at a rate of about 24 percent per year from 2012 to 2014, the study said. Spending on health care software rose 20.5 percent in the past year, from $6.8 billion in 2010 to a projected $8.2 billion this year.

By title and function, C-level leadership takes the top spot, followed by positions involved with IT planning. Janco provides the following as a sampling of several IT job titles and the corresponding average salaries from the survey:

• CIO - June 2011, Total Compensation: $175,363, June 2010 Total Compensation: $171,839 Change: +2.05 percent

• VP security (chief security officer) - June 2011 Total Compensation: $146,512, June 2010 Total Compensation: $149,163 Change: -1.78 percent

• VP information services - June 2011 Total Compensation: $134,338, June 2010 Total Compensation: $137,513 Change: -2.31 percent

• Director IT planning - June 2011 Total: $126,309 June 2010 Total Compensation: $125,705 Change: +0.48 percent

• Director, systems programming - June 2011 Total Compensation: $143,152 June 2010 Total: $144,157 Change: -0.70 percent

Janco provided other more generic observations for the 2011 mid-year IT compensation study:

• Overall IT compensation has remained flat for the last 12 months. The total mean compensation for all IT professionals has decreased modestly by 0.39 percent to $78,078 from $77,773 at the beginning of 2011. This puts overall compensation back at the levels they were at in January 2008. All levels of IT professionals continue to feel a salary crunch.

• Mid-sized enterprises are now starting to hire programmers, mid-level infrastructure managers and supervisors as well as staff workers with salaries in this sector increasing slightly. Mean compensation is up less than 1 percent since June of 2010.

• IT hiring is up. Since January of 2011 55,500 IT jobs have been added in the United States according to the Bureau of Labor Statistics (BLS)

• On shore outsourcing has peaked and companies are looking to bring IT operations back into their direct control and reduce operating costs.

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