The Average Tech Manager Makes $105,000, Our Salary Survey Finds. Have Tech Jobs Bounced Back?

Technology Staff Editor
Posted by in Technology

The typical U.S. business technology manager now makes $105,000 in salary and cash bonuses, the first time this professional has joined the six-figure club in the 10 years InformationWeek has done a salary survey. Median compensation for IT staffers is $78,000, with five job categories surpassing $90,000, our survey of more than 7,200 tech pros finds. Median base salaries--not just bonuses--are edging up for the first time in several years. But there are worrisome signs. Foremost among them is a dip in median pay for those age 25 and under--precisely the people the industry is working so hard to attract and keep. And the mostly upbeat salary numbers come against a backdrop of slow U.S. IT job growth in recent years. The country employs 3.49 million IT pros of all types, according to the Bureau of Labor Statistics--just 1% more people than in the heyday of 2001 and 5% more than in recession-racked 2004. So even as our salary survey paints an optimistic picture, the question is whether IT jobs will be a growth opportunity for more people or a well-paying niche for fewer, as jobs are automated or moved offshore. Life's not easy for IT pros, so don't drop your guard. Our advice from last year's survey--that U.S. business technology pros build their careers with offshore competition as their No. 1 rival--still holds. We've created a package of how-to career advice, recognizing that at every stage tech pros must manage their careers, probably more so than most other professions given the fast-moving nature of the technology they work with and the surge of offshore competition they face. Yet there's also a vibe in these numbers, and in the industry, that the "lucky to have a job" sentiment of a few years back has faded. People dare to ask for raises, to push for more exciting work, to consider more than job stability. Others will see dark clouds in these numbers, and they're right to be wary--we'll be discussing such issues all week at information, and we'd love to have you join us.
The big picture is this: After three years of nearly stagnant pay, base salaries are up. Bonuses also improved, particularly for managers. Previously, base salaries were in lockdown mode. In 2004, 2005, and 2006, the median base for staff and managers moved about 1% a year--a net decrease considering inflation. This year, the median base pay is up 6.6% for managers and 5.7% for staffers, well above inflation. When asked how big a raise they received, managers report a 4.2% base salary increase over the previous year, and a 5% increase in total compensation, on average. Two years ago, they reported raises a full percentage point lower: 3.2% raise in base, and 3.4% in total compensation. Staffers report a 3.6% total compensation increase this year; in 2005, they got an average 2.5% raise. Bonuses continue to be an important part of total compensation. As a percentage of median income, bonuses are holding steady at 8% of pay for managers. In the boom days early in the decade, a whopping 18% of managers' pay came from bonuses. For staffers, bonuses are 5% of pay. Survey respondents are feeling more confident about their jobs, and thus have higher expectations. Job stability and security are less a concern, doing innovative work is a bigger priority, and cold cash is a bigger deal than soft benefits. More than half of managers--52%--feel "strongly secure" about their jobs, up from 40% in the layoff-prone days of 2004. Just 9% feel insecure, down from 14%. As for staffers, 42% say they're strongly secure, up from 31% in 2004, while 13% feel insecure, down from 19%.
Last year, 58% of staffers cited job stability as one of the factors that matter most, more than any other factor. This year, just 33% cite it. Chew on that a moment: A full two-thirds of IT staffers don't include job stability at all among their most important factors. For managers, the shift is just as dramatic: from 49% last year to 25% this year. The wow factor is way up, too. This year, 28% of staff cite working with leading-edge tech as a "most important" factor in a job, up from 12% last year; 34% cite creating innovative IT solutions, up from 9% last year. More managers have caught the creative bug--40% cite creating innovative IT as a most important factor, up from 13% last year. It was almost an oddity a year ago for people to put a priority on leading-edge work.

Pay is rising in importance over soft benefits. Staffers call it a most important factor more often than any other--60% this year compared with 48% last year. Fifty-one percent of managers put a premium on pay, compared with 43% last year. In contrast, soft benefits plummeted in importance; vacation fell to 19% from 36%, flexible schedules to 27% from 47%. Among the most troubling findings in our survey is that median pay for staff age 25 and under fell, to $40,000 from $45,000 in 2006. For IT managers that age, median base salary fell to $44,000 from $49,000. The 25-and-under group is the only age category to see a decline in median comp. One year might be an anomaly, but this is the No. 1 place to watch. If businesses don't attract young people, they'll never create the high-skilled veterans they complain are scarce. Outsourcing and offshoring loom large. Just over half of IT pros say the trend has meant fewer jobs and lower morale. The sunny-side view has always been that outsourcing creates opportunities to do more innovative work as menial tasks get moved out, but most tech pros aren't buying it. Not quite one-quarter agree with that premise, while 21% say outsourcing and offshoring have led to salary reductions. Tech pros aren't sure what to make of the future of their profes-sion. Only 39% of staffers think the tech path is as promising as it was five years ago, while 51% of managers consider it as promising. There's a gulf between the highest-paid job categories and the lowest. Staffers doing system integration, data mining, infrastructure, and ERP jobs earn median compensation above $90,000. Help desk ($52,000 median), Web design ($65,000), and general IT ($66,000) jobs pay far less and show little growth.
Money matters. After several years of lukewarm raises, IT pros are ready for more scratch. The No. 1 reason people look for a new job--cited by seven out of 10 of the more than 3,000 people looking for jobs--is higher pay. Other things matter--interesting work, quality management, fulfillment, responsibility--but managers would be smart to make sure the pay of their A-list team is in line with the market. More specialities are generating top dollar. Total pay for five skill categories among staff hits $90,000 or more; only one category hit that threshold last year and none in 2005. This survey doesn't tell us what the future holds for U.S. business technology jobs. But this snapshot, in early 2007, shows a profession that has shaken off a fierce downturn. IT is unquestionably a well-paying field. Can it also grow and expand, as well as nurture its next generation? Or will it move toward a high-paying niche? The stats don't tell us.


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