Human Resources: Rapid Rise Of I.T. Pay Tapers Off

Pay for information technology (IT) jobs continues to rise - just not at the meteoric rates seen during the recent technology boom, according to a new survey from human resource consultants William M. Mercer, Incorporated. During the past year, median total cash compensation (base pay plus short-term incentive) for some of the most common jobs in IT rose, at most, 7% or 8%. However, pay for most jobs rose 5% or less, keeping overall increases in line with national norms for all jobs across all industries.

Mercer´s 2001 Information Technology Compensation Survey gathered data from nearly 1,100 mid-sized and large corporations nationwide on base pay and short-term incentive levels for more than 220 IT jobs, as well as overall pay practices affecting IT employees. The survey data represent pay levels for more than 230,000 IT employees across the US. The survey respondents, which represent a variety of industries, have median revenues of $1.0 billion and median employment of 2,839 employees.

Pay increases
For 20 of the most highly populated jobs in this year´s survey, seven saw increases in median total cash compensation over the past year of more than 5%, eight saw increases of 3% to 5%, and five saw increases of less than 3%. (See attached table.) The largest increases were 8.5% for intermediate software systems engineer, 7.1% for senior software systems engineer, and 6.8% for senior database analyst/programmer.

The job family with the highest pay increases across the board was software systems engineer. The five jobs in this family (associate, intermediate, senior, lead, and staff specialist) had increases in median total cash compensation of 5.2% to 8.5% this past year. Another strong showing was applications systems analysis and programming, with eight jobs showing increases in the range of 3.4% to 5.8%.

"It has been a challenge this past year to project trends in IT pay," says David Van De Voort, leader of Mercer´s Global IT Workforce Effectiveness team. "Weakness in the general economy and the technology sector has removed the extraordinary pressure on IT staff retention, but there still are critical shortages of IT talent."

Staffing issues
Nearly two-thirds of the survey respondents (64%) outsource or contract at least a portion of their computer services and support. Of these, 4% outsource more than 50% of their IT staff, 14% outsource 25%-50%, and 81% outsource less than 25%. The IT functions most commonly outsourced include applications programming analysis (64% outsource this function), PC/desktop support (37%), software systems engineering (31%), help desk (28%), network support (28%), and data center operations (17%).

Contract staff are most frequently used in the areas of applications systems analysis and programming and applications programming. The contract rate as a percentage of the in-house pay rate is 191% for the former and 182% for the latter.

Most common jobs in corporate IT
More IT professionals are employed in applications systems analysis and programming than in any other area of corporate IT. Mercer´s 2001 survey reports pay data for more than 230,000 IT professionals nationwide. Of these, more than 58,000 are in five jobs related to applications systems analysis and programming (associate, intermediate, senior, lead, and staff specialist), including more than 20,000 alone with the title of senior applications systems analyst/programmer. Other common functions include business systems analysis (more than 17,000 IT professionals in the same five job levels) and software systems engineering (nearly 12,000 IT professionals in five jobs).

"Employers must be careful not to squander the investments they have made in IT staffing over the last few years," Mr. Van De Voort cautions. "Organizations that sustain their efforts to be an ´employer of choice´ for IT professionals, even when business results weaken, will be rewarded with greater loyalty and productivity when the economy strengthens."

2001 Pay for 20 Common Jobs in Corporate IT

Job	2001 Median Total Cash Compensation*	% Change from 2000
Chief Corporate Information Officer (CIO)	$233,700	6.2%
Corporate Information Systems Executive	$162,700	2.5%
Applications Systems Analysis and Programming Manager	$95,700	3.8%
Database Manager/Administrator	$92,300	4.8%
Information Systems Operations Manager (without Operations Systems Programming)	$89,100	2.3%
Data Security Administration Manager	$87,500	4.8%
Senior Database Analyst/Programmer	$78,400	6.8%
PC Support Manager	$76,000	5.5%
Computer Operations Manager	$72,800	3.1%
Senior Network Planning Analyst	$70,400	4.1%
Senior Software Systems Engineer	$70,200	7.1%
Help Desk Manager	$67,600	3.9%
Senior Applications Systems Analyst/Programmer	$65,900	4.6%
Senior Applications Systems Analyst	$64,700	5.4%
Senior Business Systems Analyst	$61,000	3.9%
Intermediate Software Systems Engineer	$57,900	8.5%
Intermediate LAN Administrator	$50,000	0.6%
Intermediate Applications Programmer	$48,900	1.0%
Information Systems Training Specialist	$45,900	2.3%
Senior Computer Operator	$36,900	5.2%

* Median total cash compensation equals base pay plus annual incentive.
* Source: William M. Mercer, Incorporated 2001 Information Technology Compensation Survey

The 2001 Information Technology Compensation Survey is one of 450 surveys conducted annually by Mercer in the US and around the world on topics related to compensation, benefits, and expatriate information. The survey can be purchased online at www.imercer.com or by calling 800 333 3070. The cost is $1,000 for survey participants and $3,000 for companies that did not participate.