SAN FRANCISCO – Based on the results of Janco Associates’ January 2009 IT Salary Survey, prospects look grim for IT professionals.
“The job market for IT professionals is one of the worst that I have seen since the late 1970s,” said Victor Janulaitis, CEO of Janco Associates. “There is a surplus of IT talent and companies are in a cost cutting mode. The dot com bubble was a cake walk compared to this job market.”
According to a statement from the consulting firm, factors including the recent worldwide economic downturn, company closures, layoffs, cost cutting, outsourcing, and retirees who have had to return to the job market because of the lost value of their investment portfolios have contributed to the surplus of IT talent.
Many companies have instituted hiring and spending freezes. This, augmented by extensive layoffs, outsourcing, bonus reductions, and the elimination of IT contractors, has decreased the overall demand for IT professionals while in some cases lowering wages or even eliminating higher-priced positions altogether.
The report also found that companies have reduced company benefits, and requiring IT professionals to pay a greater portion of the cost of benefits such as health care.
Flexible hours and work schedules are now not as available as they were before the recent economic conditions changed.
On average, IT professionals are receiving less compensation as a result of outsourcing, lower bonuses, and recent layoffs. The report found that the mean compensation for Chief Information Officers (CIOs) in large enterprises is now $168,839 (a 6.11 per cent decrease), and $163,211 (a 4.97 per cent decrease) in mid-sized enterprises. Much of this is due to the loss or reduction of bonuses and fringe benefits.
The mean compensation, including bonuses, for all IT executive positions surveyed is now $142,914 (down 1.2 per cent) in large enterprises and $126,021 (down 4.57 per cent) in mid-sized enterprises.
In mid-sized enterprises the mean total compensation for all positions has fallen 2.91 per cent from $75,814 to $73,607. At the same time, in large enterprises the median compensation has fallen from $82,197 to $81,128.
Retirement-age employees are also having an effect on the IT job market.
“For the second time in less than ten years, retirements are being put off because of the downturn in the stock market and the resultant reduction in savings available to support IT professionals as they retire,” the study noted. “Added to this is an influx of retirees who are looking to get back into the job market because of the massive reduction in their savings. There now is a surplus of seasoned IT professionals available.”
The positions in the highest demand are at the staff levels of both large and mid-size enterprises, with the focus continuing to be line operations and mandated security requirements such as Sarbanes-Oxley, HIPAA and PCI.
Hiring demand is down for IT executives – especially in mid-sized enterprises.
“With the recent changes in economic conditions, many enterprises are now looking to lower operating expenses and as a result are outsourcing, laying-off, and not replacing IT professionals as those positions come open,” The study noted. “There is a tendency to eliminate some specialization and have IT professionals assume more responsibilities in the positions they currently have. The operative words are ‘Do more with fewer people.'”
Outsourcing is placing pressure on computer operations staff, as those are the positions are the easiest to outsource.
Large enterprise positions facing decreasing demand and a higher potential for lay-offs and outsourcing were identified as VP of Technical Services; Director of IT Planning; Managers of Internet Systems, Operating System Production, Systems & Programming, Technical Services and Voice Wireless Communications; Data Entry Clerk, Database Specialist, IT Planning Analyst, and Senior Network Specialist.
At-risk positions in mid-sized enterprises were identified as Director of IT Planning; Data Communications, Operating Systems Production, and Technical Services Managers, Disaster Recovery Coordinator, Network Services Administrator, Network Technician, Software Engineer, and Web Analyst.
However, proven CIOs are in high demand in large enterprises with low lay-off and outsourcing potential, as are Computer Operations Shift Managers, Network Control Analysts, Network Services Administrators, Systems Analysts, and Systems Programmers.
In-demand jobs for mid-level enterprises include Database and Internet Systems Managers, Database Specialists, Network Control Analysts, and Librarians (PCI-DSS Specialists).
The IT Salary survey is based on Janco Associates, Inc. IT professionals’ compensation database, and compensation benchmark ranges are established for each normalized job position. In analyzing the study data, the upper and lower quartiles are eliminated to determine benchmark ranges.
This column was written by Erin Bell of ConnectIT, an IntegratedMarCompany
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