Companies Still Making IT Pay Cuts, But Why?

Ralph DeFrangesco

According to a recent NetworkWorld article that I<strong>T Business Edge blogger Ann All</strong> wrote about, companies are still making IT pay cuts and forcing unpaid furloughs. These companies are even cutting the pay of key personnel, causing employees to jump ship.


A recent Janco Associates salary survey found that total compensation for IT professionals fell an average of 19 percent between January 2008 and June 2009.


Compensation professionals recommend implementing pay cuts across the board rather than just targeting one group. Targeting one group tends to lower morale. When employees have low morale, they will leave for greener pastures.


Ventana Research, a leading benchmark and advisory services firm, found that companies do understand the benefits of compensation management and planning. Ventana found that 58 percent of companies in a recent survey agreed that aligning work force to business goals is the highest priority; 45 percent rated improving relations with employees as important.


Today, it costs a lot of money to replace people. There are hiring and recruiting costs, training costs and lost productivity costs, to name a few. In addition to more costs, the remaining employees have to pick up the work from the laid-off workers, again lowering morale.


Final advice from the compensation pros, if you have to cut pay, make it up by giving additional training or some other compensation in the future Kachina Shaw, an IT BusinessEdge blogger, found that compensation for IT executives fell 7 percent during 2008. However, perks rose by 7 percent. So le'ts apply what the compensation professionals told us. Cuts should be across the board for all employees or they should be given some future compensation, just like top management.

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