IT Pay Falling Along with the Economy


The outlook on IT salaries seems to be declining, right along with the economy.


In a post about the IT hiring outlook from last month, I noted that half of IT hiring managers responding to a Dice.com survey expect IT salaries to remain flat in 2009, while a quarter of the respondents said salaries would fall this year. Earlier this month, there was similar news in Network World's annual salary survey, with 39 percent of respondents saying IT pros could expect compensation in 2009 to remain the same or fall.


On Friday, we reported on a survey by Foote Partners that showed a 0.5 percent decline in skills pay for tech jobs between 2008's third and fourth quarters. While pay for a handful of skills rose during the period, it was the first overall decline since mid-2004, according to Foote. The decline in skills pay, which Foote Partners spokesman Bill Reynolds calls "much more dynamic" than salaries, may be a pretty accurate predictor of what to expect from salaries in the coming months, since economic conditions show no signs of improving in the short term.


A new report from Computer Economics predicts median tech pay will rise -- albeit not much, at 2 percent -- this year if inflation remains flat or in negative territory. That's a significantly lower increase than last year, when pay rose 3.5 percent, or the past few years (3.8 percent in 2007 and 3 percent in 2006). Computer Economics expects IT executives, managers, directors and developers to see a pay increase of 2 percent to 3 percent next year. Other IT workers will fare slightly worse, with a 1.5 percent to 2.5 percent increase. Existing workers can expect to receive higher pay than incoming employees with similar skill sets.