Salaries continue their modest rise, while demand for workers with key tech skills coupled with business acumen keeps employers scrambling to find and keep talent.
It's poaching season at Truven Health Analytics. The Santa Barbara, Calif., company has been up to its eyeballs in new projects since the federal government's Medicaid business systems group enlisted Truven's help to improve its Web-enabled reporting systems.
With business booming, Randy Lum, director of Truven's software and database design group, needed two highly skilled developers -- fast. But the rules of supply and demand were not in his favor. Nearly half of all managers who are in the hiring mood are looking for developers, according to Computerworld's 2014 Salary Survey. So Lum took a tried-and-true course of action.
"I steal people," he says, "people that I've worked with in the past that I know are good. I'm not shy about that. If I can offer them something they're after, I won't hesitate."
In fact, five out of seven of his direct reports -- all senior-level computer scientists -- are former colleagues. Most of them are looking for job security, Lum says, but a competitive salary doesn't hurt either. Right now his staffers earn between $128,000 and $143,000 per year. Their unique skill sets make them well worth the price, he adds.
"It is difficult to find developers with the right mix of technology skills for what we do," he explains. "We're not a large group, and my development staff is expected to have a wide range of skills -- so they can work on any part of any project, ranging from database to the Web interface and everything in between."
IT employees who participated in Computerworld's annual salary survey share that view of the market. They say a shortage of IT workers with the right skills, an uptick in new projects and a shift in the way IT works with business units have given them renewed optimism about IT careers -- though salaries and bonuses are advancing slowly.
Read the full report: Computerworld IT Salary Survey 2014
Compensation and job security inch up
IT salaries continue to chug along, with pay increases averaging a modest 2.1%, according to the survey of 3,673 IT workers. Bonuses are up by an average of only 0.7%, slightly lower than the 0.9% increase seen in 2013.
On the bright side, companies are spreading pay increases among more IT workers. Some 60% of the respondents reported a raise, while only 8% reported a pay cut. That's slightly better than last year, when 57% reported raises and 9% reported pay cuts, but well above 2012, when less than half reported a raise.
As the economy has improved, the percentage of respondents who feel secure in their jobs has also inched up, from 57% in 2012 to 59% in 2013 and 61% this year. Workers are also more optimistic about IT as a career: In 2012, only 29% said they believed that a career path in IT and the potential for salary advancement was as promising as it was five years prior, but that percentage increased to 38% in 2013 and to 42% this year.
The rising optimism among IT pros coincides with an increase in the number of open positions and a shortage of workers with the skills to fill those jobs. But while some people are in high demand, others find themselves sitting on the sidelines.
Hot, hot, hot
For the third year in a row, application development was the most sought-after skill: 49% of all managers who expect to hire this year said it was on their wish list.
Help desk and IT support skills ranked second, with 44% of managers expecting to fill jobs in those areas this year. That's up from 37% in 2013 -- the biggest year-over-year increase in our survey.
Not surprisingly, some organizations are having a tough time meeting salary demands.
It took six months to find a do-it-all help desk staffer to meet the growing technology demands of the Monadnock Regional School District in Swanzey, N.H., says Neal Richardson, the district's director of technology.
"We had very highly qualified candidates; we just couldn't meet their salary requirements," which were $15,000 to $20,000 higher than the district could pay, he recalls. "We ended up going with [someone with] less experience."
Public school IT professionals once accepted lower salaries in return for perks such as low-cost insurance and summers off, Richardson says. But school boards are whittling those benefits away. For instance, IT jobs are now year-round positions, he says.
Third place on the list of the most in-demand skills saw a tie between business intelligence skills and database analysis and development expertise, with 29% of hiring managers saying they planned to increase staffing in those areas.
"All things data" are red hot, says David Foote, CEO at Foote Partners, an IT labor market analyst firm. Titles such as data administrator, database developer and database architect are grabbing recruiters' attention, especially for positions in larger companies.
Rounding out the top 10 in-demand skills among 2014 survey respondents were security, network administration, networking, cloud computing, Web design and development, and data management.
Headhunter calls, unfilled positions
With demand outpacing supply for many positions, more than half of our survey takers (54%) said a headhunter has contacted them in the past year.
"I get a lot of job offers from staffing companies and corporations that need a ton of DBAs and SQL administrators," says Erin Baker, CIO at payroll processing firm Fastpay Payroll in Lubbock, Texas. He says he receives five to 10 calls a year from recruiters, and "most often they're looking for SQL DBA or SQL programming skills."
Though some offers have been tempting, Baker says no company has been able to beat the perks of his current job, which include weekends off, flexible hours and the opportunity to work from home.
David Fitzgerald, network and security engineer at Ariad Pharmaceuticals in Boston, says he gets a call or an email from a recruiter "probably once a day." But like Baker, he doesn't see himself leaving his current employer anytime soon. "It's a small cancer-based pharma. They're doing good things for people," he says. "I have a great deal of autonomy. I can make a difference."
(Many survey respondents ranked intangible factors such as recognition for good work and a positive corporate culture as important aspects of their jobs. See " What Do IT Workers Want?")
All of those recruiter calls point to a growing challenge facing employers: It's taking them longer to fill open positions. Half of the managers surveyed by Computerworld said that it has taken at least three months to fill open IT positions in the last two years.
The IT skills shortage is real
IT job watchers and HR consultants agree that there's a real skills shortage in the "hot" IT specialties because the number of projects that involve those types of work is exploding. And with many other IT positions, employers want the "perfect candidate" -- someone with a mix of tech expertise, problem-solving abilities and people skills. That's a tall order that keeps positions from being filled.
"Companies don't want the hard-core techie that sits off in the back room. They want the person that has those tech skills, but also someone they can put in the boardroom or in front of the business group," says John Reed, senior executive director at Robert Half Technology. "There aren't that many of those types of people."
Today, IT workers are "being thrust into a seat at the table," adds David Foote, CEO of Foote Partners. "The problem is, that seat requires a very different IT organization" -- one that can move with speed and agility -- and therefore a new hiring philosophy is also needed. For instance, Foote says, "the best companies are hiring software engineers who are also analysts because it's more efficient. You're doing it quicker, and it's strategic as well as tactical."
Lance Abla, principal systems engineer and specialist SE manager at EMC, spent more than six months finding the right candidates for three positions in EMC's presales consulting group. He says he's not seeking one specific skill but a wide range of knowledge in storage, networking, operating systems and "everything middleware and below."
"They have to be able to talk intelligently to C-level execs and customers, and make a case for why we should assist that customer in not only the services and software, but the hardware that they use to run their IT platforms. It's pretty hard to find people who have that breadth and depth of knowledge," not to mention the personality and professionalism that's required for the job, he says. "That quality where everyone perks up when they speak, or when they enter a room they have this presence -- I can't teach those things."
While positions remain unfilled, the projects are piling up for current IT employees. Some 26% of respondents said that in the past year their working conditions were significantly affected by unfilled open positions, compared to 20% in 2013. One-third of survey takers said they were affected by new understaffed projects.
Solutions architect senior manager Dane Bamburry received a 3% raise this year from his employer, Cox Enterprises, the same pay increase he had last year -- but he also got an 18% bonus for his efforts on two major internal cross-divisional projects that required him to work an extra five or six hours several days a week.
"In my immediate department we have a shortage of employees right now," says Bamburry. "I'm trying to procure funding to add additional staff."
Bamburry, who oversees a staff of five, says he fields eight to 10 phone calls a year from headhunters looking to poach employees with technology strategy skills -- especially people focused on mobility and cloud. "Those are the buzzwords of today," he says.
But he chooses to work the extra hours and stay with the company because he likes his team. "We have a good group of people, very collaborative, and a positive environment," he explains. "The career and growth potential so far have been good. If you have a good working environment with people you get along with, that's always a big plus."
Skills cooling off
Even as the need for some tech skills rises or stays steady, demand for others is cooling off. Staffing firm Robert Half Technology sees the biggest declines in mainframe and midrange computing skills like Cobol and AS/400 as the migration away from mainframe computing environments to Web and mobile systems continues, says John Reed, senior executive director at RHT.
Mainframes aren't disappearing, of course, but employers won't be paying top dollar for mainframe support. "I have mainframe guys on my team who clearly have not begun to recognize that they haven't maintained skills that are marketable outside of a small subset of the world," Abla says.
Tips for keeping the talent you have
While many IT workers are choosing to stay with their current employers for now, the trend may not last much longer. "Recruiters are very active now," says David Foote, CEO of Foote Partners, "so companies that have never had retention problems are really having problems now."
John Reed, senior executive director at Robert Half Technology, says companies can encourage employees to stay by creating an environment where open communication is welcomed.
He advises managers to build career road maps for the key people on their teams and then offer them the training and experience they'll need to reach their goals.
"Managers also have to sit down with people on their teams and get a gauge on how satisfied they are with their jobs," he adds. "Pay attention to work-life balance. Most managers want to address concerns before [employees] come in and just resign."
And while quality assurance is still very important in the software development life cycle, demand for QA specialists has slumped a bit as organizations are asking software developers to do their own QA work. As a result, "we have seen a decrease in [demand for] black box testing skills to a degree," Reed says.
Demand is also declining for skills tied to other technologies that seem to be on the way out, such as Windows XP, BlackBerry OS and desktop publishing tools used by technical writers, Reed says.
Nonetheless, Abla says, many job seekers still tout outdated experience. "There are people saying, 'I'm Microsoft certified and a good Windows server admin.' That was interesting five years ago, but not now," he says.
The same goes for many IT professionals who specialize in networking and operating systems. "You see people that have 'camped' there and haven't noticed the changes in the industry. Their resumes and experience show they've sat around and are now asking to be picked up and moved forward," Abla says. "It's not likely that I'm going to do that for them."
Changes in the skills that are in demand are happening more rapidly than ever, Abla warns. "You don't get five years to figure it out," he says. "You get months to figure it out."
In the last quarter of 2013 alone, the market values of some noncertified IT skills declined 10% or more, according to Foote. He says there have been notable declines in the value of a variety of disciplines, including application development specialties such as agile programming and rapid application development (RAD); Oracle application server and database expertise; skills related to e-procurement and other management processes and methodologies; Mac OS X expertise; LAN and IPX/SPX networking skills; expertise in systems such as VMware's vCloud, IBM's Tivoli, and SAP and other ERP applications; and e-commerce development specialties involving the use of Microsoft Commerce Server, XHTML MP and JavaBeans/EJB 3.0.
But Foote points out that "just because something's going down in value doesn't mean it's not desired; it just means that supply is catching up to demand."
Abla, who consults for EMC at dozens of large corporate IT departments in Texas, brings up yet another concern when it comes to keeping skills up to date: the danger that some IT roles might be removed from the enterprise entirely.
"I've got a number of customers saying they want to be out of the IT business altogether in the next three to five years," he says. "They want their application development people to get what they need from a service or cloud provider, and then go develop the app without having a staff of people managing servers and storage."
Reed says such a shift would be premature for many companies, but IT professionals shouldn't ignore the possibility. "If you're in a role that will be impacted by [a technology trend] such as cloud, you must build that skill set out so you remain relevant in the job world," he says. "The IT jobs market is evolving. If both employer and employee don't evolve with it, you'll be left in the dust."
IT Salaries 2014
- Salary Survey 2014: Read the full report
- Interactive Smart Salary Tool 2014
- IT jobs: Who's hot, who's not
- The 'always-on' IT culture: Get used to it
- What do IT workers want?
- Slideshow: Salary Survey 2014 highlights
- Opinion: Why 2014 is the year to become an independent IT contractor
- Opinion: 4 creative approaches to technical recruiting
- Top-paying industries for IT 2014
- How we conducted the survey
- Take part in next year's salary survey
Read more about it careers in Computerworld's IT Careers Topic Center.
This story, "IT Salary Survey 2014: Who's hot, who's not" was originally published by Computerworld.