Annual raises fall short, leaving IT pros to grin and bear

With the roiling effects of the economy churning their organizations, IT executives entered 2009 with protective blankets thrown over employee pay.

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As 2008 ended, they pulled back on some major expenditures and slashed discretionary spending - but most tried not to cut pay. (Read related story on IT spending plans for '09.)  Instead they froze salaries at 2008 levels, ratcheted down increases or deferred raises until stability returns.

It may be for naught, however. "If the economy continues spiraling downward, budget problems could be exacerbated, and not touching pay could get tougher," says Stephen Fugale, CIO at Villanova University.

Many IT professionals entered 2009 knowing they'd see either no salary increase or, in a few cases, a salary reduction, the results of the Network World Salary Survey show. In the survey, conducted in mid-September, one-third of the 1,854 participants said their 2009 pay will stay at 2008 levels, while 3% said their pay will slide downward. The rest are getting raises, with the bulk of the group (80%) seeing increases of 4% or less. For a point of reference, the inflation rate hovered at around 3.7% at year-end.

When the anticipated hikes and cuts are added up and an average is taken, respondents expect a 2.3% salary increase for the year, pushing base pay for the group from $86,800 to $88,800 on average.

Even those at the top of the IT ladder are looking at small raises. Salaries for senior-most IT executives are expected to climb 2.9% on average, bringing pay at that level to $120,800. That compares to 2.3% hikes for middle managers, whose average pay will inch up to $93,700; and 2.1% increases for staffers, who will make $78,400 on average this year. (Use our interactive salary calculator to see how your pay stacks up.)

Survey respondents clearly aren't satisfied with the trend. When they ranked their satisfaction with 10 job factors, an annual raise came in at No. 8. As one respondent says, stomaching a 3% salary increase can be tough when your group has optimized business processes to the tune of hundreds of millions of dollars. In fact, respondents aren't too pleased with overall compensation and benefits. These came up at No. 1 and No. 2 respectively when respondents ranked job factors by importance, but at No. 5 and No. 4 in the satisfaction ranking. (View a slide show of satisfaction measures.)

Almost half the respondents said they feel underpaid, while only 20% said their compensation packages are more competitive than packages they would receive elsewhere. The remaining 33% said they felt comparably compensated. (View a slide show of salary data.)

In this economy, however, being dissatisfied with raises and compensation isn't enough to turn people against their employers. A whopping 97% of respondents said they were either satisfied or highly satisfied with their jobs.

Perks that contribute to that loyalty include time off, work-schedule flexibility and the increasingly important factor - job security. These rated No. 1, No. 2 and No. 3 in satisfaction.

Of course, corporate culture also plays a role, survey respondents said in follow-up interviews. The more you like where you're working or what you're working on, the more you overlook the other things.

At The Beck Group, a Dallas-based architecture, construction and development firm, CTO Bryce Morrow knows that he and his staffers are paid 5% to 7% less than peers at similar firms in the Southwest. Beck Group, however, has the advantage of being a smaller, privately owned company that offers workers a lot of flexibility.

"From the CEO down, it's clear people care here," says Morrow, who manages a team of 13 employees. Salaries for this year are expected to remain flat.

Compare your pay, satisfaction and loyalty ratings, and skills needed on a regional basis with our interactive map.

For Bill Richards, an infrastructure solutions architect at Hewitt Associates, telecommuting is more important than salary structure. Based in Lincolnshire, Ill., Hewitt is a human resources firm serving clients globally. Richards oversees the company's desktop productivity programs from an office in his home perched on the wooded shore of Lake Superior in upper Michigan.

Richards is living where he wants, he says, and loves what he's doing - negotiating with and managing suppliers, enforcing desktop standards and consulting with lines of business. The 2% to 3% salary increase he's expecting may not cover the increased cost of living, but it's fair for his position, he says, noting that he's nearing the top of his current pay band.

For Alan Watkins, enterprise architecture and IT standards manager for the city of San Diego, job security is more important than pay. The city is in a precarious financial situation - and has been for years - but he figures the nature of his work puts him low on the layoff totem pole.

Watkins manages the city's overall enterprise architecture, with responsibility for IT security, policies and internal controls. He considers the work "interesting and challenging," not to mention invaluable. "I help with internal investigations. I respond to public records requests and subpoenas. . . . I have a lot of corporate knowledge that allows me to find things quickly. Replacing me would be difficult," he says.

Despite the fact that the city has frozen salaries for the past three years and is doing so again for the coming fiscal year, "I'll stick it out," says Watkins, who is three years from retirement. "I'm in a good position career- and salary-wise for what I'm doing."

Given the economic turmoil, IT workers clearly are more grateful for their paychecks now than ever before, respondents say.

"'Lucky' might not be the best word to use, but I would say people do feel fortunate to have their jobs," Beck Group's Morrow says. "Most of the people, at least in my IT group, understood the economic issues long before the economy took the big downturn."

Even so, some IT pros are seeking greener pastures.

Nearly a quarter of respondents classified themselves as active job seekers, meaning they'll look for new positions this year. Seekers are more likely to be staff members than middle or upper management; and they expect their salaries to increase by 3% or less, stay the same or decrease this year, results show. Speaking to the importance of corporate culture, seekers are twice as likely to be looking for new jobs because of personnel issues or the work environment as those who consider themselves as approachable about new employment opportunities. (View a slide show on loyalty.)

Seventeen percent of the respondents are loyalists - IT professionals who said they wouldn't dream of switching jobs this year. Not surprising, loyalists are more satisfied with every job aspect than seekers are. Nearly split between the seeker and the loyalist extremes are those who say they'd explore a new job if they read or heard about an opening and those who would follow through only if personally approached about an opportunity.

Among those respondents who are planning to change or who would entertain a new opportunity, roughly a third named a boost in salary or career advancement as their top reason for a move. Eight percent of respondents indicated they wouldn't have a choice in the matter. They anticipate looking for work sometime this year because they expect to be laid off.

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