IT workforce suffering under COVID-19, waiting on herd immunity for rebound

Middle-management IT salaries take a hit, bonuses and raises ‘all but eliminated’ by COVID-19, an IT-management consultancy report says.

head in clouds hiring in the future jobs by gustavofrazao and peopleimages getty images
gustavofrazao / PeopleImages / Getty Images

For the first year since the dot-com bubble popped, IT salaries were largely flat in 2020, and tens of thousands of jobs were lost in 2020, according to a report from independent management consultants Janco Associates.

Hardest-hit were middle management jobs at both large enterprises and smaller companies, where salaries actually dropped by about 0.08%, while executive and staff-level jobs remained steady or grew by a similarly small amount.

“What’s been hard hit, mostly, are IT organizations and SMBs,” said Victor Janulaitis, the CEO of Janco, which published the report. “That’s where the majority of the IT jobs are in the marketplace today.”

Bonuses and scheduled raises were “all but eliminated” in 2020, as the pandemic affected the IT job market in a similar, if less pronounced, manner as the rest of the economy. About 116,000 jobs were lost in the first wave of the COVID crisis in April and May, and only about 32,000 came back by the end of the year.

Hiring freezes have become the rule rather than the exception, and IT consultants are particularly feeling the pinch, according to the report. There’s still demand out there, in a couple of predictable areas: any workers with skills to support work-from-home and e-commerce still have prospects.

“The only things that seem to be working for IT projects are those that support the work-from-home environment,” said Janulaitis. “Very few companies are starting any new initiatives at all, and the thing that’s really striking is the elimination of discretionary bonuses.”

As the secondary spike in COVID cases precipitated by holiday travel continues to be felt in the U.S., the downward trend seems likely to continue. The potential reappearance of heavier restrictions on travel and business occupancy won’t do the economy any favors, and the fate of the IT job market will remain closely linked to the reappearance--or not--of normalcy in American society.

“I think you’re looking at a malaise in the IT job market,” said Janulaitis. “Until companies can operate on a day-to-day basis, until we have herd immunity, organizations are not going to look to be expanding in the technology arena.”

The silver lining is for workers with skill sets that deal directly with the increasingly at-home workforce. Security and compliance, Janulaitis noted, are likely to remain key concerns for businesses with remote workers, along with the ability to maintain the types of remote applications necessary for the home-bound American worker.

Join the Network World communities on Facebook and LinkedIn to comment on topics that are top of mind.
Related:

Copyright © 2021 IDG Communications, Inc.

IT Salary Survey 2021: The results are in