Decent pay raises and hefty bonuses pushed '06 total compensation up by almost 6%.
Pay is rising, but the trade-off – brutal hours and inflexible schedules – has also begun to fade, according to Network World’s 2006 Salary Survey.
The workaholic pressure so common for IT workers over the last decade is on the decline, as network professionals report higher satisfaction rates for family friendliness and work/life balance issues than previous survey respondents. Respondents also claimed higher satisfaction with job security – rated the No. 1 priority – than they had previously. It all points to an increasingly vibrant IT job market in which employers are appreciating their IT workers and working harder to keep them happy.
“People are at more of a comfort level,” explains Marshall Curtis, IT director for the Carlisle Walker Group, a Madison, Wis., holding company for diversified manufacturing divisions. “They don’t foresee a lot of changes in their companies and are feeling more satisfied. They are not as worried about downsizing or outsourcing as they were three or four years ago.”
As IT rises in corporate importance while experienced workers remain hard to find, companies are offering employees better rewards. Overall, base pay increased 5.4% with bonuses up a healthy 14.2%.Base pay for the highest-ranking network professionals (those in CIO, CTO or senior vice president-level positions) rose 6.5% for 2006 to $132,560. Network professionals with middle-management jobs (LAN/WAN/telecom directors/managers responsible for technology and people) saw an increase of 5.2% to $84,510. Staff positions (those who manage technology but not people) jumped 5.3% to $66,190 (see “What you earn”).
Raises are not outrageously high, but they do beat the pants off the cost-of-living increases. The average inflation rate in 2005 was 3.7%, according to Inflation data.com. When adding in bonuses, stock and other benefits (such as car allowances), network executives reported an 8% leap in total compensation, landing at $162,580. Middle managers saw total compensation increase 5.5%, to $95,310, and staffers reported gains of 5.4%, to $71,790.
Still, respondents surprisingly reported that they aren’t all that happy with their pay packages. They ranked overall compensation as their No. 2 priority (after job security) yet placed it last, at No. 20, when asked how satisfied they were with it. Benefits ranked No. 3 in importance but lagged in satisfaction, landing at No. 15. Base salary rated No. 4 in importance and ranked No. 11 in satisfaction (see “Satisfaction ratings”).
Such dissatisfaction may be caused in part by wildly uneven stock-based compensation – once the star benefit for IT workers at every career level. Average stock-based compensation declined 3.5%. Middle management was particularly hard hit, tallying a 26.1% decline. Staff saw a 4.8% decline. Only senior management did well with stock perks – in fact, network executives raked in a whopping 49.8% increase in their stock-based pay.
Except for the highest-ranking IT executives, companies have switched from stock-based rewards to bonuses, offering sizable bonus increases for 2006. The 14.2% average bonus hike amounts to $5,790. Those in staff-level positions expect an average 16.3% increase, to $2,920, with those doing training, help desk and technical support work reporting the biggest percentage hike, a hefty 46.7%, to $2,230. Meanwhile, network executives expect a 10.2% increase, to $23,240, while middle managers expect a 13.2% increase, to $6,840.
Network executives attribute the emphasis on bonuses to the economy, which is cranking along well enough to be productive and stable but isn’t so predictable that employers want to commit to permanent base-pay increases.
“Bonuses are important because they work for both sides. They reward employees for what they’ve done but are not long-term commitments for management,” says Scott Williams, CIO for Longview Capital, a financial holding company in Newman, Ill.
Carlisle Walker’s Curtis adds that bonus increases are high this year, because IT is finally catching up to the compensation schemes offered for other business units. Within the last couple of years, IT has lost its reputation as a straight overhead expense, and IT workers are now getting bonuses based on overall company performance at similar rates to, say, the marketing or production employees. “For myself – and other IT senior management – bonus programs are the same as they are for any other business manager. It is not IT-specific,” he says.
Job-hopping and education
For the first time, we asked survey respondents about promotions. Interestingly, middle management reported the most promotions from current employers, averaging 1.97. This exceeds senior managers, who report 1.55 during the course of their current employment. Those in staff positions earned 1.38 promotions.
And $60,000 seemed to be the magic base pay number for ladder climbing. Those who hit or exceeded that mark reported the most promotions. In addition, employees working for large companies reported more promotions than those at smaller companies, as did women over men and people who toil the longest hours vs. those with shorter work weeks.
But the survey also found that the age-old job-hopping strategy clearly pays. Those who had worked for three or more employers in their careers tended to make more money than the stay-with-the-same-company types. Job hoppers reported an average of $85,200 in 2006 base pay compared with the loyalists, at $74,010. Job hoppers also are responsible for more people and servers, tend to have worked in IT longer, work more hours per week, are male and are slightly older than the loyalists.
The survey results hint that job-hopping may soon swing into vogue. Slightly more network professionals are fervently seeking new employment this year compared with 2005. Slightly more also are actively, but casually, exploring new employment options. These job hunters have come from the ranks of those who previously had been approachables – not pounding the pavement but willing to apply for a new job if asked to do so.
But job-hopping includes some sacrifice, with job hoppers reporting fewer promotions with their current company and less tenure than the loyalists.
“If you are starting out, definitely the way to go is job-hopping. It’s a fast way to get better pay and [learn] different things in the industry. But you trade off stability,” says Ron Barrett, IT director for accounting firm ERE, in New York. Barrett, 35, worked for six companies during the heady Internet bubble days. But, spurred by the birth of his second child, he has been at his current employer for five years and now highly values job security, he says.
Interestingly, education does not significantly affect promotions. This doesn’t mean that formal education has no impact on compensation. As education level rises, so does pay, with those holding graduate degrees earning the most money, averaging $102,100 base pay. This compares with $79,430 for those with a bachelor’s degree and $64,220 for those with an associate degree. Still, those with graduate degrees reported slightly more promotions than those with less-formal education.
Certifications had even less of an effect. This year’s survey, like the data from the previous five years, finds that certifications have no positive effect on compensation. Respondents with no certificates reported more promotions and greater earnings than those with two or more certifications. In 2006, network professionals with no certifications report average base pay of $81,710, while those with two or more certifications earned $77,270.
Network executives say certifications do not contribute to promotions or to base pay, because they are an ineffectual method of evaluating and rewarding employees. Vendors offer such an enormous range of certifications, many of them easy to achieve, that the value of the certification process has been watered down. Likewise, certifications do not prove real-world skill.
“Certificates are not particularly important,” says Barrett, a Microsoft Certified Systems Engineer. “The biggest benefit is in dealing with outside regulators. It basically shows I know what I’m doing. A cert shows at least you know enough to pass the test. But [when hiring or promoting], we look at experience, customer service and skills,” he says.
The hottest skills, network executives agree, are security, telephony, wireless, remote access, routing, and LAN/WAN design and management. “I tend to steer people toward the LAN and networking side. You don’t worry about outsourcing. Companies are always going to need someone here looking after the LAN and network,” Barrett says. “The standards will always be there, too – basic admin of a Windows network. Is it hot? No, but it is always going to be needed.”
Size and work/life balance
Two factors that determine high pay are geographic region and company size. Not surprisingly, in areas where the cost of living is high, pay is higher. These areas, such as in Massachusetts and California, are also longtime hotbeds for the technology industry, which increases the number of IT jobs available.
The size of the corporation also is significant. Simply put, the larger the corporation, the higher the pay, bonuses and benefits. Yet workers in larger corporations are more likely to be seeking new positions than those in smaller firms, while those in smaller firms are more likely to be loyalists – not able to envision changing jobs in the foreseeable future. What gives? Net executives at smaller companies say that they simply enjoy their jobs more and are willing to sacrifice a bit of pay for that.
“There’s more freedom in a small company. I have to cover more duties, so I’m given a lot of leeway in how I do it. Taking pay out of the equation, it’s a lot better to be a big fish in the little pond than a medium fish in a big pond. If I worked for a big company and was an e-mail administrator, then all I would do all day long is e-mail,” Longview’s Williams explains.
The good news is that network professionals in all regions and all size companies are enjoying better balance between their work and personal lives than they have in a long time. Respondents rated flexible work schedules the No. 1 area of job satisfaction. Family friendliness was No. 2, while areas such as proximity to home and vacation packages also landed in the top 10.
Many network professionals have permanently shelved the workaholic era, Carlisle Walker’s Curtis says. The Internet bubble days drew an influx of people that “didn’t put a high value on family friendliness, so the companies didn’t need to offer it,” he says. The following economic “backlash and downsizing” sifted out most of the folks without long-term career aspirations in IT, but those scary downsizing days also forced workers to continue on with long hours, doing more with less, for the sake of job security, he explains. As of 2006, “the people who remain in IT have said, ‘Enough. I can’t work 70 hours a week,'” and the job market is responding, to the satisfaction of many.
