The best industries for IT compensation

The 1.6% pay increase reported by government IT professionals in Computerworld's 2009 Salary Survey might not seem like much, but it's better than what Bruce Walton and other California state IT workers have seen recently.

Since July, Walton and other employees for the state of California have been forced to take three furlough days per month because of budget constraints. The furlough days result in a 14% pay cut, and the policy is expected to remain in place at least throughout the state's current fiscal year, says Walton, a network administrator for the California Energy Commission in Sacramento.

Times have been lean for Walton and other California state workers since their union obtained a 5% raise in 2006, Walton's first year in his role. Despite the state's budget problems, Walton, a 17-year IT veteran, says he likes his job, along with the security that a government position offers. So he's standing pat and hoping that his base pay improves "down the road."

According to this year's survey results, there are a handful of sectors where compensation inched up from last year, including energy/utilities (1.3%). And demand for IT professionals in that sector continues to be strong, says Dave Willmer, executive director of Robert Half Technology in Menlo Park, Calif., and a Computerworld columnist. (Read Willmer's thoughts on a skills-driven IT hiring rebound.)

Meanwhile, some industries where compensation for IT professionals has historically lagged, such as education (1.4%), are experiencing a remuneration renaissance. A key factor: When the economy is down, more people go back to school to earn degrees to help them in the job market, says Willmer. As enrollments go up, schools require more IT support professionals, says David Van De Voort, an IT workforce specialist at Mercer LLC in Chicago.

Where the Pay Is Hot

Here are some of the industries where IT compensation is on the upswing, with a look at some of the factors behind these trends.

Government: Job security, solid pension plans and attractive benefits are a few of the reasons why government IT professionals say the public sector offers favorable career prospects, despite the revenue shortages that are dogging cities and states. Plus, federal stimulus money is leading to more IT projects, which in turn are sparking demand for IT professionals at the federal level.

Still, there are drawbacks to working in the public sector, including a lack of mobility, since senior IT workers tend to remain in their roles for quite a while, say some government IT professionals.

Although he didn't receive a raise this year because of budget constraints, Dennis O'Connor, a programmer/analyst for the city of Alexandria, Va., says he enjoys the autonomy he has in his role supporting an application that's used by the city's housing, building and fire code enforcement officials.

Plus, the city's pension plan is better than anything O'Connor has received in private sector jobs. "Already, the retirement I built up here after nine years is more than I got from Wachovia after 26 years," says O'Connor.

Health care: There are many reasons why the health care industry is an appealing destination for IT professionals, beyond the visible impact that technology can have on patients' well-being. For starters, the sector is less affected by economic cycles. Plus, the Obama administration recently set aside $1.2 billion in federal stimulus money for deployments of electronic medical records systems and other health care IT initiatives, notes Terry Erdle, senior vice president of skills certification at the Computing Technology Industry Association (CompTIA) in Oakbrook Terrace, Ill.

"Health care IT shops are among the busiest I deal with -- they just have so much going on," says Mercer's Van De Voort.

At Texas Health Resources, PMO manager Joel Verinder says he likes the fact that senior management maintains an open-door policy, encouraging employees to propose ideas for cutting costs or improving patient care. Verinder recently suggested a new approach for IT workers to collaborate and drive innovation at the Arlington, Texas-based health care provider. The idea was approved by the company's CIO and is being tested, he says.

"I'm very happy to be working here," says Verinder, who joined the health care company in 2008 after spending 12 years working in a range of IT roles in the public sector and the airline, telecommunications and automotive finance industries. At Texas Health Resources, he says, "it seems like you have a chance to do a little bit more to improve the bottom line."

Energy/utilities: Working in the energy industry has been unlike any other IT role that Neal Steik has held during a 33-year career that has included stints at an HMO, at a law firm and in the insurance industry.

The energy/utilities industry is "much less political than other industries I've worked in," says Steik, who is supervisor of workstation support at Puget Sound Energy in Bellevue, Wash. At PSE, there's no dress code, layoffs are unheard of, and there's a family-oriented atmosphere among both blue- and white-collar workers, says Steik.

Although Steik took a $20,000 pay cut when he joined PSE in early 2008, that was offset by health care benefits that are better than those available through his previous employer. For instance, even though the last company Steik worked for covered 100% of his own health care benefits, he had to pay $7,000 out of pocket to cover his wife's insurance. "Now, everything's covered," he says.

Some segments of the energy industry also expose IT professionals to leading-edge technologies. For instance, Aaron Van Cleave, an infrastructure architect at Aera Energy LLC, an oil and gas producer in Bakersfield, Calif., says he was recently asked by the company's architecture board to offer his opinion on some oil well analysis applications the company recently approved. "Questioning is not only accepted here, it's expected," says Van Cleave, who received a 5% raise last year.

For any IT professionals considering a switch to the energy/utilities industry, "if net pay is their primary driver, I'd tell them to look elsewhere," says Steik. But if they're considering the total compensation package, including benefits, "the utilities industry is in the ballpark," he adds.

Defense/aerospace: One of the unique characteristics of the defense and aerospace industry is that it boasts a highly educated workforce made up of engineers who specialize in a variety of disciplines. That's certainly true at The Aerospace Corp., an El Segundo, Calif.-based organization that provides technical and scientific research and development services to the U.S. Air Force and NASA.

Three quarters of the company's 4,000 employees have master's degrees, and a quarter of them are Ph.Ds, says John Martillo, director of enterprise systems and storage at the nonprofit company.

That kind of brainpower feeds into the corporate culture. "The low turnover rate says it all -- it's not because they're being paid more for their level of education and industry experience," says Martillo, who was involved in guidance navigation and rocket performance initiatives at the company prior to becoming an IT director eight years ago. "It's really the working environment. Some of the people here are the world's renowned experts in their fields. It has a collegial feel that people find very attractive."

Last year, members of the company's technical staff received 3.5% to 4% salary increases. "From an IT standpoint," says Martillo, "people here are slightly better paid than they would be in some other industries."

Education: Since she rejoined the University of Pittsburgh in 2008 as director of health sciences IT, Gwen Pechan hasn't been putting in 70-hour workweeks like she did at the start-up medical device manufacturer she left. But she has been logging 50- to 60-hour weeks lately, thanks to a special project that's aimed at tracking federal stimulus monies received by the university.

Generally speaking, the pace at the university "isn't nearly as aggressive as other places I've worked," says Pechan, who received a 9% pay increase when she rejoined the school.

Since the university employs a lot of big thinkers, says Pechan, there are always fresh ideas about new systems to build. But unlike IT organizations at publicly held companies whose executives are pushed to meet quarterly earnings targets, she adds, "our deadlines tend to be a little more flexible."

Hardest-hit sectors

While some have fared better than others, IT professionals in industries that have been clobbered by the global recession, particularly financial services and computer manufacturing, have generally seen their compensation take a nose dive. According to Computerworld's 2009 Salary Survey, IT workers in the manufacturing sector experienced an average 4.1% decrease in total compensation, followed by their peers in the wholesale trade (-3.1%) and automotive (-2.7%) industries.

Meanwhile, IT professionals in the banking sector saw their bonuses get slashed by a whopping 33.2% on average in the past year, and those in the legal/insurance/real estate industries have had their bonuses drop an average of 20.5% since 2008.

"It's almost the biblical 'the first shall be last and the last shall be first,' " says Mercer IT workforce specialist David Van De Voort, referring to the fact that traditionally well-compensated IT professionals have experienced a big drop in pay while their counterparts in historically low-paying sectors, such as education, are seeing an uplift.

The good news is that many IT professionals in hard-hit industries should see spikes in incentive pay once business conditions begin to improve, Van De Voort says.

Hoffman is a freelance writer in New York. You can contact him at tom.hoffman24@gmail.com.

This story, "The best industries for IT compensation" was originally published by Computerworld.

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