IT pay stagnates, workforce grows restless

David Thomas, network administrator at TallyHo Plastics Inc., is feeling a little beat up. In the past year, he's seen his compensation, training opportunities and benefits drop, all while watching his workload increase. He's not overly bitter -- the decisions his employer had to make were fair, considering the downturn, he says. And he sees some positive signs that things will improve in the coming year.

However, while the worst may be over and he no longer fears losing his job, "I do fear it will take much longer to regain lost ground in terms of compensation, benefits and training than it took to lose it," says Thomas. His job satisfaction, he says, has also taken a dive. So although he's not actively seeking a new job, he's not ignoring job possibilities like he used to. And if an opportunity were to arise once the recovery takes hold, he says he would "most definitely" welcome it.

Lucky, but Low

There are likely a lot of people like Thomas in IT today, according to Computerworld's 2009 Salary Survey. The results of our poll of 5,861 IT professionals show that salaries were flat this year, bonuses were way down, and benefits were reduced or eliminated. This year also saw increases in the percentages of respondents reporting canceled projects (35%, compared with 25% last year), training cuts (37% vs. 25%), budget cuts (65% vs. 53%), salary freezes (51% vs. 22%), and hiring freezes (48% vs. 33%). And that's just for the people who remain employed -- 44% of respondents reported permanent layoffs at their companies in the 2009 study, up from 28% in 2008.

It's no wonder that satisfaction is down, even among those who reported feeling lucky just to have a job. Some are like Jean-Sébastien Picard, IT manager at Polycor Inc., who is determined to stay positive despite a 10% pay cut. "I'm always happy at work, and I think it's our job to maintain a good atmosphere," he says. Others, such as Arthur MacLeod, systems administrator at Service Point USA, see silver linings in staff cuts, such as the opportunity to improve time management skills and increase cross-training.

But even for MacLeod, satisfaction is starting to wane. As he has watched colleagues get laid off, his own salary has been flattened, the bonus structure has been reworked, and training funds have been cut. A particular downer was when the company newsletter stopped circulating, since it had been providing state-of-the-company insights.

"Those stopped when the [workforce reductions] came about," MacLeod says. "It made you feel uneasy."

For others, dissatisfaction has hit hard. "It's hard to come to work," says a programmer at a big aerospace company, who asked to remain anonymous. Upper management has indicated that they will lay off at least 10% of the IT staff each year for the next five years, as well as increase outsourcing, he says. And company-provided training has disappeared. "There is no satisfaction," he says.

Reluctant Migration

Some see low morale translating into corporate churn once the recovery takes hold.

"As the environment feels less bad, people's willingness to consider new opportunities will improve," especially for those who have been asked to do a lot with less, says Tom Silver, vice president for North America at Dice Holdings Inc. In a poll of visitors to the Dice.com careers Web site, 74% of the respondents said they would at least consider a new opportunity, should it arise. Whereas IT professionals were busy keeping their heads down a year ago, now "they're at least lifting their heads and will listen," Silver says.

In Computerworld's survey, nearly half (47%) of the respondents said they were passively or actively looking for a job, either within or outside their companies. Of those who weren't, nearly half said it was because of the poor job market.

Certainly, if you look at past recession-to-recovery cycles, the trend is for employees to look for an employment upgrade, says Dave Willmer, executive director at Robert Half Technology and a Computerworld columnist. But the workers would be better described as curious than restless, he says.

"We're still pretty deep into [the recession]," he says. "The stories we hear out there are that people might be looking, but if an offer is out there, it's tough to get them to move."

That's certainly the case for MacLeod, who would gladly take a position that would shorten his commute, which is currently over an hour each way. However, he says, he would have to have "no hesitation" about changing in order to pursue it.

A Money Move

In many cases, a desire to recoup lost compensation is fueling the job hunt. In Computerworld's survey, that was the main reason respondents gave for wanting to make a move. However, IT workers are still expressing ambivalence about rocking the boat to improve their finances.

Roger Tower has had a front-row seat to the buckling of the economy. Laid off over a year ago from an employer in the Las Vegas gaming industry, he took a 10% pay cut to join Kalco Lighting as an IT manager, then he was hit with an additional 5% pay cut this past spring. His insurance benefits cost twice as much as they did under his former employer. All training was suspended at his previous job, and in his current position, he has been unable to add training dollars into the budget.

Still, he says, "I feel lucky to have this job, and I'd love to stay." But should a higher-paying opportunity present itself, "for the sake of my family, I would have to look at changing," he says. "I hope that doesn't happen."

Ambivalence is greatest among those who feel positively about the way they've been treated during the recession. A programmer at a large investment firm says he highly values the culture at his current employer, where he has worked for 12 years. He appreciates the respect employees are shown and the open-door management style.

However, the compensation conundrum is starting to wear on him. Small increases in pay don't come close to bringing his salary level to what he earned six years ago, the programmer says. In the end, "more money is great," he says, "but the best culture balanced with salary has been my current employer, which makes it very likely [I'll] stay where I'm at."

Still, it's hard to predict when and if jobs will materialize to meet job seekers' aspirations. According to a survey of 501 hiring managers conducted by Robert Half International and CareerBuilder, employers expect to hire in their technology departments first once the economy improves.

However, employment is a lagging factor in any recovery, Silver warns. "Although there are certainly signs of life in the general economy," he says, "employment takes the longest to recover."

Dice is seeing a higher number of openings in New York and Silicon Valley than it did in January, which Silver says is encouraging but not a definite harbinger of a hiring uptick for the rest of the country. "The first thing that has to happen is employers need to lift salary freezes," he says. "Then demand needs to pick up, and from there, salaries should improve."

Brandel is a Computerworld contributing writer. Contact her at marybrandel@verizon.net.

This story, "IT pay stagnates, workforce grows restless" was originally published by Computerworld.

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