February 09, 2009, 10:59 AM — IT professionals have good reason to feel anxious about their careers: Job losses among IT workers are mounting as CIOs cut their IT budgets and as IT departments shed staff and institute hiring freezes.
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But new research may give IT professionals some much needed good news: IT research firm Computer Economics is projecting that IT salaries will increase in 2009. Computer Economics isn't predicting a substantial increase in IT pay, but an increase nonetheless, at a time when many companies are resorting to salary freezes to keep personnel costs in line with revenue shortfalls.
The research firm, which specializes in IT management metrics, predicts that IT salaries will grow by about two percent this year.
IT executives, directors, managers and application developers will see slightly larger increases than that two percent. Computer Economics predicts that base salaries for IT management and for people in application development functions will creep up between two and three percent his year, as certain programming and IT architecture skills remain in high demand and as employers offset reductions in bonuses for managers with higher base salaries. Meanwhile, wages for other IT workers will inch up between 1.5 percent and 2.5 percent.
Computer Economics' IT salary projections are slightly lower than those released by Robert Half International in October, 2008. At that time, the IT staffing firm predicted salary increases of 3.7 percent for IT professionals in 2009.
John Longwell, Computer Economics' research director, acknowledges that his firm's forecast is conservative. He notes that a salary survey Computer Economics conducted during the fourth quarter of 2008 showed that the median pay raises IT organizations planned for their staffs was three percent. Computer Economics adjusted that figure to two percent to reflect the continued deterioration of the economy and rising unemployment.
Longwell says that if inflation remains flat or negative, smaller pay increases this year could do more to boost IT professionals' real income than larger pay increases did in previous years, when inflation and energy prices were high.
"If there's no inflation and if your salary increases two percent, your personal income in real terms increases," he says. "Compare that against, if you get a six percent raise but there's eight percent inflation, your real personal income declines."
IT Better Positioned to Survive Recession Than Other Functions
Longwell believes IT spending has been "fairly restrained" since the 2001 recession, which hammered the IT industry. Since then, IT organizations have been cautious about adding staff and have found ways to run lean, for example, by outsourcing more and automating more data center work, he says. Consequently, Longwell adds, IT leaders can make a strong case that their departments are already running efficiently and can't afford more cuts.
"Companies laying off workers may also be looking to IT to increase the productivity of remaining workers," he says. "So all those things make us believe that IT isn't going to face the severe cuts that other areas might face."
Computer Economics' research is based in part on a salary survey it conducted in the fourth quarter of 2008. The company uses its own historical survey data, as well as data from the Bureau of Labor Statistics, to create a statistical model based on the relationships among IT job titles and metropolitan areas. Computer Economics uses the statistical model and survey data to project 2009 salaries for 70 specific IT functions by metropolitan area.