IT pay cuts: Are you next?

As more companies enforce across-the-board pay cuts and unpaid furloughs, a rising tide of IT professionals is seeing its annual compensation decline and must decide whether to switch employers as a result.

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Among the companies that have instituted broad pay cuts this year are National Public Radio, the New York Times, Nucor and the Georgia State government. These organizations are slashing the pay of even their most in-demand IT staff, such as Web developers, information security specialists, enterprise resource planning gurus and IT architects.

Some IT professionals jump ship immediately after their pay is cut.

For example, one Indiana firm eliminated annual bonuses at the end of 2008 for all of its employees, including the IT staff. A few months later, all employees making more than $90,000 saw their salaries cut by 10%, which impacted two IT managers. Both IT managers left the firm within a few months of the10% pay cut, a knowledgeable source said.

IDG, the parent company of Network World, instituted across-the-board pay cuts of 10% in May. Rob Rebecchi, Manager of Technology Support Services for IDG, says his group of five analysts, who handle tech support calls for the Framingham, Mass., publishing firm, was affected by the pay cut.

"I've lost one junior analyst since then," Rebecchi says. "All the IT groups in IDG were affected by the pay cuts, and there have been some [staffing] changes in each group as a result."

Overall, IT pay and perks continues to shrink in 2009. A Janco Associates survey released in June found that total compensation for IT professionals fell an average of 19% between January 2008 and June 2009.

Companies must include IT workers in their across-the-board pay cuts, argues Sarah Mitchell, associate director of The Alexander Group, a San Francisco recruiting firm. The Alexander Group has instituted salary cuts for everyone, including IT staff. No one has left the firm as a result of the pay cuts, she says.

"To exclude one group would be a really bad idea because of morale issues," Mitchell says. "If you have to do it, you have to do it across-the-board. You can't release anyone from the pay cut."

Mitchell recommends that companies who cut the pay of in-demand IT professionals respond by offering training opportunities and new responsibilities.

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