Tech Managers Make $115,000, Staff $87,000. Why Are IT Pros So Worried?

Apr 22, 2011 (08:04 PM EDT)

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To understand the journey business technology pros have been on for the past decade, you need to look at the stats, and also the stories.

The stats, gleaned from the InformationWeek Analytics 2011 U.S. IT Salary Survey, show that IT remains a well-paying profession: IT managers make a median total cash compensation of $115,000 and staffers make $87,000, our survey of more than 18,000 IT pros finds. Salaries vary greatly by specialty, however, with high-skill staffers in system architecture, data management, and enterprise application integration typically making six figures, while help desk staffers make around $55,000.

For all IT pros, raises have been hard to come by in recent years. Last year's pay freezes have given way to small increases--the median total compensation raise for IT staffers is just 0.9% this year, 1.9% for managers.

The current situation seems a lifetime away from 2001, when the median raise was a stunning 8.5% for staff and 9.9% for managers. IT pros saw their salaries tank in 2002, amid a recession, a backlash from the pay hikes of the tech bubble, and the emergence of offshore outsourcing. Median compensation didn't return to

2001 survey levels until 2005. It has risen every year since then, except in 2008, when another recession took its toll (see chart, below).

The stories of IT pros are as volatile as the numbers.

Lisa Morgan made the leap from self-taught IT hand in the early 1990s to become a database pro, only to lose her job of 13 years in 2006, when real estate cratered and the title company she worked at folded. Morgan landed another job, in financial services, only to lose it in 2010 amid the banking crisis. So as she worked contract jobs last year, she spent $3,000 on more programming classes, bartered some home PC and networking work for a $350 used server to learn SharePoint, and in October landed her current gig, at a government contractor.

chart: The long haul: total cash compensation

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Ryan Carr is living the IT dream, working on the cutting edge of big data analytics as global VP of data mining at Catalina Marketing, where real-time, monster number crunching and statistical modeling let retailers serve up coupons to their customers at checkout based on what people are buying. All Carr had to do to get there was get up at 4 a.m. three days a week over the past few years to drive into downtown Chicago to earn a master's degree in statistics while working in IT at Catalina.

Bentley Curran is a CIO who has spent much of the past decade refocusing an IT team at a midsize manufacturer from running servers toward more strategic IT, including a shift to cloud computing.

Karen Garcia moved up from programmer at BMC Software to run the vendor's project management office, then to a vague "chief of staff" role, where she got the wildly unpopular task of forcing change and discipline on IT operations. Garcia's job is indicative of the maturing of IT management, as she brought in budgeting practices, timekeeping, and lots of other operating disciplines IT pros don't have much interest in but companies increasingly demand.

Brian Siler thought he had weathered both recessions in keeping his six-figure corporate IT job at Hilton, only to be laid off in January 2010 as the hotel group outsourced much of its operational IT, after Hilton was acquired by private equity investors. Now he's at a four-employee startup, earning less than one-fifth the pay, working with his former CIO doing sales calls and revenue forecasts along with programming as they try to create a business around services and software to do marketing via smartphones.

And these are people who've stuck it out in IT, while many thousands of others have left the field over the past 10 years. Pure programming jobs have gone offshore by the thousands. Cloud computing looks poised to alter the work that corporate IT does. Our 2011 salary survey suggests the wild and sometimes painful journey continues.

chart: Skimpy raises Median percentage change in total cash compensation?

Clouds And Careers

"Finding good talent is the same as it's always been--really hard," says Bentley Curran, one of the IT pros we cited earlier, who's CIO of Brady, a manufacturer of specialty labels, signs, and die-cut parts, many of them used in electronics such as cellphones. His outlook on staffing offers a lens into the impact cloud computing could have on IT careers.

Curran's IT team--with employees in the U.S., India, and the Philippines--now evaluates software this way: first, use software as a service; second, have it hosted in a third-party data center; and only if neither of those approaches work, bring the software inside Brady's data center. The company's SaaS lineup includes Google Apps for collaboration, Workday for human resources, for customer relationship management, and soon Omniture for website data and Ariba for procurement.

The cloud kills old jobs but creates new ones. For example, where before Brady had Domino developers keeping its Lotus email servers running, now those staffers are working with the company's R&D group to ensure that employees in its Asian and U.S. design centers are getting the collaboration features they need from Google Apps.

Curran sums up what he wants from his IT pros in three principles: entrepreneurial IT, so they're coming up with new ideas; connected IT, so they're plugged into business units and anticipating needs; and IT as a trusted adviser, so business units see the value of calling IT into discussions early.

Brady still needs technical skill. For example, its IT team built and runs a content management system for its products that can be customized, so buyers can enter the requirements online. Salespeople can use the content management tool to add new products themselves, without IT's involvement.

chart: What Staff Earns
Content management skills are in high demand at a lot of companies, it seems. Our salary survey found that managers in charge of enterprise content management top the pay list, with median pay of $136,000. That's a 24% leap from the $110,000 in 2010, so we'll have to watch whether that growth trend lasts. But it fits with the fact that companies are becoming more dependent on digital content, for goals ranging from personalizing marketing campaigns to doing deeper analytics.

In contrast, data center management jobs are further down the pay scale, as companies need fewer people to run IT infrastructure because of increased automation and cloud computing.

Brady has about half the physical servers in its data center it had just three years ago. There are still job functions that haven't gone to the cloud--Active Directory's still on premises, because there's no viable cloud authentication, and ERP looks like it'll stay there for the long haul. "There's going to be some point where the only thing left in the data center is ERP," Curran says. "At that point, I can probably at least look at hosting."

ERP, in fact, is one function that has never strayed from the top of our IT salary scale over the pace decade. This year, it's again among the top five staff and management functions. At $102,000 median pay, it's one of three IT staff functions that earn six-figure compensation. In the same league is the enterprise app integration function, at $105,000 median staff compensation.

The Analytics Opportunity

Companies are trying to make better sense of their mountains of data, and that's why they're spending on business intelligence and analytics software--and people. Median pay for data integration/ data warehousing specialists is $107,000 for staffers and $131,000 for managers, among the elite categories in our survey.

Business intelligence/analytics also ranks in the top five of managerial functions, with median pay of $130,000. The BI/analytics specialty is a cut below for staffers, at $90,000 median comp, likely reflecting the mix of jobs that can fall into this category, from strategic data analysis work to more routine report building.

Back in 2001, we didn't even break out BI/analytics into its own category, and the closest one we had--"data mining/data warehouse"--was in the middle of the pack for management compensation, ranked ninth.

Today, asked which business or technical skills are critical to their jobs, 54% of staffers cite "analyzing data"--more than any other option. Compare that with the 39% who cited "preparing reports," suggesting that these pros are using data and not just handing it off to others.

chart: What Management Earns
Among managers, 56% cite analyzing data as critical, topped only by aligning business and tech goals, and collaborating with internal stakeholders. (Sadly, 48% of managers also say "preparing reports" is critical to their jobs.)

But although IT pros think data analysis is critical and pays well, when asked what training they value, a tiny 5% of staffers and 6% of managers cite statistics/analytics among the top two choices. Most aren't piling into the soft-skill stuff, either--just 7% of staffers cite communication training as valuable to their careers. Staffers are interested in tech-specific training (73%) and certifications (42%). Managers aren't much different.

Hard To Find

The reality is that people with both IT and statistics skills--people like Ryan Carr at Catalina Marketing--remain rare birds. Back in 2004, when Carr returned to school to earn a master's in statistics from the University of Chicago, he did it for one big reason: fear of outsourcing. "I figured if I could be one of those people who could translate business questions into answers, that'll be tough to push overseas," he says.

The pace of technology change at Catalina shows why businesses see new opportunity to exploit analytics, and thus why it's such a hot job prospect.

Catalina builds predictive models, so a retailer or consumer goods company can predict by what someone has in a shopping cart what else the person is likely to buy. (All Catalina uses is a loyalty card number and shopping history.) Doing that takes analyzing a database of 400 billion rows of item-level data.

In the first year Carr worked on this effort, he and one other person produced just four models, and the computing time to process all that data took eight to 16 weeks. Today, it takes eight to 20 hours, and five people created 700 models last year. Carr's goal, if he can tackle that 400 billion rows of data with in-memory processing, is to lower that processing time to about 10 minutes.

Speed like that will let companies analyze data to make more decisions and take more actions in real time. And companies will need people who understand that computing and statistical modeling capability. Carr warns, however, that the IT and statistics camps can be rivals at some companies. And it can be hard for IT pros to make the leap without formal statistics training. "For an IT person to migrate over to analytics, there is kind of this paper barrier," he says.

What Matters In A Job

When Lisa Morgan lost her job with a credit card company in 2010, she lamented to her domestic partner that it was the best job she'd ever had. "She said, 'That's what you said the last time you lost a job,'" Morgan recalls. "And now I'm in the best job I've ever had."

An IT fairy tale? Maybe--except for the 10 months of stress, doubt, contract work, and retraining in 2010.

Morgan's now working for an IT contractor, Dynamics Research, focused on government clients. She's doing interesting work on an Army logistics system, and she's impressed by her new colleagues' application development discipline. She's earning more money than she did on her last job, gets better benefits, and has just a 10-minute commute. Morgan's priorities are similar to those of the IT staffers in our survey: base pay, benefits, flexible work schedule, and having their opinion and knowledge valued.

Although base pay was cited by staffers more than any other priority in our 2011 salary survey, it was cited by only half of respondents, down from 60% two years ago. But even at 50%, base pay has climbed in importance since 2001, when only 41% of staffers cited it as a priority. When even middle-of-the-pack IT pros are getting a 9% raise and an $11,000 bonus, few people are sweating pay.

Base pay's importance rose only slightly through the recession, as people put more relative importance on the job challenge/responsibility and job stability. Only in 2005 did the importance of base pay, cited by 48% of staffers as important, approach today's levels. That might have been about the time IT pros gave up the notion that the bonus bonanza of 2001 would come back, making a raise of a couple of percentage points more important.

Look at what fell on IT staffers' priority lists since 2009, and it's not a healthy picture: challenge/responsibility (down 8 points from 2009, to 39%), working on new, innovative IT (down 11 points, to 20%), and working with leading-edge technology (down 5 points, to 21%). Back in 2001 "challenge" was cited as a priority by 64% of staffers, working on innovative IT by 21%, and working on the latest technology by 29%. The upshot is a worrisome lack of excitement about technology.

chart: What matters most to you about your job?

How Promising Is Tech?

More than half of survey respondents--56% of staffers and 53% of managers--think IT isn't as promising a career as it was five years ago. That's a discouraging stat, but in 2003, the first year we asked that question, 74% of staffers thought it wasn't as promising. Today, 66% of managers and 60% of staffers are satisfied or very satisfied with their jobs overall. So when it comes time to advise their children, nieces, nephews, and friends about IT as a career choice, there are a lot of less-than-thrilled IT pros out there who will likely steer them in another direction.

Brian Siler, another of the IT pros we cited earlier, was laid off after more than 15 years at Hilton, but he's not down on his prospects. "If I just wanted a typical corporate job, I feel I could go get one," Siler says. "I think in a certain sense the economy was an excuse for this."

"This" is a startup called BandTones, which is creating services focused on mobile marketing, such as text messaging related to real estate. To supplement his bare-bones startup salary, he's doing occasional small business projects, like networking for a dentist office, developing an iPhone app for a small company, and working on a touch-screen kiosk project.

But what has him excited is the chance to build a business and broaden his skills, whether it's forecasting revenue or creating sales presentations. Working directly with his former boss, Tim Harvey, "I'm learning a lot," he says.

Looking at whether IT generally is a promising career might be the wrong approach. Better to evaluate the industry where you'll work in IT. The industry has a huge impact on salary, and having industry-specific knowledge and experience is only rising in importance.

Eight industries in our survey pay median IT staff compensation of $100,000 or more. Leading the group is the securities and investment industry, at $111,000. Eight industries also pay median IT staff comp of less than $80,000. Education pays the least, at $61,000, followed by nonprofits and state and local government. Federal IT staffers, though, do fairly well, at $98,000 median pay. Manager pay follows the same pattern.

Keeping Your Talent

IT pros aren't job hoppers, for the most part. Two-thirds of staffers have had just one or two employers over the past 10 years. Given that a lot of people, like Morgan and Siler, had to switch jobs because of layoffs, that's a very high number. Among managers, 72% have had only one or two employers in that time. Consider those stats alongside the high priority many IT pros put on job stability, and there's a lesson for technology leaders: Even your top talent probably wants to stay, as long as you don't mess things up. Keep base pay reasonable, let your people know their work's important, make things challenging, and you're well on the way.

As for those high performers you do lose, what are the biggest reasons? Higher pay is overwhelmingly the answer--cited by 70% of the more than 7,300 IT staff and managers who say they're actively or somewhat actively looking for a new job. That 7,300 number alone is worth noting: 41% say they're looking this year, compared with 34% two years ago. The job market's not great, but it's not moribund anymore. The other factors cited by those looking for a new job include more interesting work, personal fulfillment, and disenchantment with the current management and culture.

Karen Garcia is one of those long timers, having worked almost 19 years for software maker BMC. Her story, mentioned earlier, is one of promotions and new challenges. She became program management office director two years ago, then CIO Mark Settle asked her to take on a new role: IT chief of staff. "I said, 'That sounds awesome. What does it mean?'" Garcia recalls.

It meant applying nuts-and-bolts management discipline to IT, touching a range of areas including budgeting, vendor oversight, asset management, purchasing, and compliance. Garcia saw the opportunity but had some hard lessons to learn about how much change an IT organization can digest at a time. "If you think you're going to get something knocked out in a very short time, you're going to get frustrated," Garcia says. "I got frustrated."

A former programmer, Garcia thinks she has a much deeper understanding now of the business of IT, which could let her keep moving up in the management ranks, or into a non-IT role.

And that may be one of the lessons for IT pros: The best opportunities often lie at the edge of two disciplines. People like Garcia can blur business and IT skills, and those like Carr can combine big data and statistical prowess. Others will blend their deep technology and industry knowledge. There isn't now and never will be a single path to success in IT.

It has been an exhausting, stress-filled, and exciting 10-year journey for most IT pros. Don't count on the next decade being any less turbulent.