We're in the Money By Kathleen Melymuka This year, the skills gap paid off. After years of settling for crumbs while the guys on top got big pieces of the pie, information systems professionals across the board are finally in the money. Eleven of 26 positions surveyed in Computerworld's Annual Salary Survey reported average increases of 10% or more, and only five positions received less than 5% increases. The big winners were the up-and-comers: systems analysts got bigger percentage raises than senior systems analysts, and systems programmers beat out senior systems programmers for percentage raises. Similarly, programmer/analysts edged out senior programmer/analysts, and database analysts beat database managers in terms of percentage increases. Bigger raises in the lower ranks is likely a reflection of the premiums being paid for newer technology skills. "Senior systems analysts and programmers tend to be old-school types doing Cobol and mainframes," says David W. Markle, manager of information technology at AlliedSignal, Inc. in Colorado Springs. "The cutting-edge technology on the application development side today is Microsoft [Visual Basic], C++ [and] Java, and the younger generation tends to have a better handle on that." Speaking of hot skills, webmasters and managers of Internet/intranet technology made the survey for the first time this year, and both are highly compensated, no doubt because they're in great demand. "Web skills are hardest to find," says Jim Stewart, vice president of IS at Duff & Phelps Credit Rating Co. in Chicago. "We just hired a new webmaster, and it was one of the most difficult job searches I've ever done." As usual, chief information officers got a huge piece of the pie: Their total compensation increases averaged 28%. But within that average, raises varied wildly. In the insurance industry, CIO salaries hardly changed; in business services/IS, CIOs averaged an incredible 60% salary increase; and in transportation, CIO salaries were down 19%. CIOs took a big wedge, but the whole pie was clearly much larger — big enough to provide double-digit increases for managers of voice/data communications, systems analysts, communications specialists, systems programmers, LAN managers, project managers, programmer/analysts and computer operations managers. Salaries rose an average of 10% at Duff & Phelps. "The networking and the Internet side are where the biggest jumps come from," Stewart says. "It's just a supply and demand kind of thing." Hiring new people at better salaries affects the entire salary structure, Stewart says. "It puts more pressure on people to just not stay static. It seems that the way people are making money is by jumping jobs." Stewart tries to head them off by balancing the pay structure at the end of each year. "We try to do justice," he says. "We give bonuses and raises to keep people from leaving." The pressure of rising salaries pushes CIOs to save money elsewhere, so they try to develop economical, high-impact applications, says Bob Nixon, director of information services at Jantzen, Inc., an apparel manufacturer in Portland, Ore. "The company says, 'We're spending all this money on IS. Is it worthwhile?' That's the challenge, to say, 'It's worthwhile, and here's why.'" Client/server technology is the answer, Nixon says. "Where we can provide the best benefit is in applications that are taking data off the mainframe and presenting sales information online to managers and executives in real time so they can see trends developing early on." But ironically, moving to client/server applications increases demand for newer skills. In Nixon's case, it's SAP skills. And that pushes salaries higher. Few would deny that the high salaries are deserved, because nearly everyone is overworked — another reason salaries are spiraling upward. "It gets harder every year," Stewart says. "We can't hire as many as we need, so each person has more on his plate. So we have to compensate for that. We try to hold the overtime down, but everybody has the feeling that we're kind of drowning." The relationship between salaries and turnover rates bears this out. Salaries in the manufacturing industries average higher across the board than those in nonmanufacturing industries, but the average manufacturing turnover rate also is higher. In fact, one of the highest turnover rates is found in computer hardware, software and peripherals, which also pays among the top salaries in systems development and technical areas. Markle says the high rate reflects both sides of the turnover issue — employees being let go and others jumping jobs. "Today's tech world is super cutting edge," he says. "People are looking for the sharpest, fastest-growing individuals for the team, and there's a direct correlation [between high salary and high turnover] because people can't hack it. On the other side, when you are good, you're good, and you're going to get a lot of offers." Turnover brings about raiding, particularly by consulting and contracting firms. "In the last year or two, [raids] on internal IT staffs have been escalating," says Eric Schrumm, director of information technology at Rayonier, Inc., a wood and paper products company in Stamford, Conn. "We're in the process of reviewing our salary structure with an eye toward making sure we're competitive." But that isn't always possible. "There's a big difference between a corporation whose revenue base is not coming from IS and a consultancy, which is IS," Stewart says. "We know we can't compete on salaries. The way we try to combat that is offering people a good workplace and a variety of projects. Everyone here gets to be a micromanager and have a lot of autonomy, and that's really key for IS people these days. We have a very low turnover rate, so I guess it's working." Another way to reward people without throwing the salary structure out of whack is to give bonuses. The survey found that big companies were more likely than small companies to give bonuses, and the bonuses were more likely to be larger. Bonuses based on company performance were the most common, followed by individual performance bonuses. Looking ahead, Nixon says he'll probably have to raise his employees' salaries about 5% over the next six months to keep pace with new recruits. But he says he'll try to offset those costs in other areas. "I do what I can to keep costs down," he says. "In the back of my mind I always have to be thinking, 'What if the company decided to outsource IS?' So you think about how to provide better service and response than an outside service could. It's a balancing act." By Kathleen Melymuka Melymuka is a freelance writer in Duxbury, Mass. Copyright © 1997 @Computerworld. All rights reserved. Reproduction in whole or in part in any form or medium without express written permission of @Computerworld is prohibited. Computerworld and @Computerworld and the respective logos are trademarks of Computerworld, Inc.
