Tech Salaries: The Good News (And the Bad)

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[Note: see IT salary chart at the bottom of this page.]

The Dicesalary survey completed in January 2008, based on 19,000 tech professionals, offers some good news and some not-so-good news.

On the cheery side:

• IT wage growth in major metropolitan areas like Atlanta and Boston, and especially Silicon Valley, keeps chugging along. (Here’s a chart of IT salary growth by city.)

• While the days when tech salaries were zooming upward are behind us – at least for now – certain IT specialties are still enjoying healthy boosts. If you’re a project manager or an MIS manager, employers will show you the money.

• Overall, tech workers are still some of the best paid workers across a wide array of professions. The 2007 average tech salary was $74,570.

• Based on U.S. Bureau of Labor data, the unemployment rate for IT professionals remains blissfully low, at 2.1 percent, versus a national average of around 5 percent.

But everything’s not rosy. Check out these gloomy tidbits:

• Between 2006 and 2007, the average IT salary grew a measly 1.7 percent – not even keeping up with inflation.

• IT newbies – workers with less than 1 year of experience – suffered a 2.2 percent declinein average salary, to $41,457.

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Scot Melland, CEO of Dice, says that the IT sector has proven resilient in the face of dark economic headlines.

“There’s definitely a lot of gloomy news out there for the economy as a whole, but if you look at the tech sector in particular, the news is actually a little bit better – especially in the labor market.”

The low IT unemployment in tech, at 2.1 percent, “shows the tightness in the labor market,” Melland tells me. He notes that economists talk about “full employment” as any figure less than 4 percent; by that measure, tech professionals are a highly desired bunch.

After all, employment will likely never get to that mythical 100 percent figure; if the 2.5 percent tech unemployment figure is to be believed, virtually every qualified IT professional who wants a job, has one. (Whether that job is their dream job is another question.)

More than 93,000 tech job openings are posted at Dice, with the average job listing staying up for about 14 days, Melland says. New jobs are constantly opening up. “You might see 90,000 plus positions, but those positions are always changing.”

(The total number of U.S. technology professionals is 6-8 million, by Dice’s count, with other organizations putting the number at around 10 million.)

As Melland sees it, the stagnant wage growth between ’06 and ’07 is not as bad as it seems. The paltry 1.7 percent increase was a slow down after the robust increases of ’05 and ’04; such salary boosts simply couldn’t be sustained.

Moreover, bonuses and stock options are not reflected in the salary figures, he says. “And there’s more use of bonuses and stock options than in years past.” These one-time rewards are less risky for employers than ongoing salary increases.

The Dice salary survey shows that it’s a great time to be a project manager or MIS manager. These specialties saw the biggest increases. Melland says that demand for project managers has increased 25 percent per year for the last two years.

“Those project manager positions, and architect positions, are less impacted by the threat of outsourcing,” he says. Many companies still want their project leader domestically based, even if they ship development work overseas.

The year 2008 should be at least a reasonably good one for IT workers, Melland predicts.

“I think we’re going to see a continued tight job market with low unemployment. The tech sector has not been impacted by the slow down in the economy,” he says. “On the salary front, it’s difficult to predict, there’s all sorts of other factors that work in there. But I think it’s fair to say that there will be healthy job market for tech growth throughout 2008.”

Salary figures provided by Dice:

(Next page: Salary by region/city, by area of expertise, by industry sector, and by years of experience.)

• Note the significant salary boost for Project Managers. Also, that’s not a mistake for Systems Developers – they really saw a more than 12 percent increase.

JOB TITLE:	2005	2006	2007
IT Management (CIO, CTO)	$102,326	$106,272	$107,830	Project Manager	$93,009	$96,475	$101,292	Developer: Systems	$72,732	$78,476	$88,361	Database Administrator	$81,301	$85,441	$85,092	Software Engineer	$78,807	$83,524	$84,122	Business Analyst	$77,158	$82,288	$84,101	Developer: Database	$73,768	$79,911	$83,163	Developer: Applications	$73,636	$78,037	$79,421	Developer: Client/Server	$75,941	$74,602	$78,173	Programmer/Analyst	$65,174	$69,757	$71,623	Quality Assurance Tester	$64,486	$68,280	$68,952	Web Developer/Programmer	$61,261	$65,327	$68,571	Network Engineer	$65,122	$67,202	$68,391	Systems Administrator	$63,698	$64,917	$66,388	Network Manager	$65,122	$67,202	$64,638	Technical Support	$47,259	$49,347	$49,384	Desktop Support Specialist	$42,204	$44,909	$46,458	Help Desk	$37,397$39,430	$41,154	PC Technician	$34,563	$36,848	$36,974

(Next page: Salary by region/city, by area of expertise, by industry sector, and by years of experience.)

(Salary figures provided by Dice.)

Metro Area IT Salaries, 2005 – 2007

Some regions are stagnant (and some are actually down) but Silicon Valley continues to rise:

METRO AREA:	2005	2006	2007
Silicon Valley	$85,430	$90,310	$93,876	Boston	$79,211	$80,308	$83,465	Baltimore/ Wash. D.C.	$75,593	$79,911	$81,750	Los Angeles	$73,911	$79,583	$81,039	New York	$76,382	$80,006	$80,770	Seattle	$73,105	$79,787	$79,636	Denver	$74,823	$77,317	$77,846	Dallas/Ft. Worth	$71,494	$74,656	$76,560	Chicago	$71,496	$75,154	$76,407	San Diego	$72,163	$79,416	$75,994	Atlanta	$73,684	$72,323	$74,822	Philadelphia	$71,881	$72,786	$74,442	Hartford	$72,265	$71,796	$73,372	Houston	$68,358	$71,526	$72,733	Phoenix	$70,023	$74,976	$71,246	Detroit	$64,154	$67,080	$67,271

Top Average Salaries for Popular Technology Skills, 2007

Some highly paid tech specialties:

AREA OF EXPERTISE:	2007
ETL – Extract, Transform and Load	$96,559	ERP – Enterprise Resource Planning	$95,589	SOAP – Simple Object Access Protocol	$95,387	Business Intelligence	$94,317	Data Warehouse	$93,200	ITIL	$92,663	JBoss	$92,518	Sarbanes Oxley	$91,542	Korn Shell	$90,948	Siebel	$90,833

Tech Salaries by industry sector, 2005 – 2007

The difference in pay levels between industry sectors is very significant:

INDUSTRY SECTOR:	2005	2006	2007
U.S. Average	$69,700	$73,308	$74,570	Financial-Insurance	$76,092	$82,504	$82,961	Computer Software	$74,730	$77,582	$79,756	Telecommunications	$72,430	$78,003	$77,312	Government-Defense	$69,078	$75,086	$77,187	Medical-Pharmaceutical	$71,714	$72,717	$74,689	Manufacturing	$66,732	$71,878	$73,470	Internet Services	$65,426	$71,854	$71,538	Computer Hardware	$66,462	$69,987	$70,740	Retail-Mail Order-E-Commerce	$55,909	$63,830	$66,782

Average Salary by Years of Experience, 2005 – 2007

Along with project managers, experienced professionals are in demand:

YEARS OF IT EXPERIENCE:	2005	2006	2007
Less than 1 year	$37,471	$42,414	$41,457	1-2 years	$41,229	$46,935	$47,648	3 – 5 years	$52,363	$55,922	$58,037	6 – 10 years	$68,355	$72,707	$73,449	11 – 14 years	$80,933	$83,907	$86,426	More than 15 Years	$86,332	$90,125	$93,107

Average Salary by Level of Satisfaction, 2007

Not surprisingly, better paid workers tend to be more satisfied:

LEVEL OF SATISFACTION:	2005	2006
Very satisfied	14%	$93,065	Somewhat satisfied	39%	$81,684	Neither satisfied nor dissatisfied	15%	$71,091	Somewhat dissatisfied	21%	$63,612	Very dissatisfied	11%	$51,560