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IT pros reap big salary gains
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December 1, 1998 by Lynne Castronuovo and Susan Ellerin |
From...
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(IDG) -- You know all the talk you hear about network professionals commanding top dollar? Believe it.
The 1998 Network World Salary Survey, co-sponsored by Deloitte Consulting, shows total compensation went up more than 10% this year from last - and this in a period of almost zero inflation.
In contrast, the average paycheck rose a modest 3.4% between October 1997 and 1998, according to the U.S. Bureau of Labor Statistics. And network staffers still fared better than the average manager or professional, who brought home an extra 5.3% in pay between the third quarter of 1997 and 1998.
Take Robert Traversi, a LAN analyst at liquor distributor Schieffelin and Somerset in New York.
The 27-year-old initially got a 5.5% raise this year, but then netted another 16% when his company merged with another firm and adjusted pay scales. Traversi makes $55,000 now and expects to receive a 5% to 10% raise in January.
To help you see how your paycheck stacks up next to your peers', we surveyed 395 network professionals and focused on salaries for four different job categories: senior IT management, network management, other IT management and IT staff.
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Senior management includes titles such as IT manager and director, vice president and chief information officer. Network management positions comprise network, LAN and WAN manager and director. Other IT management positions include director of the telecommunications, Internet/intranet, engineering and help desk departments, while IT staff jobs run the gamut from engineer to application developer.
Average base salaries range from just under $50,400 for IT staff workers to nearly $68,000 for senior management. Across titles, more than 40% of IT professionals earn bonuses, stock and overtime. These extras typically account for 12% of total compensation, and sometimes even up to a generous 30% for the most highly paid IT professionals.
Bigger is better
Because the size of a company often affects pay, we separated respondents into three groups, based on the total number of employees in their organizations: more than 1,000; 100 to 999; and less than 100. Most readers work for profit-oriented companies, although some work in government, education and other nonprofit organizations.
Not surprisingly, IT professionals employed by large companies tend to command higher salaries than their small business counterparts. For example, network managers for companies with more than 1,000 employees make about $10,900 more than their peers in smaller firms.
The number of employees an IT professional supervises also makes a difference in compensation. Even within the largest of organizations, network managers who supervise more than five employees bring home about $21,000 more than their colleagues who oversee fewer people.
While network professionals as a whole saw their pay rise an average 10.1% from last year, bigger organizations tend to offer more generous raises for senior IT managers and network managers. However, in organizations with fewer than 100 employees, other IT managers and staff workers appear to be disproportionately highly compensated and receive extraordinarily high raises on average. Many small firms don't have an IT department, so perhaps these employees run the network on their own and are compensated accordingly.
Mapping out salary
As you would expect, salaries vary from region to region. This is often a result of an area's cost of living and job market. However, some variation may be attributed to differences in company size and titles represented in the regional sample. To take this into account, we created regional composites that essentially leveled the playing field by making each region compare proportionately to the country as a whole. These controls led to some interesting results.
Overall, IT professionals in the Mid-Atlantic region of New York, New Jersey and Pennsylvania are the highest paid, commanding a 13.5% margin above the national norm. In contrast, pay is lowest in the South Atlantic area - almost 6% below average.
The fat salaries in the Mid-Atlantic region are no surprise to Ron Miskie, the founder and chairman of IT consulting firm Knowledge Transfer International in New York.
Miskie jokes that he's the only person in his company who isn't getting a 10% to 15% raise in 1999. Salaries for his 50 or so employees and 125 consultants who specialize in Web design, intranets, training and business analysis are going up because of a tight labor market in the area.
When it comes to fringe benefits, Miskie says employees want it all: a good health plan, three to five weeks of vacation, a pension plan and stock options. "You have to come up with the whole package now to compete," he says. Perhaps he should consider moving his business to the South.
You can't buy loyalty
To see how loyal IT workers are, STAT Resources, a Boston strategic research and consulting firm, used a special classification system to divide survey respondents into one of four groups:
- Seekers - Actively looking for a new position.
- Explorers - Would follow up if they learned about an interesting job through an advertisement or another person.
- Approachables - Would consider an opportunity only if they were personally contacted.
- Loyalists - Cannot envision changing jobs in the
foreseeable future.
Less than half of survey respondents are actively exploring job options, but 12% are currently job hunting. Another 12% are fully committed to their current employers.
With 26 years of employment at the Federal Aviation Administration, Robert Wheeler falls into the loyalist camp. He isn't going anywhere unless something pretty lucrative comes along. Wheeler, 46, is managing an IT upgrade to the air traffic control system in Fort Worth, Texas, an initiative that has already taken two years and may take another two before it's done.
On the other hand, Matthew Harrison is one survey respondent who's ready to leave his senior systems network engineer position at the Federal Home Loan Bank in Seattle. "I could quit my job today and have a new job by Tuesday," he says.
Harrison knows this from experience. The 29-year-old has changed jobs three times in the past four years, but now he's tired of job hopping and is looking for a place where he can put his feet down and stay. He recently told his supervisor that he plans to resign but is giving the bank plenty of time to find his replacement while he does a careful job search.
In general, the top performers recognize their own worth and are more likely to classify themselves as Approachables rather than Loyalists. In today's job market, the most uniformly valuable employees may be the ones who are generally happy in their jobs but are open to be courted by a competitor.
To examine how salary influences loyalty, we found the median salary for respondents in each of the four main job categories and grouped them in half based on their compensation.
Overall, almost two-thirds of the Seekers fell into the lower compensated halves of their job groups. However, more than 40% of Loyalists were also among the lowest paid of their colleagues, a finding that reinforces the adage "money isn't everything."
The profiles of the single highest and lowest paid respondents illustrate the typical differences between Approachables and their less-loyal colleagues.
Indeed, salary isn't a top priority for Schieffelin and Somerset's Traversi, who says he could easily add another $25,000 to his $55,000 by joining a Wall Street firm. "I could go out and get a job in two seconds if I wanted to," he says.
The 27-year-old would entertain another job offer if an employer approached him, but the position would need to offer exciting, challenging opportunities to lure him away. Most important to him is "the freedom to do different things in my job."
Traversi also appreciates his current firm's tuition reimbursement and company-funded training, which he used to gain HTML, Internet and WAN skills.
Besides, Traversi has a two-hour commute from Long Island to Manhattan, so he's not keen on a job that would require him to return to the office at all hours to put out fires.
And while Federal Home Loan Bank's Harrison is looking for a new job, money isn't at the top of his list either. Based on his experience in the job market, he says that if a job offer appears too good to be true, it probably is. If a company is offering a sky-high salary and a huge bonus, that might be a tip-off the company has internal management problems and has trouble keeping people.
Harrison makes $60,000 per year with another $10,000 in bonuses. "I'm looking for professional growth," he says. Beyond that, he wants to work some place with good management and a cohesive working environment.
Perception vs. reality
Few people in the lower end of the salary bracket have rosy illusions - the vast majority of those who earn below median salaries believe they are, in fact, being paid less than their peers.
However, those who are paid well compared to their counterparts are far less in touch with reality. Almost half of the network professionals who earn more than the median figure for their peers in similar-sized organizations believe they're underpaid. And the respondents with such beliefs are twice as likely to be seeking new jobs. For such employees, perception - especially negative perception - is obviously more important than reality. Perhaps showing them this article may help you convey to them that they're being paid fairly.
In addition to salary, benefits are another important factor in the overall compensation equation. The benefits of greatest importance to respondents across job titles are family health insurance, flexible work schedules and dental insurance.
Interestingly, some benefits are more important than others depending on professionals' loyalty to their employers.
On the whole, Loyalists are twice as likely to regard health insurance as important. In contrast, Seekers and Explorers are more likely to regard tuition reimbursement as critical. Otherwise, benefits are rated fairly consistently by IT professionals, regardless of their relative pay, loyalty or title.
1999 expectations
Despite the fat raises network professionals have earned over the past two years, expectations for 1999 are more modest. After all, predictions are a crap shoot and respondents probably don't want to set themselves up for disappointment.
Across the board, professionals expect their total compensation to increase by about 6.5%. Senior IT managers are slightly more optimistic, pegging their predicted raises at just more than 7%.
Schieffelin and Somerset's Traversi expects to get a 5% to 10% raise next year. As for the FAA's Wheeler, he says his salary is determined by a complex federal formula. Because he's in the midst of a title change, he's not sure what kind of a raise he'll be getting.
Stuart Helm, a LAN operations team leader at building and industrial manufacturer Masonite in West Chicago, Ill., says the workers he supervises will receive 2% to 4% raises in 1999, which is about the same as 1998. He points out that raises in manufacturing tend to be smaller than in other fields.
Obviously, IT professionals at Knowledge Transfer International are slightly more fortunate, and Miskie no doubt hopes they are grateful.
Castronuovo is research manager and Ellerin is president of STAT Resources, a Boston strategic research and consulting firm that assists clients with improving the quality of their service delivery systems, products and customer and employee communications. STAT can be reached at www. stat-resources.com. Neal Weinberg, Network World's features reporter, also contributed to this article.