Study: Salary gloom ahead for IT workers

Starting wages for techies will fall next year, and pay for jobs that boomed in the '90s will keep on dropping, says a recent study. But there's a bright spot for some in-demand pros.

Ed Frauenheim Former Staff Writer, News
Ed Frauenheim covers employment trends, specializing in outsourcing, training and pay issues.
Ed Frauenheim
3 min read
The starting salaries of U.S. information technology workers are projected to fall an average of 1.6 percent next year, according to a new study by Robert Half Technology.

On the bright side, wage increases are expected in high-demand specialties such as information security and systems audit, the IT staffing company said in the report.

"While average starting salaries for most positions will remain little changed in 2004, those occupations that experienced extensive growth in the late '90s continue to see a slight decline in compensation," Katherine Spencer Lee, executive director of Robert Half Technology, said in a statement. "Increases in base pay will be reserved for the most sought-after specialties where skill shortages still exist."

Lee said chief information officers remain cautious in their hiring efforts and are taking a very thorough approach to evaluating candidates.

The report, published Tuesday, follows others that have outlined gloomy prospects for IT workers. Earlier this year, economist Jared Bernstein of the Economic Policy Institute found that inflation-adjusted wages for professional and technical workers had fallen and that unemployment for mathematicians and computer scientists had risen to its highest level since the Bureau of Labor Statistics started collecting that data in 1982.

What's more, the American Electronics Association trade group said in a report this year that the U.S. high-tech industry had trimmed its work force by 10 percent--to 5.1 million jobs--between January 2001 and December 2002.

The downturn in IT salary outlook comes amid a drop-off in technology spending. Critics also blame the outsourcing of tech work to countries such as India and the presence of foreign workers in the United States on L-1 and H-1B visas.

But not all the news for the tech labor force this year has been dour. Research firm Meta Group's survey of North American IT managers found that base salaries continued to rise by 5 percent on average and that workers with certain "hot" skills--such as computer system architects, senior Web developers and senior network designers--could snag pay increases of 8 percent to 10 percent.

In recent months, reports have not painted a consistent picture about future IT spending.

The Robert Half Technology report is based on an analysis of thousands of job orders managed by the company's U.S. offices. It estimates that data security analysts will see the greatest starting salary increases of any single job classification in 2004, according to the report. Their base compensation is expected to rise 2.1 percent, to the range of $67,000 to $90,750 annually.

"Network security concerns continue to be a priority for businesses of all sizes," Lee said. "There is strong demand for IT professionals who can manage everything from assessing potential network vulnerabilities to integrating virus protection, intrusion detection and other components into an enterprisewide security strategy."

Average starting salaries for local area network (LAN) administrators will decrease by 4.5 percent next year, bringing base compensation to the range of $43,750 to $62,500 annually. Meanwhile, base compensation for desktop support analysts will drop 5.3 percent, with starting salaries in the range of $47,000 to $65,000, the survey found.

Average starting compensation for applications architects is projected to increase 1.9 percent in 2004, to between $73,250 and $104,250, according to Robert Half. Starting salaries for senior Internet/intranet developers also are expected to increase 1.9 percent, to the range of $67,250 to $96,000. Systems auditors will earn average starting salaries of between $60,750 and $77,250 annually, a gain of 1.8 percent over 2003 compensation.