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IT salaries flat overall, survey finds

Average staff level salaries at large organizations drop slightly as expensive positions outsourced, consultant says.

Compensation for information technology professionals overall hasn't changed much in the past six months, but at the largest companies executives are faring better than grunts in the trenches.

Those are among the findings of an IT salary survey released Tuesday by consulting firm Janco Associates. The report, which involved more than 800 organizations across the United States and Canada, found that average total compensation for IT positions overall inched up 0.2 percent from January to $77,249.

At large organizations, such as companies with $500 million or more in annual sales, average total compensation for IT executives rose by 1.6 percent to $140,760, but fell for IT staff by 0.3 percent to $65,247.

One reason for the decline in compensation at the staff level is that companies continue to farm out costlier jobs such as database specialist, said Victor Janulaitis, chief executive of Janco Associates. "As people have outsourced, they have outsourced the more expensive functions," Janulaitis said.

Outsourcing refers to farming out tasks to a separate company. If that company's operations also are in a lower-wage nation, the outsourcing is called offshoring. Outsourcing seems likely to grow. A recent study from consulting firm DiamondCluster International found that 74 percent of buyers expect their use of IT outsourcing to continue to increase in the coming year, up from 64 percent in 2004.

The Janco report adds to mixed news about pay and the broader job climate for tech pros. Pay for certified technical skills grew 6 percent in the first three months of 2005 and 4 percent for the 12 months ended April 1, according to a recent study by research consultancy Foote Partners covering North American and European IT workers. But salaries for technology professionals in the United States fell 2.6 percent in 2004 to an average of $67,800, according to a study from job board Dice.

Relatively flat salaries overall suggest IT workers are losing ground economically, at least in the United States. During the first four months of 2005, inflation in the United States rose at an annual rate of 4.8 percent.

Janco looks at base compensation along with extras such as bonuses and stock options. Although it has been better to be in a corner office than in the cubicles at large organizations, chief information officers themselves at those organizations didn't have a lucrative first half of the year. Their average total compensation dipped from $169,601 in January to $168,424 in Janco's mid-year survey.