Tech workers' dough isn't rising

The salaries of tech workers have been stagnating for more than a year, and new research shows that paychecks in some tech hubs are shrinking.

2 min read
The salaries of rank-and-file technology workers have been stagnating for more than a year, and new evidence shows that paychecks in some tech hubs are actually shrinking.

According to a new survey by staffing consulting firm Matrix Resources, salaries declined an average of 2.1 percent for non-management information technology professionals hired during the third quarter. The survey concentrated on tech workers in Atlanta, Dallas, Phoenix, New Jersey and North Carolina's Research Triangle Park.

In those markets, the average new hire with at least two years of experience received a starting salary of $71,549. That makes tech workers among the most generously compensated workers in the United States, but they are increasingly losing ground to non-tech workers as the economy stalls and tech companies lay off legions of workers.

The survey, released Monday, is one of the first to find that salaries are actually on the decline. Most recruiters and economists have been predicting that tech salaries would merely stagnate after heady growth in the late 1990s.

Although painful for employees who are now taking home smaller paychecks, the survey may be good news for employers. Many of them bemoaned that the salaries of tech workers in the late 1990s got out of control: They had to offer workers huge bonuses and raises to retain them, and others claimed that the high salaries and numerous job offers led tech workers to become downright rude.

"It's a relative buyer's market for IT professionals," said Shannon Brandon, president of field operations for Atlanta-based Matrix. "The combination of layoffs and the slowdown in hiring by IT organizations throughout most of this year has evened out the supply-demand curve.

"Those managers that are hiring IT professionals at this time are finding candidates that are less focused on top dollars, especially if the company can show stability," she said.

The decline for non-management tech workers comes as some of the highest-profile executives get salary boosts. Microsoft Chief Executive Steve Ballmer and Chairman Bill Gates received salary increases and bonuses this fiscal year, as the company weathered a challenging environment and its stock price outperformed the Nasdaq.

Tech workers who took the biggest salary hits in the survey were consultants, business analysts, client server developers and AS/400 developers. Workers in the South also took the biggest hits in the survey, which did not include Silicon Valley or other West Coast tech hubs such as Seattle, Los Angeles and San Diego.

Consultants hired in North Carolina in the third quarter received starting salaries that were 12.2 percent below those of workers who took similar jobs in the second quarter--the largest decrease of any group. Business analysts in Atlanta during the third quarter received starting salaries that were 11 percent below those of workers who started in the previous quarter. Salaries for AS/400 developers hired in Phoenix during the third quarter were 7 percent below that of those hired in the second quarter.