Good news for IT: Bonuses are back, pay rates are up

Midyear survey reveals that IT salaries and hiring are slowly rising as companies gradually bring more operations in-house

Compensation and hiring for IT professionals are gradually rising and have just reached January 2008 levels, according to a study from Janco Associates titled "Mid-Year 2012 IT Salary Survey." Layoffs have tapered off, companies are bringing more IT operations back in-house, and IT pros are even seeing bonuses. However, hiring overall will remain soft in coming months, particularly with the presidential election in the United States and economic turmoil in the European Union.

The report is a mixed bag for IT pros. Enterprises are bringing help desks and data center operations back under their control to improve service levels and reduce costs, which has led to higher demand for data center managers.

According to Victor Janulaitis, CEO of Janco, several factors are driving that shift away from offshoring. Among them, "cost savings versus customer service now is starting to weigh in favor of on-shore operations," he told InfoWorld. "[Also], customers are getting very frustrated with off-shore help desks where non-native speakers do not communicate well with U.S. English speakers. Many help desks already have U.S.-based second-level support to deal with customers who do not interact well with off-shore help desk support."

Additionally, Janulaitis said that "high unemployment rates are tugging at the corporate conscience of senior management."

Demand for IT executives (leaders and staff IT professionals, in Janco parlance) at midsize companies has also been particularly robust, a precursor for future IT staff hiring and spending, according to the report. Yet companies are hiring more contractors and part-timers to work on key projects, which is great if you're a freelance IT worker but less so if you're hungry for full-time work.

"Our main conclusion is that for information technology, the recession has not bottomed and that hiring of IT professionals will remain soft for the next several months," said Janulaitis. "However there still are a number of companies who will proceed to expand IT departments in anticipation of the start of a strong recovery in the first and second quarters of 2013."

Mean compensation (including bonuses) for all IT professionals has increased from $77,229 to $78,759 since 2011. IT executives at large enterprises are now earning a mean salary of $140,515, representing a slight decrease from $140,879 in late 2011. IT execs at midsize companies, meanwhile, have seen a slight increase since 2011 from $124,967 to $124,363.

IT professionals have witnessed changes to benefits in the past year, most of which are positive though still generally below levels from a couple of years ago. Among them, there was a 5 percent increase in the number of employees receiving personal performance bonuses and a 4 percent increase in those receiving enterprise-based performance bonuses. "Bonuses are a leading indicator that companies are looking for enterprise revenue improvements and want to motivate employees to focus on improving the company's bottom line over and above everything else," Janulaitis said.

According to the study, 92 percent of IT professionals now have health insurance, up from 86 percent in 2011. (The number was at 95 percent in 2008.) However, according to the report, IT pros are contributing more to those costs. Sixty-five percent of IT pros enjoy 401(k) benefits, up 2 percent from 2011, though down from 71 percent in 2007. There's been a 2 percent increase in work-related trips (trade shows, training, and off-site meetings, for example), up from 49 percent last year but overall down 63 percent in 2007.

Meanwhile, there was a 2 percent dip in the number of IT professionals with flex time, down from 56 percent in 2011 and way down from 67 percent in 2008. Only 14 percent of IT professionals receive stock options, down 4 percent since last year and down 31 percent from 2006.

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