2005 InfoWorld Compensation Survey

At first glance, results from the 2005 InfoWorld Compensation Survey show an industry looking up. As company performance has risen, so have salaries and bonuses in the IT sector, suggesting the downturn is over. Jobs are to be had. Purse strings have loosened. In fact, many aspects of our survey of 1,510 IT professionals indicate that “better” may be the norm. Yet beneath the surface, dissatisfaction and uncertainty threaten to spoil any celebration of IT’s return to square 2001.

If anything, a closer look at survey responses reveals that years of tackling mounting workloads with less

money and depleted staffs have taken their toll on IT morale. Interdepartmental relations remain strained, as the business side’s cost-center approach to IT has many survey respondents questioning their ability to get the job done. Despite an overall expected increase in expenditures this year, IT departments in many sectors will in fact face even tighter budgets.

And with offshoring on the rise, fear that one’s job could move overseas threatens to further polarize many companies’ org charts. Taken together, such factors provide significant evidence as to why, despite all signs of an uptick, IT professionals have grown increasingly dissatisfied with their lot.

Going by salary alone, the warming trend hinted at in last year’s survey has proved true, as the overall average reported salary increased for the first time in three years, up 2.7 percent. The 12.2 percent average gain in government and educational organizations and the 3.1 percent average gain in the private sector have brought IT salaries back up to 2001 levels. Workers at technology providers, however, lagged behind their peers; only 58 percent reported an increase in pay, as opposed to 70 percent for IT workers overall, despite their being significantly more likely to have received a raise this year than in 2004. The fact that IT salaries in the tech sector remained relatively flat despite a 50 percent increase in average reported gross company revenue may be more indicative of the depth of the recent tech-market trough than a begrudging of compensation dollars. This year’s survey indicates a 57 percent infusion of cash into tech companies’ 2005 IT budgets, a hopeful sign of future salary growth.

Pay for performance

Bonuses jumped this year, up 19.7 percent, making 2005 the year of the returning bonus. When combined with salary, bonuses accounted for an average increase in compensation of 4.2 percent. This parallels upward trends in some market sectors, as significant gains were seen in company-performance awards. Yet the percentage of respondents who reported no change in bonus remained at 70 percent — as did the 44 percent of respondents who received no bonus at all. In other words, this year’s bonus gains were the result of fatter, not more, checks. And where did these big bonuses go? Upward, of course, to senior management. Managers further down the chain of command tended to receive bonuses for increased workloads.