The Schwartz Report

Blog archive

IT Salary Expert Reveals Where Pay Is Headed

Rapid changes in technology and businesses finding they must become more agile if they want to survive means IT pros and developers need to calibrate their skills accordingly. That was the call-to-action by David Foote, founder and chief analyst at Foote Partners, who gave the opening keynote at the annual Live! 360 conference, taking place this week in Orlando, Fla.

Demand for IT pros and developers remains strong for those who have honed their skills on the right technologies. But having strong "soft skills" and knowledge of the business is also more important than ever. However, those who can't keep pace with those requirements are likely to find a more challenging environment in the coming years, warned Foote.

Foote would know. His company has spent the past two decades tracking IT salaries to create quarterly and annual benchmark reports based on data from 250,000 employees at companies in the U.S. and Canada in 40 different industries. The scope covers 880 IT job titles and skills, both certified and non-certified.

Foote's keynote coincided with his most recent findings and analysis published in this month's issue of Redmond magazine. "It's a great time to be working in technology. There's so many jobs, there is so much need coming down the pike," Foote said. Many IT pros and developers, nevertheless, may find those jobs coming in areas they have never considered, he said. One example, as the growth if Internet of Things continues to accelerate, more software experts will need to learn specialized hardware skills.

Likewise, cross-skilling will be critical, he said. Despite the hype, digital transformation initiatives are placing skills premiums on experience in key areas that include architecture, Big Data, governance, machine learning, Internet of Things, cloud, micro-services, containers and security. These areas are among those on this quarter's "hot skills" list, which on average command skills premiums of 12 percent.

Skills-based pay is based on the premium a specific job title commands. The percentage represents the amount of base pay employers will pay for that premium. That pay is guaranteed without targets, but those percentages can fluctuate from year to year, as demand for skills changes. Currently, large organizations are looking to put these digital transformation efforts on a fast track for their business survival, Foote explained.

"More and more companies are creating innovation groups," Foote said. "They are usually not part of IT, they are on their own. They may take people from IT, but they figured out that this has to be a department that sits in the business and they need to be left alone to do their stuff because they are creating the future of the company. These companies are betting that their money on these digital groups as something they need now but they are really going to need five to ten years from now."

Salaries for those at director level who can run these efforts start at $225k with bonuses often 50 percent of base. With stock options, these experts can earn more than $400,000 per year, he said. At the same time, many IT people find themselves working in organizations for many years earning below market rates.

"Don't feel bad if you're basically happy but could do better. Because, as part of my advice here is that you probably need to look for a job somewhere else," Foote said. "There's a thing called salary compression, which if you are in the compensation world, it means that job is growing faster in the market in terms of pay value than the annual increase that you are getting at the company."

The need by companies to become more agile is often leading to more contingent hiring, where instead of employing full-timers, organizations are hiring consultants or those willing to work on a contract basis. "One of the reason we have such an under-employed population out there in the world is that companies are just not hiring, because it's expensive, and they need an agile workforce. They need somebody to come in and get this work done," he said.

Other reasons for turning to the so-called "gig economy" is hiring the right person on a full-time basis is time consuming and complex these days, he noted. Many often will hire those consultants and contract workers on a full-time basis in the future when it makes sense, he added.

To view his entire presentation and see what's in store, click here.

Posted by Jeffrey Schwartz on 12/07/2016 at 1:31 PM


  • How To Configure Windows 10 for Intel Optane Memory

    Intel's Optane memory technology can significantly improve the performance of your Windows 10 system -- provided you enable it correctly. A single mistake can render the system unbootable. Here's how to do it the right way.

  • Microsoft and SAP Enhance Partnership with Teams Integration

    Microsoft and SAP this week described continuing partnership efforts on Microsoft Azure, while also planning a Microsoft Teams integration with SAP's enterprise resource planning product and other solutions.

  • Blue Squares Graphic

    Microsoft Previews Azure IoT Edge for Linux on Windows

    Microsoft announced a preview of Azure IoT Edge for Linux on Windows, which lets organizations tap Linux virtual machine processes that also work with Windows- and Azure-based processes and services.

  • How To Automate Tasks in Azure SQL Database

    Knowing how to automate tasks in the cloud will make you a more productive DBA. Here are the key concepts to understand about cloud scripting and a rundown of the best tools for automating code in Azure.

comments powered by Disqus