June 10, 2008
IT compensation has
been flat for 12 months and cost-cutting measures might speed the offshoring
of IT jobs.
IT departments, with the exception of those that serve the housing and
credit sectors, have been so far immune to the effects of the economic
slowdown. But new data suggests techies are feeling the squeeze as well—and
significantly so.
IT compensation remained flat in the first two quarters of 2008, found the
2008 Mid-Year IT Salary Survey from Janco Associates, a management
consultancy.
Staff-level IT professionals at large enterprises saw only a .12 percent
increase in their median compensation between June 2007 and June 2008,
according to the survey, while in midsize enterprises, salaries grew only
slightly more, by .49 percent.
Middle managers in IT saw similar salary stagnation, with a 1.18 percent
growth in mean income in large enterprises in the last 12 months and an
essentially nonexistent .01 percent growth in midsize organizations.
"I've talked to 40 different organizations in the last few weeks and they're
very concerned," said Janco CEO Victor Janulaitis. "They don't know what's
going to happen to the economy and they're putting things on hold."
Support roles most at risk
Enterprises have slowed down and in many cases eliminated discretionary
spending by IT, the Janco survey found, something that has resulted in fewer
projects being initiated, the use of consultants being reduced, if not
eliminated, and a slowdown of initiatives that had already been approved.
"CIOs' management is telling them to pull their horns in," Janulaitis said.
"IT is now in a place where people are thinking that with all of these great
tools out there, do we still need centralized processes? Do we have to have
that infrastructure ourselves?"
Janco's data found that IT hiring demand is the lowest it has been since
2004, with increases in compensation for most IT professionals having been
outpaced by growth in the cost of living. Hiring is also being limited to
key replacements, and some roles are more at risk than others.
"They're looking first at the administrative positions, those not in a main
line development role. Supporting roles are the most at risk," said
Janulaitis, speaking of jobs that large IT organizations were offshoring
long before fears of a recession struck. "In a way, this recession may
expedite processes that were already in place."
Janulaitis' comments have been echoed by other analysts, who have predicted
that upper IT management will respond to cost-cutting pressures by looking
to positions that have historically been deemed offshorable.
"CIOs are asking, can we outsource? Can we get it for a lower cost?" said
Josh Farina, an analyst at Technology Business Research. "With so much help
and support services being offshored, there is a lot of risk in these
roles."
Original Article
