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September 3, 2001 (Computerworld) --

As the list of fizzled start-ups grows, so does the pool of talented IT professionals in need of a new gig. But even in the midst of an economic downturn, corporations are still aggressively pursuing business objectives that have an emphasis on technology. And as a result, IT salaries are gaining a little ground this year.

Still, gone are exorbitant bonus plans. Say goodbye to wide-scale sign-on and retention bonuses, rapid hiring sprees and mushrooming baseline compensation. Instead, salary increases have been moderate this year'just less than 6%'and bonuses have been restricted to key members of the IT team (see salary chart).

Don't scoff too quickly. That 6% is still much higher than the raise received by the average American worker, who typically can expect a 4% wage increase each year. What accounts for the boost? A number of executives say they plan to do the hiring this year that would have busted their IT budgets last year.

Established Firm Seeks Senior . . .

Take, for example, Duke Energy Field Services LP. The $9 billion natural gas gathering company has been rapidly expanding its pipelines and gas wells, says Fred Kesinger, Duke's CIO of field services, and IT plays an integral part in managing that infrastructure. Consequently, Kesinger has quadrupled his IT staff this year, a task that was painfully difficult last year.

Duke faced a major recruiting and retention problem a year ago, which delayed the Denver-based company's efforts to rebuild its IT department.

"We were seeing a lot of requests in the $100,000 range'what we considered an unreasonable range," Kesinger recalls. "That impacted our ability to capture the best people, particularly in the Web development area. College interns were turning down competitive rates, with no experience, and presumably got jobs elsewhere for $20,000 more."

Rather than bringing in new full-time employees, Kesinger says, Duke relied on outsourcing its IT support.

"We continued to look at the situation and we had very serious discussions about bending to the market and paying those rates, and we elected not to do that because it would not be in sync with the rest of the [corporate] pay scale," he says.

With IT compensation no longer out of kilter, turnover rates are dropping, and companies that were running low on staff, such as Duke Energy Field Services, Gambro AB and Remy Corp., are now replenishing their departments.

All three firms'with offices in or near Denver'paid database managers $90,000 to $100,000 in baseline compensation to oversee database design, programming and maintenance, for example. Compensation increased approximately 6% over last year for that position at those companies, while bonuses either disappeared or accounted for about 9% of salaries this year.

And as firms beef up their staffs, IT executives expect that new hires will stick around longer instead of pursuing fatter paychecks elsewhere.

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