U.S. IT Wages Inch Up in Tight Labor Market

Computerworld - A strengthening U.S. economy that's fueling increased IT spending and creating a tighter labor market has led to moderate pay gains for technical workers such as application developers and database administrators, according to new research and interviews with IT executives last week.
"There is a noticeable wage increase" for technical skills, said David Myers, director of project management at Solo Cup Co. in Highland Park, Ill.
Myers said he believes that the pay gains are the result of a general rise in IT capital spending, which has resulted in more projects being launched and a decreasing supply of available domestic IT labor. In addition, Myers cited rising labor costs at offshore IT firms as a factor.
Other IT executives said they also have noticed a rise in labor costs within the U.S, but they didn't all agree that increasing costs for offshore IT labor are a significant contributing factor.
"I don't feel that increases of offshore salaries are the driver; it's more driven by local economies improving and fewer available resources," said Denny Brown, CIO at Arizona Public Service Co. in Phoenix. After having frozen IT salaries for the past two years, the utility company is considering a moderate pay increase for some of its roughly 400 IT workers, Brown said.
A report released last week by Foote Partners LLC, a New Canaan, Conn.-based market research firm, found that pay for noncertified and certified technical skills has risen 3.8% and 1.3%, respectively, through the first six months of this year.
Pay raises this year have been particularly strong for people with skills in operating systems (up 8.2%), networking and internetworking (up 5.1%), and databases (up 4.3%), the report said.
The results, which are based on a survey of 1,800 North American and European organizations from April to July 1, suggest that the notion that lower-cost offshore outsourcing led to wage deflation for IT workers may have been overblown, said David Foote, president of Foote Partners.
"There's no doubt about the fact that offshoring is continuing to grow," Foote said. But many organizations "have had less-than-ideal experiences" with offshore outsourcing and are concerned about the risks involved, he added.
Supply and Demand
Other factors contributing to the rise in domestic IT salaries include growth in corporate IT project portfolios and additional capital available to compensate high-performing IT workers, said Foote.
Offshore outsourcing consultancy neoIT Inc. has also tracked "moderate growth" in U.S. IT salaries, said Eugene Kublanov, vice president of corporate development at the San Ramon, Calif.-based firm. But, he added,