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IT compensation on the rise in '05

By Katherine Spencer Lee, Robert Half Technology
January 18, 2005 12:00 PM ET

Computerworld - Although not a complete return to the dot-com boom, 2005 looks to be a promising year for IT professionals. Economic optimism is slowly returning, and CIOs across the U.S. have begun to initiate projects previously put on hold. As a result, starting salaries should see a moderate increase over 2004 levels. According to the newly released Robert Half Technology 2005 Salary Guide, average base pay for IT professionals overall will rise 0.5% this year, with larger increases expected in high-demand specialties such as information security and quality assurance. This compares to a 1.6% decline in starting compensation that was projected last year.

Hiring trends

Those with highly sought-after skills are beginning to receive multiple employment offers as demand for their talents grows. In response, many firms are increasing their retention efforts to ensure that top-performing individuals remain satisfied. In a survey commissioned by Robert Half Technology, 55% of CIOs said that keeping key performers is becoming more important as the economy improves. To this end, organizations will be looking to improve their work environments, enhance recognition efforts and monitor the morale of employees who may have felt overworked or underappreciated during the downturn.

Full-time hiring remains measured, as many firms are waiting for clear signs of a sustained economic recovery before adding to their staffs. In the meantime, companies are turning to project or contract professionals for access to much-needed skills, a strategy that allows organizations to prepare for long-term growth while avoiding potential layoffs if business slows.

This approach also enables firms to gain a firsthand assessment of a candidate's technical expertise and interpersonal skills before extending a full-time offer. Sixty-three percent of CIOs we polled said it was valuable to have a prospective employee work on a project or contract basis as a means of evaluation for full-time employment.

Areas of investment

The following trends are currently fueling IT hiring in the U.S.:

  • Capital expenditures. Application and technology upgrades for employees and customers are driving new desktop systems and software purchases.

  • Spam/viruses. Organizations are enhancing the security of internal systems by installing intrusion-detection software and firewalls.

  • Wireless communication. Businesses are demanding mobile solutions, leading to investments in notebooks, tablet PCs, PDAs, smart phones and wireless networks.

  • Business intelligence. Firms are seeking applications and technologies that collect, store, analyze and provide access to data that can assist users in making better business decisions.

  • The Internet. Continued investment in Web-based applications, including intranets and extranets, allows businesses to enhance collaboration, customer service, customization and management.

  • Regulatory requirements. Regulations such as the Sarbanes-Oxley Act, the Health Insurance Portability and Accountability Act, the USA Patriot Act and the Gramm-Leach-Bliley Act are affecting IT departments in nearly every industry as organizations put in place processes that ensure compliance with these mandates.

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