Computerworld's 2005 Salary Survey reminds me once again that compensation still greatly depends on the individual and on that person's unique situation. This year's survey results and my work with thousands of candidates as an executive recruiter support my notion that while the outlook for IT professionals is improving, it continues to be a soft market, especially compared with functions such as finance and business operations.
I'm pleased to see that nearly every indicator of compensation for IT professionals is moving in a positive direction, according to the survey. However, I wasn't surprised to see that the progress is small. Having conducted numerous searches this year to fill positions for CIOs, chief technology officers and vice presidents of IT, it's clear that there continues to be more senior-level IT professionals than positions available. A saving grace for these highly qualified individuals is that the hiring companies have been willing to offer more cash to attract proven technology leaders.
For example, this summer we recruited a vice president of technology for an early-stage technology company. Because this was the first outside executive to be brought into the company -- and into the vital role of ensuring the company's technology could scale to support the growth of the business -- the CEO wanted to hire the best person he could find and attract. Over the course of the search, the executive team met with nearly 25 qualified candidates -- an unusually high number for an executive search -- with a range of skills, experiences and compensation levels. While many of the qualified but lesser-compensated candidates were within the company's budgeted range, the CEO chose to hire a candidate at more than 20% above the high end of the range. Why? He recognized this person would give the company the best opportunity to ensure the technology would scale and the business would succeed.
We conducted a CIO search for another company that had never before used a retained search firm. The executive team hired us because they had previously hired two CIOs over the past six years and neither person provided the technology leadership they needed to help grow the company. The CEO and the executive team interviewed eight candidates and, like the other company I mentioned, hired a candidate well above the targeted compensation range. In both cases, the CEOs were willing to pay a premium to hire a candidate with the demonstrated ability to bring transformational technology leadership to their companies.
While the survey and these examples are interesting, what do they mean for the larger ranks of IT professionals? I believe that they demonstrate two key lessons. First, compensation is highly specific to both the individual and to each company's situation. Nearly all companies have compensation ranges, but it's important to remember that ultimately these are guidelines and companies always find a way to pay superior talent. In order to maximize personal compensation, IT professionals at all levels should focus on delivering transformational leadership for their respective positions.
Second, the current economic and regulatory cycle, in many ways, benefits people in functions such as finance and business operations. Over the past 18 to 24 months, we are seeing many examples of significant, sometimes dramatic, increases in compensation for finance executives. For example, I was recently speaking with the vice president of finance at a $400 million-plus company whose compensation increased by nearly 40% when his company found out that he was considering leaving for another opportunity. It wasn't very long ago that examples like that were the exclusive domain of IT professionals. Although IT workers might never again see a return to the compensation advances of the late-1990s, I believe we are at the beginning of a slow but steady rise in compensation levels for many IT positions. The reasons? First, companies seem to have recovered from the IT hangover caused by the dot-com bubble burst. Second, there will likely be a continuing growth of IT-intensive industries such as biotechnology. And third, over the next three to five years, numerous government agencies and large public companies will have up to 30% of their IT professionals eligible to retire.
So if compensation decisions are ultimately decided case by case, then the message is clear: Those IT professionals who can demonstrate their personal ability -- and the ability of an exquisitely led IT function -- to not only support, but to transform a company's business approach can write their own compensation ticket. Approaching IT leadership as a function of good corporate leadership and teamwork is a winning formula for executives and their companies.
Berray is a partner at Cabot Consultants in McLean, Va., one of the largest mid-Atlantic-based retained executive recruiting firms, where he focuses on recruiting transformational leaders for his client companies. Contact him at tom.berray@cabotinc.com.
2005 Salary Survey
Stories in this report:
- Sidebar: Chief Security Officers: Bigger Raises, But Not Always High Pay
- Salary Survey Methodology
- Sidebar: Who They Are
- Leaving a Mark
- Opinion: Spark Your Salary
- Salary Survey Blog: Johanna Rothman
- Opinion: The Meaning of Money
- Senior Management IT Salaries
- Middle Management IT Salaries
- Staff and Entry-Level IT Salaries
- Sampling of Other Titles
- Compensation by Region
- Salary Survey: Interactive Smart Salary Tool 2005
- 2005 Salary Survey Snapshots: Contractors and Consultants
- 2005 Salary Survey Snapshots
- Write Your Own Salary Ticket
- Salary Survey 2005 - Data Points