IT compensation on the rise in '05

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.

Technology specialties in demand

According to the Robert Half Technology IT Hiring Index and Skills Report, which includes responses from more than 1,650 CIOs, Windows administration, wireless network management and SQL server management are the skills most in demand today.The following specialties also are experiencing strong growth:

  • Networking. As companies continue to safeguard their internal systems from viruses and spam, they require IT professionals who can identify and prevent security breaches. There is also a need for individuals skilled in the support of wireless and mobile technologies. Hands-on experience with Windows XP/2000/NT, Unix and/or Linux can raise starting compensation anywhere from 5% to 10%. Certifications such as Cisco Certified Internetwork Expert can also add 10% to 15% to base pay.
  • Technical support. Demand is growing for help desk analysts and managers, systems administrators, technical trainers and other IT professionals skilled in supporting and training internal and external customers. Candidates should have strong interpersonal and communication skills as well as a customer service focus.
  • Internet/intranet development. Companies continue to rely on the Web to expedite operations and limit costs. As a result, they seek individuals skilled in Active Server Pages, JavaScript, XML and .Net. Strong experience in these areas can increase an individual's starting salary by 5% to 10%.
  • Database management. Database managers and administrators are needed to help companies collect, store, analyze and leverage existing customer data housed within internal systems. Firms seek individuals experienced with Oracle8i/9i/10g, Microsoft SQL Server or IBM DB2 technologies, as well as those who possess Microsoft Certified Database Administrator and Oracle Certified Database Administrator certifications.
  • Application development. Businesses are seeking IT professionals experienced in developing enterprisewide Internet applications that integrate with legacy systems. In particular, demand is high for business systems analysts and application architects. Those with well-developed object-oriented language skills, such as C#, C++ or Visual Basic, can expect to see starting salaries that are up to 10% higher than average. Java, XML and .Net development expertise is also in demand.
  • Project management. CIOs are recruiting project managers to help minimize time and cost overruns while leveraging existing technology investments. These professionals must have excellent organizational and interpersonal skills as well as experience with projects of moderate to high complexity and in multiple technologies and functions. Individuals who possess project management certifications or who have completed a project management curriculum have an edge in the hiring process.
  • Top positions in 2005

    Although salaries for most IT positions in the U.S. are expected to rise in 2005, certain positions will experience greater-than-average demand. These include:

  • System auditors. Our research shows that system auditors will see the highest starting salary increases of any single job classification in 2005, with base compensation rising 5.1%, to the range of $63,250 to $81,750 annually.These individuals are needed to assess and document the capabilities of existing systems in advance of hardware and software upgrades. Demand for this specialty is also being driven by Sarbanes-Oxley, Gramm-Leach-Bliley and other regulatory compliance efforts.
  • Pre- and postsales consultants. Average starting compensation for pre- and postsales consultants is projected to increase 3.9% in 2005, to between $53,500 and $78,250.
  • Programmer/analysts. Starting salaries for programmer/analysts should fall in the range of $52,500 to $83,250, a 3.6% increase over 2004.
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    2005 Projected Salaries for Fastest-Growing Positions in the U.S.

    2005 % Increase Over 2004
    Systems auditor $63,250-$81,750 5.1%
    Pre- and postsales consultant $53,500-$78,250 3.9%
    Programmer/analyst $52,500-$83,250 3.6%
    Instructor/trainer $43,250-$65,500 2.6%
    Network security administrator $63,750-$90,500 2.3%
    Data security analyst $68,250-$93,000 2.2%
    Quality assurance/testing manager $64,750-$86,750 2.2%
    Disaster recovery specialist $60,500-$90,750 2.2%
    Internet/intranet developer $51,750-$74,250 2.0%
    Business systems analyst $56,000-$80,500 1.9%

    IT professionals who remain current on hiring trends, gain in-demand skills and experience and know their marketability will be well positioned in a recovering economy. Job seekers in high-demand specialties may see multiple employment offers, harkening back to the boom times of the late 1990s.

    To recruit qualified IT professionals to support their organizations' growth and future business goals, hiring managers should pay close attention to the factors affecting today's employment market.

    Katherine Spencer Lee is executive director of Robert Half Technology, a leading provider of IT professionals on a project and full-time basis. Robert Half Technology has more than 100 locations in the North America and Europe, and offers online job search services at

    Copyright © 2005 IDG Communications, Inc.

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