Feature: You're in the money - or at least you should be
- 01 August, 1999 12:01
Senior management and project leaders have pulled in the big bucks in this latest ACS salary survey, to lead the charge in this cashed-up industryOh, to be in senior management during these wild and crazy times of corporate IT expansion. While IT salaries continue to skyrocket by 5.2 per cent across the board in the 12 months until April this particular segment of the industry is at the heart of the bargaining action.
In fact, irrespective of what your job title is, most IT professionals should be jumping for joy in the knowledge that their salaries are markedly higher in comparison with other industries.
These are just a few snippets of the findings in this year's remuneration survey report conducted by APESMA (the association of professional engineers, scientists and managers, Australia) on behalf of the ACS.
With almost 2000 respondents, this latest survey offers an overview of the IT salary landscape with specific salary breakdowns by industry, job description, geographic location and sector.
And according to Dominic Angername, APESMA's research and surveys manager and compiler of the report, on the whole IT professionals are fairing much better in a salary comparison with their counterparts from the broader community.
"The current employment climate in IT is very much demand driven," Angername said. "The survey suggested that organisations are prepared to pay whatever it takes to get the right people with the right skills mix."
Angername's views were echoed by ACS president Prins Ralston, who suggested that the explosion of new technologies has given IT professionals the impetus to grow their skill bases and, as a result, earn higher salaries.
"The widespread recognition of the value of IT professionals, as evidenced by these salary increases, makes IT a very attractive profession when it comes to financial remuneration," he said.
Feeding this salary explosion is the growth of interest in new technologies such as e-commerce and Internet application development coupled with plenty of Y2K remediation work. Angername suggested that because end-user interest in deploying these types of technologies is outstripping demand, IT professionals that possess the right mix of skills could almost write their own salary ticket.
"We have found that decisions to venture into areas such as e-commerce are being made primarily at senior management level.
"So if they are that confident e-commerce will be the cornerstone upon which the future of their organisation is driven they must be prepared to sink the dollars into securing the best IT staff possible."
Angername claimed that there is "absolutely no point" in spending megabucks on hardware and software infrastructure alone because organisations need to offset that expenditure by paying for the right staff.
However, he added that finding the right IT staff is no easy matter and often organisations are forced to pay over and above expectations to snare their prey.
"I was certainly surprised by the vast range of skills many IT professionals own," Angername declared. "In fact, it wasn't unusual to find survey respondents possessing skill sets in up to seven or eight different technologies.
"It's these IT staff who are the targets of many prospective employers, but they have to be prepared to pay whatever it takes to get them onboard."
Importantly, the ACS's Ralston recognised that IT professionals shouldn't consider their career paths limited because they have a technical focus.
"The results show that while management skills still attract higher rewards than purely technical skills, the differential is diminishing and technical specialists no longer have to move into management to receive a high level of remuneration," he said.
Bart Vogel, the managing director of Interim Technology's Associates and Solutions service divisions, agreed with Angername's assessment that quality staff are a must-have asset if organisations want to use IT to drive growth.
"The rapid changes we are seeing in technology will always ensure that IT salaries climb," he said. "There will always be demand for quality IT staff who can help their employers meet their business objectives."
So what does a competent IT professional earn in today's market?
According to the survey, the median salary of all IT professionals is $68,000 and the median total package (which includes base salary, leave loading, superannuation, cars, fringe benefits tax and performance pay among others) is $81,842.
These salaries compare more than favourably with those received by professionals in the broader community, where the average base salary is around $38,000. However, Angername warned that the trade-off for monetary gain is quality of life pain thanks to the hefty overtime requirements that come with responsibility.
According to the report, while full-time IT professionals in the private sector usually work at least a 45-hour week many respondents reported that they weren't getting recognition for working overtime.
The private sector also proved to be the more generous payers with the median base salaries totalling $75,000 and the median total packages estimated at $90,330 -- an overall increase of 6 per cent on last year. And in a reflection of the shrinking nature of the public sector, IT professionals earned median salaries of $60,000 combined with median packages of $69,648 -- an overall increase of 4.2 per cent. Angername attributed some of this public sector salary stagnation to government's reluctance to employ university graduates on the basis that they drive a marked spiral in salaries at the early stage of their careers.
A breakdown of industry sectors also offers some suprising findings with IT professionals in the food, beverage and tobacco industries receiving a 9.2 per cent overall salary increase compared to close challengers, banking/finance IT professionals, who received a 7.2 per cent salary increase.
Interestingly, IT professionals employed by vendors received the lowest salary increases of all the industries polled in recording a mediocre 3.3 per cent increase (see chart).
But while full-time IT professionals in both private and public sectors continue to prosper, Angername suggested that the lure of dark horse professions such as contracting and outsourcing may prove enticing to money hungry IT professionals. He confirmed the widespread belief that many organisations are opting to outsource much of their IT infrastructure in a bid to save costs and focus on core business competencies.
However, Angername also perceived a trend among organisations to steer clear of expensive contractors and outsourcers in favour of hiring internal staff.
"There is certainly plenty of value in contracting or outsourcing IT," Angername suggested. "However we are seeing a trend now where most organisations are favouring internal IT staff that are familiar with their environment and can be trusted.
"Contractors will always be hired guns. Sure they can fix your problems, but when they leave in search of new projects they take with them sensitive knowledge about your organisation," Angername claimed.
"What many organisations don't realise is that this intellectual property can never be replaced unless they do more with their internal IT staff -- and that means paying higher salaries, for example."
Angername prophesised that, in the long term, organisations will be better off employing and paying "appropriate salaries" to internal staff and then focusing on constant retraining and promotions.
"It's a much better alternative than employing expensive contractors who largely have no loyalty to the organisation," he claimed.
In contrast, Vogel took a different perspective on the role contractors and outsourcers have in the IT industry. He suggested IT staff with legacy skills can always find a home with outsourcing organisations because legacy platforms are, by and large, the first to be outsourced.
"Organisations are no longer willing to support this infrastucture as they move to client/server and Internet-based infrastructures," Vogel claimed.
"This places outsourcers in a unique position because they have to employ IT professionals with legacy skills in order to win the deal, but they also have to ensure that those same employees gain the relevant skills in new technologies to be able to chase new business.
"They face a stiff challenge," he added. It is this focus on skill sets that Vogel predicts will drive future salary rises.
"IT professionals can now move with their skills to where the work is. More than any other industry, IT professionals are becoming loyal to their skill sets rather than to their employees," Vogel suggested.
So which job titles received the best salaries this year?
Angername claimed senior management always seems to do the best in salary surveys such as APESMAs. For example, project managers with between five and seven years experience receive median base salaries of $87,500 and median packages of $102,875.
However, he added that independent consultants (a sector that grew by three per cent last year) are running a strong second to senior management in the earning stakes. According to the survey, consultants with five to seven years experience receive a median base salary of $64,000 and a median package $69,222. The median hourly rate charged by these contractors was $69.
At the lower end of the salary scale, database administrators (base salaries of $60,000 for seven to 10 years experience) performed well, according to Angername. Meanwhile, IT support staff with five to seven years experience suffered earning median base salaries of $38,000 and median packages of $53,059.
But what's in a title these days? And does a big name title immediately guarantee you a nice juicy salary increase? According to Angername, whether fancy titles automatically entitle you to salary increases is debatable.
"Organisations often dress up their job title to make them sound unique.
"They are very adept at devising original job titles to counter a growing trend among IT professionals to compare like titles despite that fact that each person may have dramatically different responsibilities," Angername claimed.
"For example, we know of some professionals who would call themselves consultants, but when you compare the range of consultant salaries the numbers would be ridiculous."
Employers, too, can play the salary fudging game. Angername revealed that a common ploy is to hire cheap graduates and entrust them with plenty of responsibility early on only to continue paying them at graduate rates because of their limited years of experience.
Where to get the report?
The Australian Computer Society's 1999 remuneration survey is available to all ACS members at discounted rates. For more information, contact APESMA on (03) 9695 8800. An online copy of the report is also available at: http:// www.apesma.asn.au/surveysLaying the ground rulesIn order to accurately reflect the salaries of IT professionals and avoid the inevitable debate surrounding responsibilities and qualifications, APESMA established five responsibility level definitions to categorise IT staff.
Largely dominated by programmers and includes university graduates and staff with minimal experience who require supervision.
Mainly provide systems design, analysis and monitoring.
Titles: trainee network administrator, programmer, and PC support officerLevel 2Programming and systems analysis and design responsibilities continue, however supervision is reduced.
Graduates with a higher technical competency are preferred. These staff would provide technical support, liaise with end users, supervise staff and investigate new technologies.
Titles: Consultant, LAN consultant, and analystLevel 3Staff at this level direct, develop and modify computer systems. They are usually specialised technicians and possess sound communications skills. A classic example of a Level 3 employee would be a team leader.
Duties would include: team leading, IT planning, managing computer services that are small in scope, implementing new technologies.
Titles: project managers, systems analysts and project leadersLevel 4Management skills are the key criteria for staff that reach this level. Staff at this level would be managing a number of teams, allocating resources, formulating work programs and evaluating results.
Duties would include: directing and managing two or more teams, investigating the use of new technologies, coordinating planning and strategic goals, formulating policy for service delivery projects.
Titles: senior managers, project managers, technical services managers and consultantsLevel 5These most senior of IT staff report directly to the chief executive officer, or equivalent.
They manage large IT projects and are responsible for human and financial resources. They are also expected to initiate, plan and manage projects that directly benefit the business.
Staff at this level are expected to demonstrate management skills, technical competencies and communication skills to negotiate substantial IT infrastructure contracts.
Titles: systems manager, IS manager, IT manager, consultantNew IT award to regulate salariesIn July this year, for the first time, IT professionals were bound under an IT award established by the Australian Industrial Relations Commission. Known as the Information Technology Industry (Professional engineers) Award, it covers provisions relating to minimum rates of pay, annual leave, sick leave and parental leave. The award also allows access to provision of the Workplace Relations Act concerning unfair dismissal.
From a salaries perspective, the award now stipulates a minimum weekly wage rate for each of the job classifications mentioned previously.
For example, the award weekly wage for a Level 1 classification (trainee network administrator) would be no less than $598.40, while the weekly award wage for a Level 3 classification (project leaders) would be no less than $805.
If you would like further information on the Information Technology Industry Award contact APESMA on (03) 9695 8800 or visit www.apesma.asn.au/professions/itpa/itpa.htm