Checking the pulse of the IT industry

From June 23 through August 7, 2000, Windows 2000 Magazine conducted an online survey that sought respondents from the readers of the magazine’s Web site and the WinInfo Daily UPDATE email newsletter. The purpose of the survey was to learn about the salaries, benefits, job characteristics, job satisfaction, and other factors that make up the workplace of these readers. The survey focused on specific categories, including salary, satisfaction, skills, certifications and education levels, benefits, and company size and profile.

Respondent Pool
Windows 2000 Magazine’s audience consists largely of technology and IT professionals, many of whom are devoted to and deeply involved with Win2K and Windows NT technology. Our survey respondent pool included 2348 readers, most of whom are IT workers from every level of the corporate hierarchy and some of whom were engineers and developers.

Approximately 90 percent of the respondents were male and 10 percent were female. The largest job category among respondents was Network Administrators, which comprised 20 percent of the survey respondents. Other large categories included MIS Directors (7 percent), User Support Analysts (5 percent), Help Desk Technicians (4 percent), and Systems Architects (5 percent). Slightly more than 1 percent were Executives (VP, MIS), and another 1 percent identified themselves as Chief Information Officers (CIOs). Tables 1 and 2 profile the larger categories in greater detail.

The survey included results from respondents in every state. The most heavily represented states were California (13 percent), New York (5 percent), Ohio (5 percent), Florida (5 percent), Illinois (5 percent), Massachusetts (4 percent), Pennsylvania (4 percent), and Washington (4 percent). We extracted this information into regions that correspond with the largest categories of respondents, as Table 1 shows.

Survey respondents represented all major industries. The most heavily represented industries were Information Technology (19 percent), Manufacturing (10 percent), Finance (7 percent), and Consulting/Professional Services (6 percent). This response pattern is consistent with other surveys that Windows 2000 Magazine has run against its general audience.

Survey Results: Overview
At the time of the survey, the results showed that it was a job seeker’s market. At that time, employees could maximize the benefits that they received from their skills and training. Not surprisingly, the survey results showed that salaries for IT professionals were growing fast. We based this growth in salaries by comparing the survey respondents’ current salaries with their previous salaries, as Figure 1 shows. Figure 2 shows the average current salaries at the time of the survey by job title. In all job positions except those that pay less than $50,000, wages escalated as a result of the strong economy of the late 1990s. In most cases, the survey respondents reported salary gains that exceed national averages.

When we compared the survey respondents’ current salaries with their previous salaries, the results were staggering, as Figure 1 shows. For instance, salaries for the largest pool of respondents, Network Administrators, increased an average of 29 percent over the wages these respondents earned in their previous jobs. We don’t know exactly when these Network Administrators left their previous positions, but most reported a move within the past 2 years. This information indicates that a large percentage of the survey respondents received raises when they changed positions, and that they moved up into higher paying positions within their companies. However, when we compared respondents’ current salaries at the time of the survey to the salaries at their previous positions, as Figure 1 shows, 33 percent were earning less than $35,000 in their previous position. This finding illustrates that the trend in growing salaries is increasing. Sixty-eight percent of the survey respondents received an increase in compensation of at least $15,000 when they moved to their current positions.

For every salary range higher than $50,000, a strong salary growth existed over previous positions. Survey respondents making less than $50,000, however, had lower current salaries than their previous salaries at the time of the survey, which might have resulted from either a change in full-time employment status or the loss of a job and its replacement with a lower paying position.

Although an IT employee’s experience counts, it doesn’t necessarily mean that that employee is more likely to stay in one place. Fifty-seven percent of the survey respondents had been in the IT industry for 5 or more years. However, only 22 percent reported having worked for the same company for that same period.

Moreover, in spite of the good news about current job salaries, most respondents reported that they planned to seek a different position—only 33 percent had no plans of leaving their current position. Employers should note that respondents cited salary as their primary reason for seeking a new position. The reason cited next in importance for deciding to switch jobs was to increase advancement opportunity, followed by a desire to find more challenging work.

The fickle relationship between employee and employer with regard to salary helps explain the noticeably short tenures of many respondents. Nearly 58 percent of the survey respondents reported working for their current employer for 2 or fewer years. Nevertheless, survey results indicated that people were staying in the IT industry—80 percent reported that their previous job was also in IT.

Regarding education, most respondents had either completed college or had attended college for some time. A large constituency reported that they had one or more certifications; MCPs were the most common followed by MCSEs.

When it came to benefits, more than 94 percent of our respondents reported that they had received some sort of health care coverage, and 93 percent said they received at least 2 weeks of paid vacation per year. At least 55 percent received a health club membership or had onsite gym facilities.

Most of the survey respondents indicated that they didn’t feel overworked. In fact, 64 percent said they worked 40 to 50 hours per week, and 23 percent claimed to be averaging 50 to 60 hours per week. Only a small minority of the survey respondents worked very long hours, and that minority was significantly less happy than those who worked more typical hours. Of all the respondents, 40 percent said that they received some type of compensation for overtime work. Table 3 shows the work hours and benefits breakdown by job title.

Travel also did not appear to be a major component of most people’s jobs in the IT industry. More than 80 percent of the respondents reported that they spent less than 10 percent of their time traveling on company business. Less than 2 percent said they traveled more than 50 percent of the time, and approximately 12 percent said they traveled less than 25 percent of the time.

When we asked respondents to tell us how they obtained their current job position, we received a variety of answers. The most common answer (38 percent) was by a referral from a friend or acquaintance, making it obvious that networking among peers pays off when looking for a new position.

Responsibility for IT-related tasks and specific accountability of individual tasks that fall beneath the IT umbrella varied from position to position. However, 92 percent of the respondents claimed that the IT department within their company was responsible for the LAN and software within the organization, 55 percent said the IT department was trusted with the telecom circuitry, and 42 percent stated that the IT department was responsible for e-commerce issues. Results for respondents’ roles within the IT department were similar; however, they were slightly lower in terms of exact responsibility. For instance, 80 percent of respondents working within an IT department were responsible for software, 75 percent were responsible for the LAN, and only 21 percent were responsible for e-commerce.

As for continuing education and certifications, 80 percent reported that their employer encouraged formal education on the job either through classes or other avenues such as online tutorials, and 81 percent of all respondents reported that their employer would pay part or all of the learning expenses. Some respondents, however, reported that they were required to either pass a certification or earn a predetermined letter grade to receive reimbursement from their employer. Only 10 percent of the total respondents reported that they had no plans to take advantage of continuing education opportunities. We believe that additional certification makes employees more desirable when seeking new employment, and that many employees use this vehicle as a stepping-stone into more lucrative positions. However, the survey didn’t ask respondents to describe their expected benefits from seeking additional certifications.

Salary Satisfaction
When we asked the survey respondents about satisfaction with their current salary, the most frequent response was "somewhat satisfied." Almost half of the respondents held this neutral attitude, and the remaining respondents were split between "satisfied" and "unsatisfied," with a slight advantage toward the unsatisfied camp.

Interestingly, approximately 33 percent of the respondents said that they had no plans to seek a new position. The remaining two-thirds had plans to seek a different job, but 33 percent of them had not yet decided when to begin the search. Only 10 percent were actively seeking other work. Significant turnover continues to exist in the IT industry as people reach for higher salaries, advancement in responsibility, and better work assignments through a change in employment.

When you account for the relatively short life span of most IT jobs, the employer has a distinct disadvantage—not only are people who are unsatisfied with their salaries seeking other opportunities, but people who are satisfied with their jobs are also considering or actively seeking alternate employment. Workers generally stay in positions until something better comes along. As the survey results indicated, respondents most frequently found employment through referrals from friends. Most of the survey respondents believed that they were worth more than they were getting and were doing something about it.

Employers must determine the value of their employees, and when the labor market is tight, employers must be prepared to keep employees by offering very competitive salaries. In addition, employers must be prepared to offer other key benefits, such as continuing education, growth and advancement opportunities, and basics such as insurance and paid vacation time.

Where the Money Is
As part of the salary survey, we asked respondents to classify themselves into one of several job positions, as Figure 2 shows. We subsequently analyzed average salary breakdowns for 22 of these IT and IT-related job positions by region, as Table 4 shows. Not surprisingly, the East, Northeast, and West offered the highest salaries, while the South and Southwest offered the lowest.

CIOs were the highest earners, averaging about $107,500 a year, and Executives (VP, MIS) came in next, averaging just under $100,000 a year. Although these salaries were relatively low for executives, several of the survey respondents who identified themselves as Executives (VP, MIS) came from smaller companies. Among the Executives (VP, MIS), 27 percent came from companies with 25 or fewer employees and 33 percent came from companies with between 25 and 100 employees. As mentioned previously, Network Administrators were our most common respondent. The average Network Administrator salary at the time of the survey was $51,893. User Support Analysts and Help Desk Technicians were at the low end of the earnings ladder and averaged about $50,000 and $41,000, respectively.

Figure 1 includes average salary information from the survey respondents’ current position at the time of the survey and at their previous position. The average salary change from the survey respondents’ previous position to their current position was fairly predictable—those with higher salaries were achieving more significant salary increases.

The results became more surprising once we looked at salary increases in terms of percentage change in salary from the previous position. For example, Help Desk Technicians averaged a 13 percent increase in salary from when they moved to their current position, while Database Administrators were cashing in with an astonishing average 72 percent salary increase. As a result, Database Administrators were pulling in tremendous salary increases relative to their salary size. This finding reflects the boom in demand for Database Administrators over the past several years. As databases become more fully integrated with Web-based applications, we expect these numbers to remain steady or even rise.

Education and Certifications
Education is more important than ever. Companies recognize this and offer onsite programs and, frequently, stipend courses for those who wish to acquire a new skill that will assist them on the job. The two most common types of courses are continuing education, such as college-level programming, managing, or administrating paths; or preparation courses for certification tests, such as MCP and MCSE. Only 19 percent of the survey respondents had no opportunity for continuing education, making some sort of continuing education compensation all but an industry standard.

Similar to the general population of respondents, those reporting that they were Network Administrators frequently had college degrees. However, Network Administrators, on average, were slightly less likely to have finished a college degree than the general respondent population. Approximately 29 percent of the respondent pool of Network Administrators had some college experience, while 40 percent reported having a college degree. Only 10 percent of Network Administrators had a masters degree, and only 1 percent held a doctorate degree.

Sixty-six percent of the survey respondents said they were MCPs, and 56 percent said they were MCSEs. When accounting for certifications, we included those that were most common in the IT field, that the vendors heavily promoted, and that employers highly coveted.

Economic factors and intense competition among employers for skilled IT professionals pushed average salaries for MCPs and MCSEs higher than those with similar skills but without certification. Interestingly, at the time of the survey, larger companies tended to seek out individuals with certification credentials. One can assume that these companies did so because of the management structure and the bureaucratic methods common in large companies. Certification guarantees a set of skills, and seeking out individuals with these skills has typically been a no-nonsense approach to determining whether an individual has a level of expertise in a given area. Alternatively, smaller companies tend to use less rigid standards and provide more freedom when hiring; in such an environment, certification might not be as important to the employer.

Microsoft’s certification program has matured in recent years and has spread itself into more specified areas. As a result, increases in MCSE salaries might have been even greater if Microsoft had not introduced the MCSE + Internet certification, which the company began promoting heavily in 1999. Because the MCSE + Internet certification requires proven NT and Internet expertise, an MCSE + Internet-certified individual’s base salary averaged 12 percent more than the salary of an individual with an MCSE, according to the survey results.

Average salaries for individuals with MCP credentials, which accounted for 66 percent of the survey respondents were higher than salaries for those respondents who didn’t hold this certification. Less-experienced technical professionals with lower-paying positions and responsibilities typically test for the MCP certification and use this certification as a stepping stone for moving on to other certifications. The MCP certification also continues to attract newcomers to IT, many of whom might have little experience in the field, but who pass one exam to become an MCP early in their careers, thus boosting their earning potential from the start. Figure 3 presents a breakdown of the various certifications that we included in the survey and that we asked respondents to identify which certifications they had achieved.

Benefits
Given the trend to trade salary dollars for future considerations, such as stock and equity, or present considerations, such as better health care, we wondered how employers chose to make these tradeoffs. Table 3 lists by position the bonuses that respondents were receiving at the time of the survey. Most respondents received bonuses in some form, but that compensation rarely accounted for overtime. Sixty percent of the survey respondents received no overtime compensation. Those respondents not receiving overtime compensation worked, on average, slightly fewer hours and made slightly more money in general salary (outside of bonuses) than the general respondent population.

Most respondents received no stock options. Those who did receive stock options made substantially more than those who didn’t—on average, $7,400 more per year. A closer look at the respondents broken down by salary ranges reveals that those making below $65,000 were unlikely to receive stock options, and those making above $65,000 were likely to receive stock options.

When it came to vacations, almost half of the respondents received 2 weeks of paid vacation per year. Only 7 percent received less than 2 weeks, and a high percentage received even more vacation time. In fact, 22 percent of the survey respondents received a month or more of vacation.

Forty-three percent of the survey respondents received no bonuses whatsoever. In fact, more than half of all Network Administrators received no bonuses. Network Administrators were slightly less likely to receive common stock or stock options. Sixty-five percent received no stock or stock options, compared with 61 percent of the general population. In general, respondents in other relatively low-pay positions were less likely to get stock options.

Conclusion
We conducted the Windows 2000 Magazine salary survey during an interesting period for the industry, starting approximately 2 months after the US stock market tumbled in April 2000. It’s likely that this survey doesn’t reflect some of the ramifications that occurred as a result. For instance, pundits predicted that as a direct result of the crash, many dot coms would go belly up. The latter half of 2000 saw this prediction come to pass.

On one side of the salary argument, the salaries that these companies had been dishing out to attract talent will disappear as 2001 progresses, slanting the playing field in favor of the surviving IT companies. Moreover, several groups in finance and analysis have predicted a shift in the spirit of the IT sector, suggesting that the fallout from the stock market will harshly affect the salaries and perks that have become the norm for IT professionals over the past several years.

On the other side of the salary trend argument is the fact that the IT industry continues to face a labor shortage. This suggests that salaries will continue to grow for the next few years barring any major advances in software ease of use or distributed centralized Web-based computing. While salaries in 2001 might not match the growth rates of 2000, or may be flat, certain trends will continue to drive IT salaries up at rates that exceed other employment sectors in the years to come.