Compare your earnings with those of your peers
Everyone loves a salary survey. We're endlessly curious about how much money other people make. We want to know whether they make more than we do, and we enjoy opining about whether they deserve their incomes or not. It's even better when the salary survey explores the field in which we work. If we're at or above the survey numbers, we're happy that we're fairly paid. If we find that we make less than our peers, we can justify our feelings of being underappreciated—and maybe we can even use the survey results to convince our managers that we deserve a pay raise! Here's a look at what the Windows IT Pro Industry Survey 2004 tells us about what IT professionals make. For information about how the survey was conducted, go to "Putting a Face on the IT Pro," page 15.
Almost 59 percent of the IT professionals who responded to the Windows IT Pro Industry Survey will receive base salaries between $40,000 and $79,999 this year. The rest (41 percent) of the respondents are almost evenly divided between making less than $40,000 (nearly 22 percent) or $80,000 or more (19 percent). Nearly 11 percent make less than $30,000.
The survey asked respondents to specify a range (e.g., $30,000 to $39,999, $300,000 or more) for their base salary. To see a breakdown of how many people in each job category fall in each salary range, go to "The Widely Ranging Salaries of IT Pros" Web table (http://www.windowsitpro.com, InstantDoc ID 44435). To simplify this discussion and the accompanying tables and figures, we converted each base-salary range to one base-salary number representing that range. For an explanation of how we arrived at the base-salary number for each salary range, see the sidebar "Everything You Really Didn't Want to Know About the Salary Statistics (and Weren't About to Ask)," page 30.
You might be surprised to learn that just over 16 percent of people who put themselves in the survey's President/owner/CEO/CFO/other executive management category (hereafter referred to as the executive management category) are in the less-than-$30,000 salary bracket, and another 16 percent earn $40,000 to $49,999. We're guessing these folks run small companies—maybe their own companies—rather than Fortune 500 firms.
Other executive managers obviously make more, as evidenced by that category's position near the top of the "How Does Your Overall Income Compare?" chart. Nearly 26 percent of executive managers have salaries of $100,000 or more, and 4 percent of these earn $300,000 or more. Notice that the CIO/CTO category trumps the executive management category in terms of average base salary and average overall income. This phenomenon might be partially explained by the above-mentioned sizable number of executive management respondents who are in one of the lower salary brackets. Nearly 52 percent of the CIOs and CTOs earn from $70,000 to $79,999 or from $100,000 to $124,999.
In third and fourth place in both average base salary and average overall income are systems architects and storage administrators, respectively. Only two survey respondents classified themselves as storage administrators, so it's difficult to know whether their salaries accurately represent the salaries of most storage administrators.
The IT director/IT manager/purchasing manager (hereafter referred to as IT management) category ranks sixth in average base salary and seventh in average overall income. These IT managers fall solidly in the IT pro base-salary sweet spot of $40,000 to $79,999 that we mentioned earlier—61.4 percent are in this salary range.
Database administrators make slightly more ($1483) than security administrators in average base salary, but security administrators pull ahead by $3522 in extras to achieve an overall average income that's $2039 more than their database-focused counterparts. Whereas database and security administrators earn in the mid- to high-$60s on average, Web administrators, systems administrators, and network administrators make in the mid- to low-$50s. Application administrators are the lowest paid of the administrators, with an income of $43,769 on average.
The survey asked desktop deployment professionals of all types to lump themselves together into one job-title category. Half these folks make $40,000 to $59,999 in base salary; another 17.4 percent make $30,000 to $39,999. None make $90,000 or more. Similarly, Help desk professionals of all types were grouped together in the survey. Nearly 80 percent of these workers make a base salary of less than $50,000—57 percent make less than $40,000—but a few were in the ranges from $80,000 to $124,999. No doubt, some of these higher paid professionals are managers with large Help desk staffs to oversee and many end users to help.
A significant number (11.3 percent) of respondents specified Other as their job title and described a range of job duties. Their average overall income falls near the middle of the pack.
In addition to their base salaries, some lucky IT professionals will receive compensation in the form of bonuses, stocks, and stock options this year. The survey asked respondents to report on these and other sources of income. These items constitute the Average additional income in the "How Does Your Overall Income Compare?" chart. Not everyone receives these monetary benefits. When reporting on their compensation, 41.4 percent of respondents selected the Not applicable option for bonuses; another 20 percent will receive $1000 or less in 2004. Eighty-one percent said Not applicable for Stock/stock options, with 8.6 percent reporting $1000 or less. And 70.1 percent said Not applicable for Other sources of income, with 10.6 percent reporting $1000 or less.
Of the various job titles, security administrators are most likely to get bonuses, application administrators are most apt to receive stocks or stock options, and trainers are most inclined to have other sources of income, but CIO/CTOs enjoy the biggest bonuses, the most income from stocks and stock options, and the most income from other sources. Executive managers are second to CIO/CTOs in the dollar amount of bonuses received. Security administrators are runners up in stocks and stock options and other income and are fourth in bonuses.
Most IT professionals who will receive bonuses and other cash payments in addition to their salary this year will be compensated for personal performance (57.5 percent) or achievement of company revenue/profit goals (32.4 percent). Other popular listed reasons that respondents could choose from (they could select multiple reasons) were company profit sharing (which received a 19.5 percent response), paid overtime (16.4 percent), project milestone completion (16.3 percent), certification/training (14.0 percent), and holiday bonus (12.1 percent). Respondents could also specify their own reasons for extra cash—a few of the most common write-in reasons were cost of living increases, payment for being on call, a new job or promotion, and an extra project for their primary employer or consulting or other work for other employers. One creative IT pro makes extra money through "art." Another IT pro kept a clear head in an emergency and received a "crisis response bonus." And yet another just showed up for work and got paid extra for "attendance."
IT pros' employers also provide noncash or indirect cash benefits. Most frequently offered, and probably most important, is health-care coverage. More than half (58.3 percent) of respondents receive some health benefits—that's not a bad number, but it means that 41.7 percent are doing without such benefits. Slightly more than 46 percent of employers have a 401(k)- or 403b-matching program—403b is the 401(k) equivalent for nonprofits and public sector organizations. Many IT pros (39.1 percent) receive some help with education- or training-related expenses, and 27 percent can take advantage of company-paid phone or cable lines to work from home.
Other, less common benefits are stock purchase plans (13 percent), health-club membership (8.1 percent), and sabbaticals (4.1 percent). Slightly less than 3 percent get some help with day care. Ten percent enjoy a company car or car allowance. And some respondents wrote in that they receive help with fuel, other types of commuting expenses, and parking. Other write-in responses ranged from "free lunches" and "compensatory days off" to "a coffee mug," "a 20-pound turkey at Thanksgiving," "a nice atmosphere," and "I'm lucky they pay me."
Compensation Fairness and Changes
Now that you have all this information about your peers' salaries and overall income—how do you feel about your own compensation? Are you adequately compensated for the work you do? If you said yes, you're in the minority. Nearly 58 percent of the survey respondents said they didn't receive adequate compensation. Aside from the two storage administrators who were both content with their compensation, executive managers were the happiest. Of this group, 80.5 percent agreed that their income was fine. It's interesting to note that CIO/CTOs, the group with the highest income, were among the least satisfied—63 percent weren't happy. The least content were Help desk professionals, 68.7 percent of whom thought their pay was inadequate. Quite possibly, no amount of money would be enough to compensate for having to answer end users' questions all day long.
The largest number of those who said they weren't satisfied with their income would be happy with a 6 percent to 10 percent increase or an 11 percent to 15 percent increase. A group almost as large would like a 16 percent to 20 percent pay raise. Wouldn't we all?
Compensation for 8.7 percent of IT professionals in the survey will be lower this year than it was in 2003 (lower by 10 percent or more for 4.5 percent of respondents). Another 19.5 percent of IT pros will have the same income as last year, and a fortunate 71.8 percent will see an increase. A respectable number—17.7 percent—will enjoy an increase of 10 percent or more, but more IT pros will see gains in the single digits, especially 5 percent or less.
Many survey respondents took the time to describe changes they're experiencing in their compensation and benefits. IT pros are working harder (due to smaller staffs), getting smaller pay raises, and contributing more for their health-care coverage. "We are being asked to do more work with less staff, for very little gain in pay. Our health insurance premium and copayments have increased about 10 percent. Our company has reduced incentive perks. These changes are for the foreseeable future until the economy picks up," said one respondent in a comment echoed by many others.
Compensation isn't the most crucial factor for IT professionals when they're job hunting, but it's in the top three. Using the scale of Not at all important, Somewhat important, and Very important, respondents were asked to rate the importance of 25 factors when choosing a new job. The factors that received the highest number of Very important ratings were Challenge of work (selected by 73.1 percent of the respondents) and Base salary and Professional development and training (tied at 72.1 percent each). Relatively high percentages of IT pros also gave Very important ratings to four other factors relating to compensation: Overall compensation (66.7 percent), Annual raises (64.5 percent), Benefits package (62.6 percent), and Performance incentives/bonuses (57.4 percent). Only one compensation-related factor—Stock options—wasn't that important to respondents: Just 21.8 percent of the respondents rated this factor as Very important.
Personal characteristics such as gender, age, experience, and education all have an impact on IT professionals' earnings. The survey's findings are in line with what you'd expect—older males with more education and more years of IT experience do better.
The national trend of men earning more money than women generally prevailed for the IT pros in the survey. The survey results also support the belief that the profession is composed of more males than females: 88 percent of respondents were male and only 12 percent were female. On average, the men will be paid about $4907 more this year than their female counterparts. Male IT pros will receive an average wage of $57,600, and female IT pros will bring home $52,693. The greatest difference between the two genders' salaries was in the executive management category. Female executive managers will earn an average salary of $29,333 this year, while males will earn $76,408—a difference that represents not a gap but rather a $47,075 canyon between the two groups' salaries. However, only about 4 percent of female respondents were executive managers, and only 3.7 percent of female respondents classified themselves as CIO/CTOs, suggesting that men continue to hold more high-level positions in the IT world than women do.
Security administrators had the second largest gender pay gap, with male respondents earning $26,989 more than female respondents in 2004. Male and female consultants will bring home paychecks closest in amount to each other, with males earning only $426 more than females this year. One possible reason why the consultants' gender pay gap is so narrow is that consultants dictate their own rates and, to be competitive in the market, they set similar rates.
Although male respondents typically will make more money than female respondents this year, women will outearn men in six job-title categories: desktop deployment pro, application developer, systems administrator, network administrator, trainer, and application architect. Four of these categories (desktop deployment pro, application developer, trainer, and application architect) had few female respondents, which might account for the women's average salary being higher than the men's. (With only a few respondents, unusually high or unusually low responses aren't balanced by more-average responses.) However, the other two job-title categories (systems administrator and network administrator) had the most female respondents. Nearly 20 percent (the highest percentage) of the female respondents are systems administrators. These female systems administrators reported that they'll earn $52,115; their male counterparts will earn a slightly lower average salary of $51,435. This slight wage difference could be because female systems administrators are typically older than their male counterparts: About 19 percent of female systems administrators are 50 or older, whereas only 8.4 percent of male systems administrators fall into this age category. The second highest number of female respondents—12.6 percent—categorized themselves as network administrators. Female network administrators earn $4295 more than their male counterparts, probably due in part to the females' higher education: 54.5 percent of the female network administrators hold bachelor degrees, master's degrees, or doctorates, compared with 42.3 percent of males.
In general, being older is paying off for survey respondents. The older IT pros are better compensated than their younger counterparts. Respondents who are 60 years of age or older will earn the largest average salary this year, at $66,625, whereas IT pros under the age of 20 will bring home the lowest average annual salary, at $36,750. It's important to note that these age categories had the least number of respondents: Only 1 percent of respondents were 60 or older and only 0.2 percent of respondents were under 20.
The majority of survey respondents are between 30 and 44. Almost 22 percent were 30 to 34, making this group the age category with the largest number of respondents. IT pros in this group bring in an average salary of $54,786. With 19.6 percent of the respondents, the 35 to 39 age category was the second largest age group. These post—baby boomers will make $58,571 in 2004. About 17 percent of respondents fell into the 40 to 44 age group, making it the third largest age category. Respondents in this age group plan on earnings of $61,670 this year.
With age comes experience—and greater financial rewards. As you might expect, the survey shows that, in general, the more IT experience you have, the better your pay. Respondents with 35 to 39 years of IT work under their belt are the high earners at an average salary of $91,000 per year. IT professionals with 40 years or more of experience earn substantially less than their slightly younger counterparts but still more than other IT workers with less experience. Only 0.2 percent of respondents were in the 40 years or more category and only 0.4 percent were in the 35 to 39 years category, so making broad generalizations based on their responses probably isn't a good idea. However, a possible explanation for the unusually high salary number for those with 35 to 39 years of experience might be that these folks, probably in their late 50s and early 60s, are in their peak earning years before retirement. The folks with 40 years or more might be winding down their careers in jobs with fewer responsibilities or in part-time work.
The bulk of respondents (93.6 percent) have been working in IT for 1 to 24 years, with the biggest groups working in IT 5 to 9 years (37.7 percent) and 10 to 14 years (21.6 percent). These IT professionals in the beginning to middle years of their careers show earnings rising at a fairly steady rate.
Education and training are other factors that directly affect salary levels. Respondents who have an associate degree, bachelor degree, master's degree, or doctorate, or those who have a bachelor's plus some graduate work, earn more than those who don't—and the more education, the better. Those with doctorates are by far the best paid, at an average salary of $91,690.
Technical/professional training is also typically a good way to earn more money. A large percentage of respondents have undergone training in the past or are currently enrolled in a training/professional program. In nearly every job-type category, those who've done some professional training make more than those who haven't. In some job-title categories, such as Web administrator and security administrator, the disparity between the average salaries of the trained and the untrained is well over $10,000.
The company or organization you choose to work for can also affect your salary. Factors such as company size, location, and type of business are determiners and indicators of what IT professionals can hope to earn.
Company size can be measured in several ways. Let's look at size by using a couple of metrics that are especially pertinent to IT pros: number of end users and number of servers. Generally speaking, the more end users or servers a respondent's company has, the higher the respondent's salary is. You can see the impact end users have in the "How End Users Affect IT Pros' Salaries" graph. In the case of servers, respondents who work for companies that have 50,000 or more servers earn an average salary of $75,172. Respondents in companies with 100 to 49,999 servers make salaries between $60,000 and $70,000, and respondents in companies with 1 to 99 servers make $50,000 to $60,000. If you're curious, fewer than 5 percent of respondents work for companies that have 10,000 or more servers. Nearly 42 percent of respondents' companies have 24 servers or fewer.
Almost two-thirds of the surveyed IT professionals indicated that they work in the United States. These IT professionals are spread throughout the country, with slightly higher concentrations in the usual regions: South Atlantic (18.6 percent of the US-based respondents work here), East North Central (16.3 percent), and Pacific (15.8 percent). The areas in which the fewest IT professionals work are the East South Central (3.8 percent) and New England (5.6 percent) regions.
With Silicon Valley and the Redmond campus in the Pacific region, it's not surprising that the IT professionals here have the highest average salary and the highest average overall income. The areas in which the respondents earn the lowest average salaries and lowest average overall incomes are the Middle Atlantic and West North Central regions. (For information about which states fall into the nine US Census Bureau regions, see the "Go West, Young IT Pro" chart.)
Two service industries proved to be the most popular employers for IT professionals: 11.7 percent of the surveyed IT professionals said they work in the computer, data processing, and IT services industry, and 11.3 percent said they work in the computer-related consulting and professional-services industry. These two service industries are in the middle of the pack when it comes to pay. The IT professionals in the computer-related consulting and professional-services industry earn an average of $59,625, whereas their counterparts in the computer, data processing, and IT services industry earn an average of $53,753.
If making as much money as possible is a goal, IT professionals should start sending their resumes to service providers (e.g., Web-hosting companies, application service providers—ASPs) and avoid working for computer-related retailers, distributors, and wholesalers. The respondents who work for service providers reported earning an average of $70,368, whereas the respondents who work for computer-related retailers, distributors, and wholesalers earn, on average, only $44,296.
We've looked at IT professionals' compensation every which way we can think of. Now that you know what your peers are making—by job title, gender, age, years of experience, education, additional training, number of end users and servers, region, and industry—how do you stack up? Are your earnings in line with others'? Drop us a line at email@example.com; we'd be interested to know.
See associated figure —Here are the Bases — Do You Feel Loaded?
See associated figure —How Does Your Overall Income Compare??
See associated figure —Sweet Dreams of More Money?
See associated figure —He Made, She Made?
See associated figure —Got the Birthday Blues??
See associated figure —A Bunch of Experience?
See associated figure —Education Pays
See associated figure —How End Users Affect IT Pro's Salaries
See associated figure —Go West, Young IT Pro
See associated figure —Sometimes Education Doesn't Pay
See associated table —Additional Income: Icing on the Cake
See associated table —Think Training is a Drag? Consider This...