Stagnant Waters: Why the IT Talent Pool Faces Flat Wages
Posted February 26th, 2013
Pop quiz – what has increased over the past ten years by less than one half of one percent, according to the number-crunching experts at the Economic Policy Institute? Not gasoline prices (we wish!), nor housing costs, nor college tuition. The answer is IT wages, and in actual dollar amounts, that means that the average hourly IT wage has only risen by $1.97 per hour over the course of the past decade – from $37.27 to $39.24.
The Causes
- A Still-Sluggish Economy – Faced with market uncertainties, many organizations have resorted to meeting their staffing needs with temporary employees. This approach, according to Joel Capperella of technology staffing firm Yoh, allows companies to “run virtual, just-in-time talent supply chains.” The result is savings for employers, but stagnant wages for permanent employees who are in less demand.
- Job Outsourcing – According to internal IBM and union documents revealed by Infoworld in December 2012, Big Blue’s India workforce now exceeds its US-based employees by a 112,000 to 92,000 margin. Computer Economics research vice-president John Longwell confirms the effects of offshoring, especially in the area of programming. He estimates that “maybe 30% of IT organizations are offshoring some – and only some – app development work. This is substantial, and offshoring is certainly having an impact on programmers.”
- Increased Automation – Cloud computing may be great for saving organizations money, but it has some disturbing implications for their IT departments. According to InfoWorld writer Eric Knorr, “An increasing number of [enterprise development] projects will be supplanted by an abundance of narrowly targeted, cloud-based, collaborative, mobile-friendly apps that will effectively cut IT out of the loop.”
The Remedies
- Choose Wisely – If you’re just starting out in IT, consider an educational path that will turn you into one of the field’s elusive, highly valued “purple squirrels”. These sought-after professionals are often experts in hot, emerging technologies.
- Get Certified – If you’re already in the industry, your best bet may be to pursue an additional IT certification. For example, Capperella says that “the supply of IT pros that also know the agile development methodology is very low compared to the demand, and those workers will command a very high hourly and salary rate.” Not all certifications are created equal when it comes to increased wages, so choose carefully.
- Be Patient – According to the recently released 2013 Technology Salary Guide from Robert Half Technology, “Base compensation for information technology professionals is expected to increase an average of 5.3 percent in the coming year.” Once again, the hotter the skill, the greater the salary increase – with mobile app developers predicted to see the largest bump, at up to 9%.
Shifts in salaries can also mean shifts in employment, especially in the demanding Bay Area IT job market. Whether you’re looking for a new IT position, or need top-notch technical talent, the technology staffing specialists at Bayside Solutions can help. Contact us today!
