Pay Trends: Unfriendly But Not Unmitigated

By Ericka Chickowski  |  Posted 2009-02-19

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Trees don't grow to the sky, as the old investing saw has it. We've seen that with home prices and stock values. Now IT pay premiums are proving the same point.

The latest results in the IT Skills and Certification Pay Index (ITSCPI) recently released by Foote Partners are bringing back expectations to solid earth.

The market value for non-certified IT skills dipped in the last three months of 2008 by 0.5 percent after four years of steady gains. The slide in premiums paid for IT certifications continued a long-trending descent, dropping 1 percent in the last quarter of 2008 and 5 percent for the year

In spite of this, there do seem to be glimmers of hope for certain specializations as CIOs dial in their operations to increase efficiency and productivity. As David Foote, ITCPI author and principal at Foote Partners, puts it, certain skills are “counter-trending” in the face of across-the-board decreases. These include skills in architecture, process management, security and messaging and communications.

Foote says it’s no surprise that overall skills pay premiums for both non-certified and certified skills categories took a dip this year, particularly in the three- to six-month snapshots offered in the report.

“Across all companies we’re seeing wacky things happening and you know there is more to come,” he says.

Layoffs effect even those who keep their jobs. Every IT worker’s layoff diminishes the individual because they’re all involved in the same broad technology market. The long and short of it is that the market is flooding with plenty of talent right now as layoff notices from tech firms such as Microsoft, Cisco and Novell come fast and furious, not to mention large-scale enterprise layoffs that are sure to cut deep into operational departments such as IT. The most recent U.S. Bureau of Labor Statistics reports found that more than half-a-million Americans lost their jobs last month, pushing unemployment rates up to 7.6 percent.

Some of the specializations particularly bloodied in the last six months include operating systems skills, web and e-commerce skills and application development skills. Applications developers should especially temper their expectations for princely perks and salaries, Foote says. He believes that developers are among those groups most likely to get cut first within enterprises and big technology firms.
“Applications development is down because there's a lot of talent out there right now without jobs,” he explains. “You can get people cheap.”

The overall picture looks grim at the moment, but certain numbers in the Foote report, as well as other studies, show that there are enough sun breaks in the clouds to keep geeks from despairing.

A recent Computer Economics report showed that analysts there expect modest overall gains in pay, projecting 2 percent increases in median IT pay for 2009. And the most recent BLS report showed that even amid prevalent layoffs, certain IT categories saw net gains in positions in January, including Management and Technical Consulting Services, Data Processing, Hosting and Related Services, and Computer and Peripheral Equipment categories.

Within the non-certified skills categories Foote examined, five saw growth in the last year. And Foote found that even those professionals with certifications may finally see some benefit again from that signed piece of paper after many consecutive quarters of declines in certs premiums.

“Over the last three months certification skills as relates to non-certified skills took much less of a hit,” Foote says. “Usually in a recession certification starts going up in value because people start looking at streams of candidates and finding it’s like sipping from a fire hose. They put a job out and get so many people they tend to then choose, if all things are equal, the certified person.”

The premium for certifications looks particularly strong in the security niche, which is generally doing well even though the pay landscape is shifting.

“The CISSP, the vaunted gold standard for security management, that's down a few percentage points,” Foot says. “Right now we're seeing some decline in those (management skills) and some flux going more to the people in the trenches.”
For example, one of the more dramatic increases can be seen in the security network architect category, which saw pay increase by 14.3 percent in 2008.

This follows a more general trend, which is seeing architecture and business process skills get bumped in pay, both in certified and non-certified skills, as more and more IT departments look for ways to save by eliminating redundant infrastructure and practices.

“One of the big headlines here is architecture. SOA may be diving over a cliff, and yet architecture continues to be rewarding,” Foote says. He believes that is due to the fact that “there is a lot of energy right now in creating efficiencies.”