IT Workers: Under Pressure and Underpaid

The economy is strengthening, yet IT satisfaction is declining. Here's why IT workers are feeling the strain.

Who couldn't use some good news these days? John Arnold, CIO at FedMed, a healthcare financial services organization in Rockville, Md., is ready for some. Four years ago, his IT staff was downsized from 14 employees to four, and they have experienced the familiar squeeze of salary freezes and increased workloads.
Since then, business has stabilized, and an acquisition last year injected new energy in the form of interesting projects, better benefits and the promise of new growth, Arnold says. 
But he and his staff don't want to wait much longer for that energy to materialize into tangibles like raises and the go-ahead to hire more people.

So far, he says, camaraderie, loyalty and a strong sense of purpose, not to mention a dearth of employment opportunities, have kept the team together. "But if the company starts booming as a result of the acquisition and we don't see an adjustment in compensation, there will start to be some issues," Arnold says.
Many IT professionals share Arnold's frame of mind. And while there's reason to be hopeful, the skies still haven't completely cleared. Our survey shows that increases in total average compensation, salaries and bonuses are all higher this year than they were in 2010.

Respondents reported that total average compensation (including salary and bonus) is up 1.4%, whereas the increase reported in the 2010 survey was just 0.1%. Likewise, this year's survey shows an overall 1.5% salary increase and a 0.3% increase in bonuses, while the 2010 survey found a 0.7% increase in salaries and a 6.6% drop in bonuses.

These findings correlate with fall 2010 data from job search site Dice.com, which showed that IT salaries had increased slightly from the previous year, from $78,900 to $79,400.
Compared with last year's results, fewer of this year's respondents reported budget cuts, salary cuts or freezes, hiring freezes, permanent layoffs, training cuts or canceled projects. And fewer mentioned the economy as a challenge (28% this year, versus 31% last year).

But more than half of this year's respondents reported being "significantly affected" by budget cuts and heavier workloads, with 66% saying they expect continued workload increases in the next year.
Other findings indicate that IT professionals are growing impatient. Even with the uptick in pay, satisfaction with total compensation in relation to job responsibilities has decreased: In our 2010 survey, 55% of the respondents said they were "very satisfied" or "satisfied" in that regard, but the percentage of respondents choosing one of those answers fell to 50% this year.

In fact, 22% said they are less satisfied with their job now than they were a year ago, and 19% are less satisfied with their overall compensation. "The uncertainty with the healthcare situation is increasing employee contribution rates and out-of-pocket expenses," says a senior manager at a telecommunications giant.

Squeezed Dry

Consider the case of a director of technology at a small manufacturer in the South. He's the sole IT resource supporting about 60 users across six companies in five states, and he occasionally provides mechanical engineering support. "Like most in these lean times, my workload and what's expected of me has increased, though my salary has been flat for three years and bonuses were down to zero from about $6,000 the prior year, which was also down from the prior year," he says. Meanwhile, employees must contribute more to health insurance, and other benefits have been cut.

Overall, 48% of the respondents reported that their base salary stayed the same or decreased from a year ago. Among those respondents, 62% said they've been affected by a salary freeze. It's no wonder then, that 40% reported feeling that they've plateaued financially over the past two years, and 33% said that they've lost ground. Only 27% reported gaining ground financially. Asked if they think they are paid fairly, more than half (52%) said they feel underpaid in light of their roles and responsibilities.

That may be due to the fact that 86% said that they have felt more pressure to increase productivity or take on new tasks. That can affect morale, even for those who consider themselves to be well paid -- especially if they've seen others get laid off. "As the layoffs continue, only those who can prove their worth can feel relatively safe," says a systems engineer at a U.S. telecom giant. That state of affairs has created a politicized atmosphere in which self-promotion is a survival tool. "It's a sign of tough times when you have to think about sacrificing your ethics not just to get ahead, but to simply survive," he says.

The systems engineer believes the situation may improve only when business picks up and management has to offer bonuses to keep people from leaving the company. "I believe those times for us may be on the horizon," he says.

Others agree that that type of pressure will help correct the balance of compensation and workload. Indeed, a senior manager at AT&T says management won't see the light until there is "a significant decrease in the experienced workforce" as a result of people retiring or moving on to new jobs at other companies.

He expects tensions to rise as people with flat salaries and increased workloads become aware of the discrepancy in total compensation between lower and upper management -- and see higher-value work go to contractors. And even with offers of higher pay, it may be difficult to entice employees who leave to come back as contractors, the senior manager says, because of "the stress and resentment currently being experienced by these workers in the current environment."

Tom Silver, Dice's senior vice president for North America, reports that about 40% of IT professionals say the way to earn more money is to move to another employer. That seems to indicate that people sense that the job market has more opportunities these days. Indeed, the No. 1 career concern among Dice survey respondents is no longer the possibility that their positions could be eliminated (just 15% chose that response, down from 25% last year); rather, it's the desire to find appropriate positions for their skill sets. "If people are no longer afraid of their position being eliminated, that gives them more confidence to move to another job," Silver says.

Some people switch jobs not for a pay increase but for security, better benefits or a less stressful business climate. For example, one CIO moved from a struggling bank to a smaller one that's profitable but pays 9% less and doesn't offer senior management bonuses. "Years ago, I just chased salary," he says. "But in the 'new economy,' I look for different attributes in a career."

By Mary Brandel

April 4, 2011 06:00 AM ET

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