US Study: IT salaries take a tumble

Average salaries for top-performing CIOs and other IT managers are beginning to fall for the first time since the 1980s, according to a compensation study released today

The study by Janco Associates, of Park City, Utah, found an overall decrease in the benchmark salaries paid to IT professionals in the first six months of 2001 compared to the last six months of 2000. A benchmark salary is considered the compensation that a company would need to pay to attract the best performers in a given IT position, including base salary along with bonuses and benefits.

Janco CEO M. Victor Janulaitis said 2001 was the first widespread drop-off in benchmark salaries since 1985. Dropping corporate profits have eaten away at the performance-related bonuses paid for many top-level IT positions, and the general economic slowdown has led to a slowing demand for IT professionals, Janulaitis said.

"It's not only a hunkering down of IT budgets but the downturn of the economy in general," he said.

Some of the highest paid have been the hardest hit. The five top-paying IT positions at large companies in the study all saw declines in their benchmark salaries of between a half percent and 37 percent during the first six months of this year. Benchmark salaries for chief information officers fell the fastest, down 37 percent, to $317,699, from $434,416 (£228,432 from £312,384) during the last half of 2000.

One reason the top positions were hurt the most is because companies increasingly are paying CIOs and other IT vice presidents on executive compensation models, where a large chunk of their compensation is based on company performance, Janulaitis said.

The study covers compensation trends among about 70 IT positions and is based both on a survey of 986 large and midsize enterprises along with compilations of other surveys. It is conducted twice each year by Janco, a management consulting company focused on IT.

Beyond the benchmark salaries, which are the highest paid for IT professionals in various positions, Janulaitis has noticed that base salaries have continued to rise even in these tougher times, but overall compensation has remained steady or has fallen for most of the positions. That's because companies are cutting back on bonuses first while continuing to increase base salaries in what remains a competitive field for IT talent.

The latest study wasn't all bad news. IT positions involved in e-commerce and security continue to see steep salary increases as those skills remain in high demand, Janulaitis said. The benchmark salary for a data security administrator at a large company was up 14 percent to $69,681, while the benchmark for an e-commerce specialist at a large company rose 16 percent to $80,438.