Study: Hot IT Workers Get Fatter Paychecks

July 10, 2003 (PLANSPONSOR.com) - Despite the sluggish economy holding down IT salary increases in general, those with in-demand skills are getting more generous compensation, according to a Hewitt survey.

While Hewitt’s 2003 US HOT Technologies Survey found that the median base pay hike was 2.9% and total cash median increase (base pay plus bonuses) was up 3.5%, those with the most sought after skills did better than that in 2003. ( In 2002, the median increase for overall base pay was 4% and the median total cash increase was 4.2%.)

For example, Data Warehousing workers saw average base pay and total pay increases of 5.9% and 5.5%, respectively; professionals specializing in Microsoft Systems earned an average base pay increase of 5.7% and an average total pay increase of 4.7%; and Applications Programmers netted out at an average increase of 5.5% on base pay and 9.3% on total pay.

Customer Relationship Management, Enterprise Application Interchange and SAP are the top three specialties currently commanding the highest pay, according to the Hewitt study.

Hot Skill Workers

As for bonuses and long-term incentives, 59% of all hot-skill employees earned a bonus, which averaged 9% of base pay. The most common types of bonuses were “planned individual” (29%), “discretionary” (16%) and “group incentive” (15%). In addition, 7% of these workers enjoyed long-term incentives (such as stock options), which is down sharply from 23% last year. On average, the fair market value of these incentives was 29% of base pay.

The Hewitt study also offered some insight into hanging onto IT workers. The survey revealed that the median voluntary turnover rate for IS/IT employees during the last 12 months was 4%, down slightly from 5% in 2002. The top reason these employees leave is promotion to a higher-level job at another company (42% of companies ranked this the number one reason). Other reasons include a chance to learn the latest technology (10%) and lack of a defined career path (8%).

Conversely, 27% of companies cite corporate culture as the main reason IS/IT employees stay with an organization, followed by work/life balance (19%) and a chance to learn the latest technology (13%).

In terms of recruiting, the study also found that the most common sources for hot-skill candidates are employee referrals and Internet recruiting (96% each), followed by internal transfers (78%) and search firms (64%). As for the effectiveness of recruiting sources, 23% of IS/IT hires at these companies came from internal recruiters in 2002, 20% from the Internet, 17% from employee referrals and 16% came from internal transfer.

Hewitt surveyed more than 100 companies for the 2003 survey. For more information go to www.totalcompensationcenter.com .

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