In 2021, the average compensation for all IT professionals will increase by only 2.05%, according to the business consultancy’s mid-year salary survey. In 2021, the median salary for IT professionals at large enterprises was $100,022, and $95,681 for medium-sized firms.
However, in 2022, eligibility for IT professionals increases to 5.61%, increasing the average salary for all IT professionals from $95,845 to $101,323. The median salary for an IT executive increased to $180,000.
According to Victor Janulaitis, CEO of Janco Associates, salaries could increase by another 8% in the coming year.
“We project that salaries for IT professionals in SMBs will exceed inflation. In larger companies, we think it may lag as salaries are higher,” he said.
The recent salary increase was mostly due to the shortage of qualified IT professionals when organizations were working on digitization projects. great resignationand inflationary pressures, according to industry analysts.
According to the US Bureau of Labor Statistics (BLS), the overall US inflation rate in 2022 was 7.68%. Over the past year, US inflation climbed to a high of 9.1% in June, returning to 7.1% by December. (This means that the prices of goods and services in December 2022 were 7.1% higher than a year earlier, according to the Consumer Price Index.)
Even as inflation picks up in 2022, the pool of IT talent shrinks as employees quit to re-evaluate their career and personal lives. Employers were also rolling out more technology projects in response to the impact of the global pandemic on remote work, sales and services.
Over the past year, more companies are investing in IT with an emphasis on e-commerce and mobile computing.
“At the same time, with cyberattacks and data breaches on the rise, CIOs are looking to harden their sites and lock down data access to protect all of their electronic assets,” the Janco report said. “Added to this is a growing array of mandatory requirements from the EU along with the GPDR and US federal and state requirements to protect the privacy of individual users. All these factors are driving the demand for experienced IT professionals and the salaries they can pay. increase demand.”
In addition, retirements among IT workers increased as more baby boomers opted to return to work, Janko noted.
Tony Guadagni, senior principal analyst in the HR practice at Gartner Research, said the 5.61% pay increase cited by Genco Associates over the past year “passes the sniff test.”
“It lines up very well with what we’ve seen,” Guadagni said. The 2% to 2.5% growth in qualifications Gartner typically sees across all industries.
Gartner’s data is based on a November survey of 150 organizations around the world; The merit increase figures are based on “key contributor” employees — or the 80% of employees who are neither underperforming nor overperforming, Guadagni said.
However, he objected to the 8% growth Janco Associates projects for IT professionals in 2023.
“That’s one that I think is a little hard to rationalize at the moment,” Guadagni said. “Most of the organizations we have spoken to have already made plans for what is expected to be an increase in eligibility in the first quarter of 2023. calendar year.”
The balance of power, which used to be in favor of IT workers, has shifted somewhat in favor of employers, according to Guadagni, due to a “turbulent business environment” — particularly over the last eight months.
“I think organizations have a lot more leverage in compensation discussions than four months ago. I think a lot of it is based on high-profile layoffs…we’ve seen from major technology platforms,” Guadagni said. Said. “Today we saw salesforce announcement They are being cut off from 10% of their workforce.”
Other high profile layoffs in the last few months Meta (parent company of Facebook) and Amazon,
Even in light of the well-publicized layoffs, the shortage of tech talent remains.
Findings from Janco’s 2022 Salary Survey indicate that organizations added 190,000 IT positions during the past four quarters, but there There remains a wide gap between the available positions And there are workers available to fill them.
According to Janko, salary compression is also occurring because “new hires” are offered salaries at the top end of the salary range for existing positions — often receiving more than current employees in similar positions.
Janko argued, “Staffing and retention is now the primary priority of C-level management.”
The report also mentioned:
- The attrition rate is rising faster in medium-sized enterprises than in large enterprises;
- wage levels in medium-sized enterprises are rising faster than in large enterprises;
- Consultants who enhance IT staffing and skills are in high demand now.
While projections for future tech hiring peaked back in November (the latest month for which figures are available), future postings still total about 270,000, according to CompTIA, a nonprofit organization for the IT industry and workforce. Openings for software developers and engineers accounted for about 28% of all tech job postings last year. Data from CompTIA shows that demand for IT support specialists, systems engineers, IT project managers and network engineers also remains solid.
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