Salary watch: Cashing in specialty skills

You can't party like it's 1999, but at least IT salaries have stabilized in recent months.

Keep in mind two things when sorting out IT salary news: Demand and salaries for specific skills (think network security or SQL DBA) continue to rise. And the big picture is not as bright. There may be record-low unemployment figures in the U.S., but that hasn't translated into higher IT salaries -- at least, not yet.

"What we are seeing is a good, solid, stable hiring market, but we don't see a huge translation into increases in wages," said Jim Lanzalotto, vice president of strategy and marketing at Yoh, a Philadelphia technology recruiting firm that measures pay for "high-impact" technology positions every four weeks.

"What's happened is that companies have gotten so much productivity out of the people in place that the increase in demand has not materialized," he said. "In technology sectors there has not been an abundance of hiring relative to other post-recession periods."

A sample of skills in demand

Network security

Java developer

Cisco engineer

Oracle DBA


Applications development

Source: Yoh Index

Average wages for technology professionals in the second quarter 2005 were flat compared to the Q1 2005, according to Yoh. The company, which bills itself as the one of the largest staffing firms in the country, derives its data from the wages of roughly 5,000 temporary employees hired by more than 1,000 businesses.

CIO searches for DBA with experience

Sorting out the various predictions and data on IT salaries is a tricky business, particularly when companies are squeezing more work out of existing employees and promoting from within to fill open positions. In recent weeks, there have been predictions of a looming shortage in IT workers, as the number of college students opting to major in computer technology continues to drop. The declining supply of IT graduates does not seem to have put much pressure on wages yet, or even translated into a dearth of IT job applicants."I am not hearing there is a shortage of talent out there," said Judy Sweeney, research director at AMR Research Inc. in Boston. "Finding the right people and retaining them may be a challenge, but I am not hearing from CIOs that they can't find good people. They are being very picky, and expecting a lot more than hiring kids out of college."

Mike Cloutier, vice president of information services and CTO of Peet's Coffee & Tea, had much the same message. The Seattle-based maker and retailer of specialty brews is growing its IT department of 21, and quantity of applicants is not the issue. "I haven't seen a real shortage of IT personnel. It's more the quality I've had issues with, said Cloutier, who has been looking for a database administrator/data manager for six months. "That is very unusual. But in fairness, the skill level I need -- SQL developer/data management -- is higher than your average retailer or average manufacturer is looking for."

The salary snapshot from Yoh bears out earlier long-term predictions from other staffing firms, as well as recent anecdotal information from some analysts. Robert Half Technology, the Menlo Park, Calif., staffing division of Robert Half International, predicted in late 2004 that average starting salaries in 2005 would remain relatively stable, rising a modest 0.5%, even as hiring picked up. The firm also noted, however, that technology professionals in certain high-demand specialties, including security and quality assurance, could expect higher salary increases. Leading the pack were system auditors, whose salaries could climb as much as 5.1% on average in 2005, as companies continued to deal with compliance issues such as the Sarbanes-Oxley Act. On the other hand, salaries for desktop support techs were expected to drop by 3.8 %, as those jobs continued to be automated or outsourced.

A July survey released by Foote Partners LLC, a New Canaan, Conn.-based research firm that tracks skills pay for IT workers, pointed to big salary increases for some specialty skills. Those included networking, which saw a 5.1% rise; database skills, which grew 4.3%; and application development tools, which grew 2.1%.

The Yoh Index also identifies the top 10 jobs in greatest demand and their hourly wage. Network and Internet security skills continue to make the list, Lanzalotto said. "We still see a lot of applications work done around Sarbanes-Oxley. The demand in that marketplace will be strong for a while to come." Investment in ERP systems is generating work in portals and application development, he said. And in the scientific sector, data management and clinical management positions are in demand, as pharmaceutical and biotech companies start to build their pipeline of products.

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