Tech industry has bounced back in a big way since the recession
When we issued our first IT Skills and Salary Report in 2008, the United States was on the cusp of a financial crisis of such magnitude that businesses are still feeling the reverberations today.
According to the United States Department of Labor, 8.7 million jobs were lost from February 2008 to February 2010. The unemployment rate rose from 4.7 percent in November 2007 to a peak of 10 percent in 2009. And while the tech industry is one of the country’s most profitable, it wasn’t immune to the perils of the economic recession.
An analysis of a decade’s worth of survey data reveals a majority of the “low points” fell within the 2008-10 window. Our 2010 report, which compiled survey responses from IT professionals in 2009, saw 10-year lows in raises, bonuses, employee training and manager salaries.
No deep examination is needed-just look at our raise and bonus data from the last decade. You can clearly pinpoint the timing of the recession and see the direct impact on IT professionals.
North American raises and bonuses took a dip in our most recent report. It’s unknown whether this is the start of a new trend or a one-year blip. It’s also important to know that IT salaries dropped in 2016 too but are on the rise again this year. It’ll be interesting to see if raises and bonuses follow this same trend when our 2018 reports comes out.
Overall, the salary figures are encouraging when you look at the last decade as a whole. In 2008, the average salary of our survey respondents was $73,963. In our most recent report, the average salary for IT professionals in the U.S. and Canada was $88,640. That’s a 16 percent increase in 10 years.
To put that in perspective, the Social Security Administration reports that average individual income in the U.S. rose roughly 14 percent from 2008 to 2015. (Income numbers are not available yet for 2016 and 2017).
While income levels are gradually rising throughout the country, salaries in the tech industry are considerably higher and growing at a faster rate.
The salary growth rate is even higher for survey respondents who hold some level of managerial responsibility. Since 2010, IT managers have reported a 21 percent increase in salary (going from $87,934 to $111,174).
And while salaries have increased, the duties of decision-makers haven’t exactly gotten easier. Our data shows that IT teams are getting smaller. In 2015, 49 percent of IT decision-makers managed teams of 10 or fewer. That number is up to 52 percent in 2017.
Larger teams haven’t fared well either. In 2015, 11 percent of decision-makers managed teams of 500 or more. That number is now at 9 percent.
As staffs shrink, IT leadership is under more pressure to better guide the use of resources to meet the information needs of the organization. Frankly, they’re asked to do more with less. Skills gaps are quickly becoming a major issue, and security threats are constantly evolving. Salaries may be up, but so are the challenges facing management.
IT professionals agree on one thing: Training is vital to organizational and personal success. Hardware and platforms are constantly evolving, but technology is only as good as the people who work with it. There’s a critical need to invest in training, especially as skills shortages surge.
It’s no coincidence that an increase in IT training has resulted in an increase in IT salaries. Look at the training data since 2010-it’s nearly identical to our salary data from the same timeframe.
Naturally, salaries tend to increase over a 10-year span because of inflation, but IT income is outpacing current inflation rates. According to the U.S. Bureau of Labor Statistics, from 2008 to 2017, the cumulative rate of inflation is roughly 13 percent. IT salaries have risen 16 percent. A greater emphasis on training may not be the only reason for that 3 percent gap, but it’s certainly a major factor.
Traditionally, our reports have revealed that IT professionals earn higher salaries at larger companies. That’s not a huge surprise since larger companies tend to have more resources dedicated to training and hiring.
But continual training is equally important to companies of all sizes because:
- professionals at larger companies must have relevant skills to stand out amongst a stronger crop of peers.
- IT decision-makers must make efficient use of training resources at smaller companies with traditionally smaller budgets.
Salaries vary considerably based on state and region. In the U.S., the Pacific region (California, Oregon, Washington, Alaska and Hawaii) has taken the top spot in average salary for our last two reports. In our inaugural survey in 2008, it was the fifth highest region. Average salaries for Pacific IT professionals have increased 29 percent in 10 years from $73,176 to $102,775.
The Mid-Atlantic region (New York, Pennsylvania, New Jersey) has seen a similar growth (25 percent).
In terms of states, Washington, D.C. has had the highest IT salaries since 2013. IT professionals in D.C. reported an average salary of $125,746 in our most recent report. That number has skyrocketed 38 percent since 2008.
Some of those high-paying IT jobs have spilled over to Virginia as well. Washington’s neighbor has consistently been the second-best state in terms of salary, and Connecticut is also on the rise.
One state that has dropped in our rankings has been New Jersey, which was the top-paying state in 2009 and second in 2010 and 2011. It currently ranks outside of the top five.
We’ll have a better understanding of worldwide salary trends in the coming years since 2017 was the first time we surveyed global professionals. In our first year, the data shows the United States and Canada own a considerable salary advantage over the rest of the world.
- United States