Meta: IT Salaries Set to Jump 10-15% By 2007

Boosted by an economy that's expected to improve, the META Group is predicting that IT salaries should start picking up again after several slack years.
IT salaries should increase by as much 10 percent to 15 percent over the next three years, according to a new study.

The META Group, a Stamford, Conn.-based industry research group, just released a report stating that analysts there also note that these predicted salary increases could drive up labor costs to the point that they will represent 55 percent of an organization's IT budget.

''In this recession, IT people have tended to fair better than other kinds of staff out there,'' says Maria Schafer, senior program director with the META Group. ''And the picture going forward is looking even better for IT... If you've got the right skills, you will be seeing things perk up. If you don't have those skills, you better get them.''

After interviewing IT executives, Schafer says they specifically are looking for high-tech workers with training and experience in program management, application development and networking. Schafer adds that to her surprise security skills came in further down the list of must-haves.

''When we ask people this question, the skills that come up are application development, Internet skills and Java. Linux didn't come up this year as a separate skill, but it's still in demand... It's a shift from a couple of years ago, when companies gave us a list of specific platforms or tools that they needed. Now they're expressing their needs in broader terms.''

According to Meta's 2004 IT Staffing and Compensation Guide, 24 percent of those surveyed say application developers are the most difficult IT workers to retain. Another 13 percent say employees who specialize in security have a high turnover, and yet another 13 percent point to workers in networking jobs.

The stats pertaining to application development are particularly surprising considering the number of those jobs that are being outsourced and offshored to save company's money. Outsourcing is picking up in practice and general acceptance and some of the first jobs to go are those in call centers and those in application development. Many analysts have been loudly warning workers that they need to acquire new skills if application development is all they have on their resumes.

Schafer says not so.

''I think the outsourcing issue has gotten a huge amount of attention, but the reality is that it's a difficult thing to do and to do well,'' she says. ''Clearly, outsourcing has begun to happen and it will increase over time. But fewer companies are doing that than most people believe or that the mass media would have you think.''

The Grass is Greener

Schafer says IT salaries will grow simply because the economy is expected to improve in the next 12 months and with IT jobs opening up again, workers will have the chance to leave their old jobs for greener pastures. That means CIOs and other executives will have to fork out a little extra cash to keep IT workers happy and in place.

''The 'grass is greener' mentality must be dealt with head-on,'' says Schafer. ''CIOs must begin to work more closely with human resource professionals to implement strategies that address human capital management trends and innovative retention programs -- an area in which IT has historically been reactive rather than proactive.''

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