Annual IT Salary Survey Finds Dissatisfaction

BobB writes "A storm seems to be brewing in the IT job market. Pay raises have continued to outpace inflation, and bonuses are downright impressive — 11.6% on average. Yet, as the 2007 Network World Salary Survey finds, dissatisfaction over salary packages is rampant."

Comments

The secret to maintaining a healthy IT job market.

[QuantumG]

Get the head hunters to contact IT geeks every 6 to 8 months and offer absolutely plumb jobs. When you get em on the phone, "refresh their job details" and then tell them that plumb job is gone, but you'll keep an eye out for them.. just what salary range are you looking for? Oh, well, with your skills you should be getting paid a lot more than that.. etc.

Housing up 50% & Salaries up only 11% = !Satis

[Adeptus_Luminati]

I blame it in part on your (USA) housing bubble. Wait 2-3 years for the housing market to drop 50% and you should all be very happy! (Assuming you didn't first go bankrupt on your ARM sub-prime mortgage! heh)

Up here in Canada, you're lucky to get 4% raise/Yr in IT. Wages in general have been quite stagnent in the past 3 or 4 years (except Alberta Oil cities), yet our housing prices are climbing in mutliple urban cities at double digit percentage rates /Yr. Don't worry, our bubble will also be popping soon... then maybe we can all go down to Cuba an cry over our losses with cheap Tequilas & Cubans (cigars) in hand.

Adeptus

European salaries != US salaries

[seti]

What amazes me is the difference between average IT salaries in Europe and the US. Here in Europe, an average 30-year-old IT worker could expect to be making about 3000 euros before taxes every month (i.e. 36,000 a year). Reading that article, I gather the average US IT salary is about $80,000, which is about 56,000.

Can anybody explain this huge difference? Is the cost of living in the US just so much higher than in Europe? Or does IT just pay a lot more in the US?

Re:European salaries != US salaries

[Bryan Ischo]

I'll try. These figures are for the Bay Area, CA (pretty much the epicenter of IT in the USA if not the world). And I'll keep it in Euros to make the comparison easier, using today's exchange rate of 1 Euro = 1.41 USD.

Taxes on salary in various 'slices' (this is federal income tax + social security tax):

16.2% for 0 to 5,354 Euro
21.2% for 5,355 to 21,737 Euro
31.2% for 21,738 to 52,624 Euro
34.2% for 52,625 - 67,286 Euro
28% + 4,171 Euro for 67,287 - 109,787 Euro
33% + 4,171 Euro for 109,788 - 238,688 Euro
35% + 4,171 Euro for 238,689 Euro and the remainder above

(the reason for the last three amounts is that social security tax is only on salary up to 67,286 Euros, salary in excess of that is not assessed social security tax)

You also have to add in state tax, which in CA is between 1% and 9%, depending on how much you make. It's too much trouble to work that into the table above, because the ranges are all different, but if you make more than 28,616 Euros (which just about any person working in IT would), it's 9.3%. So add that makes the tax rates closer to 40% - 50% total for the medium to high tax brackets.

Furthermore, there are small taxes assessed for things like state disability insurance, but these don't sum up to more than 1% usually.

State sales tax: 7.25% (if I rememer correctly)

- Medical insurance: free (paid for by employer) if you have a decent job, anywhere from 350 - 900 Euros per month (depending on the size of your family and your age) if you do not. I personally have never had to pay for medical insurance, and most IT workers would be the same.
- Childcare: ~5 Euro/hour
- Gasoline: 0.56 Euro/liter (= 3.00 Dollar/gallon)
- Public transport: about 3 Euro for 25KM by train, or 6 Euro for a 25KM with a return ticket (I am basing this on $4.00 USD for Caltrain between two "zones", which I am guessing is about 25 KM)

As to new cars, they are much cheaper in the USA and there are no additional taxes beyond state sales tax (although I have never bought a new car, I am just assuming this is true). That E 32,840 car probably would only cost E 22,000 total in the USA.

As you can see, the USA income tax rate is not so much different from your rate, when you factor in all income taxes paid (we pay alot of individual taxes in the USA - federal, state, local (sometimes - in New York City you have to also pay a local income tax!), social security, disability, etc, etc) the rate is typically somewere around 33% total in the USA (if you have a good I.T. job and are making $80,000+ USD per year), whereas it looks like around 40% in your country.

The difference is that sales tax (you call it VAT) is higher in your country (20% vs. 7.25%) and most individual items probably cost more in your country (the cost of gasoline, childcare, and a car demonstrate this).

One big factor you did not mention is the cost of buying a house or renting an apartment. In the Bay Area a modest size family home is at least $700,000 USD (about E 500,000), and renting a moderate apartment is about $1,800 per month (E 1,300). Owning a home in the Bay Area is very, very expensive (compare to homes in Canton, Ohio where my mom lives - houses there are about $150,000 USD, or about E 100,000).

In general, the USA is a very inexpensive place to live.

I have been living in New Zealand for almost a year now and I'd say that it's somewhere between the USA and your country in taxes and cost of living; more expensive than the USA but not as expensive as Europe.

Re:European salaries != US salaries

[Corgha]

Can anybody explain this huge difference?

This could get political, so please don't take any of these comments as judgments on the personal worth of Americans or Europeans, or about which nations are better that which other ones. There are lots of fine folks on both sides of the pond, and there's more to life than salaries and GDP. I'm just trying to explain the salary difference, since you asked. I'll just throw these possible reasons out there and we'll see what sticks...

According to an article in The Economist earlier this year (sorry, don't have a link), American companies get a higher ROI (usually measured in increased productivity) on investments in IT projects (this actually goes with the company, not the worker, so it's probably down to management, but in any case a higher "R" makes you willing to be a little more free with the "I").

Also, Europeans work significantly fewer hours per year than Americans, on average. Like 15% fewer, according to that linked speech from the President of the European Central Bank. Looking at the yearly salary, then, distorts the figure for how much people are being paid for each unit of labor input (though, even per hour worked, Americans are more productive, so that further raises the value of the labor to the company).

Put another way, according to that same ECB article the US has a 50% higher GDP per capita than Europe (Europe's is two-thirds that of the US), so the output is higher, too. And some of that trickles down (not much, but some).

And, of course, unemployment in America is much lower than in Europe (for August, it was 4.6% in the US vs 9% in, e.g, Germany). If you have twice as many people looking for jobs, well, the employer can offer lower pay and someone will be glad to be earning more than zero.

So, those would make it reasonable for companies in the US to be willing to pay higher salaries.

Plus, it's easier to terminate people without cause in America, which means poor performers with their low salaries (who would otherwise drag down the average) can be taken off your books immediately, without a lengthy process of review and appeal. In some places in Europe, it can take a while to fire someone and may not be possible in borderline cases, and you have to demonstrate cause. Since IT workers often have privileges you don't want them to use during a hostile termination, this sometimes leads to the ludicrous situation of paying someone not to come to work for a few months (and that person is probably not going to get a raise and a bonus and bump up the average, eh?). Of course, despite this, unemployment is lower, anyway, so it's not like the US is cheating by not counting all the $0 salaries, unless maybe you count the huge prison population ;)

Similarly, you have to take into account the large concentrations of American IT workers in places like Silicon Valley. Silicon Valley is a very risky place. The companies that succeed are often flush with cash. But the companies that fail don't pay anybody, and unemployed people don't count into the average. And, of course, the cost of living is high in Silicon Valley.

So, those effects would also tend to raise the average.

Much of this stuff could be explained as the result of the different paths America and Europe have taken with running their societies, specifically with how much risk they are willing to tolerate. But, like I said, there's more to life than high salaries. And those American salaries are getting lower in real terms by the day as Americans' purchasing power is eroded by the falling dollar. So, enjoy your vacation days and social services and don't fret too much about it. ;)

Is there anyone happy with their salary?

[imaginaryelf]

I mean, who is going to answer yes?

Re:Is there anyone happy with their salary?

[dropadrop]

Yes, I'm always happy for a couple of months after my last raise.

Re:Is there anyone happy with their salary?

[yaman666]

Wait until you get a family or decide you want to buy a house. Raising children, mortgage, college tuitions... those costs pile up. :-)

Re:inflation

[dropadrop]

It might not be inflation, rather your lifestyle adapts to how much you earn.

The unsatisfied worker

[markov_chain]

Quoted from bottom of article:

The 2007 Network World Salary Survey finds these characteristics are typical of network professionals who are more dissatisfied with their jobs than not:

• Has been in current position six years or longer and promoted only once or not at all.
  
• Makes less than $60,000 a year in a staff-level position, particularly working on collating and stapling, training or does help desk or tech support.
  
• Has no direct reports.
  
• Is not expecting to receive a bonus in 2007.
  
• Is not expecting to receive a paycheck in 2007.
  
• Works at a company with more than 1,000 employees, often in banking.
  
• Lives in a Southwestern state.
  
• Has earned a bachelor's vs. holding no college degree.
  
• Has been asked to move his desk more than three times in 2007.
  
• Has had a stapler taken away by his manager.
  
• Is not permitted to listen to the radio except from 9-11 and even then only at a reasonable volume.
  

Re:inflation

[Aeron65432]

Actually virtual all economists agree that the inflationary rate is overstated by around 1%. It ignores increases in quality, tech innovation, and the substitution effect. (if prices at grocery stores rise, more people will go to Walmart for their groceries yet this is not counted) It's also acknowledged by most groups in the Federal Reserve.

Chances are if your wages are really increasing by that percentage, your spending or consumption is up (did you buy that iPhone..?). Inflation has recently been around 2.5-3%, realistically around 2%...so if you're exceeding that in salary increases, it's probably not due to inflation.

Wish I was paid like this in the UK

[damburger]

I graduated with a degree in Computer Science in 2002, and have had awful trouble finding a well paid job. Most of the jobs advertised were web development, which were always badly paid (my first job out of university paid barely above minimum wage). These jobs usually ended before 6 months, once I'd completed a couple of projects for them and before they would be legally required to give me redundancy pay.

There were a couple of good job openings (I was once approached by a recruitment agency to apply for a job with Google in Dublin) but of course seeing as I was not the only desperate compsci grad in the West Midlands competition for them was pretty fierce and I didn't get them.

I was trapped in web development, but I was pretty good at it. I constantly taught myself new technologies as I developed sites, worked on projects in my spare time to expand my skills, and had a good eye for front end design from a job I had in the print industry. Despite this I was never paid more than £12k a year for web development. My current job is pays £14k, doing office admin work for the police, and that is the most I've ever been paid for anything.

Then it seemed to be looking up. I'd gone for a support job at a large US company, and at the interview they had been so impressed with my aptitude scores and my general IT knowledge they recommended me for a better paying job (£20k) with their programming department. Sadly, I fell foul of their Gestapo-like HR department, who decided not to give me the job because, during one of the interviews over the phone to a woman in Texas, I didn't sound 'positive enough'. I'm not sure how positive a man from Yorkshire is supposed to sound to a Texan over a transatlantic phone line, but there you go.

This is why I'm now starting a Physics degree. Fuck the IT industry, it's not worth it. I slaved away for cockle-picking money, and when my talents were finally recognised I was rejected because of some idiotic HR impression of me, rather than the evidence of my aptitude tests. Hopefully, physics is a field where people are rewarded for their knowledge and intelligence rather than whatever smarmy 'people skills' HR are after. Perhaps I'm being Naive, but it can't be much worse than being in the IT industry.

Re:Wish I was paid like this in the UK

[jcr]

I didn't sound 'positive enough'

Truth to tell, you come across as rather sullen here. I don't think I'd hire you, either.

-jcr

Re:Wish I was paid like this in the UK

[Bryan Ischo]

> Sadly, I fell foul of their Gestapo-like HR department, who decided not to give me the job because,
> during one of the interviews over the phone to a woman in Texas, I didn't sound 'positive enough'.

Sorry, that is really rough. I had a similar problem once where I got to the final stages of the interview process, the guys I interviewed with were all ready to hire me, but just because I *asked* the HR interview person if in the future the company would be considering allowing employees the occasional work-at-home day (not that I expected to work at home at all, but was thinking about the future when I might have kids).

I think it's really stupid that technology companies let their interview process get hamstrung by HR departments. They should not have HR interviews at all. If the people you're going to work with like you, the HR department really ought not to have any say in it at all.

I was dissatisfied so I asked for $65535

[sweet_petunias_full_]

Actually boss, never mind that pay raise I wanted, just make my salary exactly $65535 and I'll forget about the whole thing. You are using excel 2007, right?

Re:inflation

[Aeron65432]

Slashing interest rates to record lows (sub-1%) is going to create a subprime mortgage crisis. Anyone can see that coming, people will get easy mortgages fast and not be prepared for the adjustable rate rising. Many economists predicted a crisis, some didn't think it would be very bad. Frankly, this downtown is a necessary correction.

Inflation is probably not outpacing your salary, all those reasons inflation is overstated are rock solid. Compare your spending and consumption with last year. If your taxes increased (property taxes often do) factor that in. Unless your salary remained constant or you took a pay cut, it is impossible for inflation alone to account for a decline in real income, probably taxes and new purchases.

I still have too much.....

[Anonymous Coward]

.... month left at the end of my salary.

Salary is similar to menstruation:

• It comes once a month
• It lasts for about 3 days
• When it doesn't come you're in trouble

Money is important but not the only consideration.

[MikeFM]

I really like my job and the people I work with but I need my salary doubled to even begin to be satisfied with it. I'm willing to give up a lot to have such a great job but I think I should still make enough to support me and my wife without my wife needing to work too. If my salary doesn't go up quite a bit in the next couple years I'll probably be forced to find another job which is really not what I want to do. The company I work for claims that wages it pays are lower than average because we are located in an area with a lower cost of living. That's great and all but I'd still like to make the median income in this state at least. Cost of living may be cheaper but that only represents around 1/4 of my monthly bills. The other bills are just as expensive as they were when I lived in California.

If I could support a family while sticking at my current job I'd probably stay for a long time. The schedule is flexible, the work is fun and just challenging enough to be interesting, there is nobody micro-managing me and I mostly manage myself, my co-workers are friendly, and upper management isn't retarded (they're intelligent, honest, and fun to be around). I'm trying to do my part to earn the company more money so that my position can pay for it's own raise in pay.

Re:The secret to maintaining a healthy IT job mark

[an.echte.trilingue]

I see this more as an indication of wide-spread management failure in the industry than of money per se.

Ironically, (unreasonably) high wage demands typically have more to do with the non-tangible compensation that a job offers than the actual amount of money employees make. That is, when people are happy with their job, when they enjoy the social contacts, when they get to work in a nice environment and, above all, when they have a sense of purpose, then they make reasonable wage demands. When the job sucks, they spend 8 hours a day thinking "I don't get paid enough for this shit." In that case, no wage will be high enough.

One of those things that management should be doing is ensuring that their employees have the intangibles to keep them happy and productive. That is something that our much derided PHBs learn to do in their MBA programs. However, I think that the IT industry is having issues in this arena because the skill set required to perform the job is so specialized that programmers who get promoted to managers never bother to acquire "managerial" skill sets (or they just don't put any value in managerial skill sets) and people who do have managerial skill sets are so wildly incompetent in IT that you would not dream of hiring them to manage coders or SAs.

just my $.02
-mat

Re:Money is important but not the only considerati

[encoderer]

Wow, what backwards thinking.

So nowadays, the mere act of RAISING your own children is "overprotection?"

I agree, children should have social outlets. A morning pre-school for 3 and 4 year-olds is probably a good idea. But your notion that all day childcare is somehow > stay-at-home mom is a little silly to me.

Re:Money is important but not the only considerati

[BigDogCH]

I shouldn't reply, but this is insane....
Following your logic, we should send kids to daycare because 75% of abuse happens from relatives? Sorry, but If you truly believe that your kids are better off in the hands of someone "Not their parents", then you shouldn't have had children. Maybe the percent is high because they spend most of their time with close relatives?
Yeah, I heard that most car accidents happen within 10 miles of home, so I am moving.

Re:Money is important but not the only considerati

[Attila Dimedici]

Studies have shown repeatedly that children who spend a significant amount of time in childcare (I forget what the number of hours involved was, but it was less than the amount of time that would be necessary if both parents work full time) are much more likely to be bullies and have other socially undesirable traits. Additionally, there have been several studies that indicate that children who are home schooled have significantly better social skills than those who went through the school system (considering that the researchers were expecting the opposite result, these latter studies are rather telling). Sorry, I no longer have the references for either of these studies, but I'm sure if you do a little research you can find them. My suspicion is that children are better socialized by being exposed to adults who have already learned how to be responsible than to other children who have not yet learned this.

Re:The secret to maintaining a healthy IT job mark

[Anonymous Brave Guy]

The most "fun" work environment for the worker is one of unstructured cooperation where there are no rules.

That sounds like it ought to be true, but IMHO it isn't. I think IT mainly attracts three kinds of people, and if you look at what drives them, it's never really that.

Firstly, you have those who are only in it for the money. They probably took some university course just so they could work in IT, and they probably aren't very good at their job. Most of them don't get very far, because their attitude is entirely selfish, and the only motivator they have is making as much money as possible from doing as little real work as possible. In their minds, they'll have fun later, when they're rich.

Then you have the "journeyman" developers and sysadmins: those who are happy to work in a well-paid industry, but basically see it as just another job. These people represent the largest proportion of the industry, IME. They are typically competent but unexceptional in their skill and aptitude, and approach their jobs with a reasonably professional attitude. The best motivator for these people, IME, is simply to let them get on with their job: give them clear instructions about what needs to be done, and some relevant background information if they're the kind of person who likes to see how they fit into the bigger picture, and then just get out of the way and let them do their work. These people typically recognise the value of good organisation, and respect strong but flexible leadership. They don't go to work to have fun, but they will find their work environment most pleasant this way and rarely demand more.

Finally, you have the guru types. Often, these are the guys who got into IT because they enjoy the field. If they took a university course they enjoyed or they get paid well, that's almost incidental, and just a bonus on top of having a job where they enjoy the work. These guys know their subjects inside out. The big variable — and the thing that separates the gurus who are great people to have in your group from the gurus who are liabilities — is how well these guys do things outside their own development or administration work.

Those who develop people skills, understand the business context for their work, cooperate with management, and give constructive input to these areas from the point of view of the IT guy, tend to go far, though they tend to stick to a technical path rather than moving into management. Motivation for these guys often comes from seeing a good result from their work, and they will work in whatever way seems best to achieve that goal. Again, this isn't usually unstructured cooperation; on the contrary, IME these guys are the ones most likely to want good processes in place, and to appreciate readily whether existing processes are helping or getting in the way. Often, these guys also value honest recognition when they produce good work, and like to know that when they make constructive suggestions they are being listened to.

Of course, you also get the gurus who want to have everything their own way. These are the guys who want their own office and to work in their own style. They want full-time ownership of the code they write (not that it matters since no-one else can understand it anyway) or the final say over any changes to their networks. These guys probably are motivated by unstructured work, but cooperation is a word that doesn't enter their vocabulary. Frankly, you're better off hiring a couple of less egotistical, less demanding, and far more pleasant and constructive journeyman types anyway than you would be getting stuck with one of these guys, who seem to be known as "rock star programmers" in trendy blogs.

So I don't think unstructured cooperation is really fun for any of the major types of IT guy. The good ones tend to appreciate enough structure to do an effective job, while the bad ones will cooperate only as far as is necessary to get what they want anyway, and often would prefer to stay under the radar and just do things their own way. Constructive anarchy doesn't really work for either group.

Re:inflation

[xelah]

I make $700 a seek

Remind me never to buy a storage array from you...