Houston-area IT salaries are expected to increaseslightly in 2010 as Houston’s economy recovers.
As the Houston economy begins to recover and hiring picks up, IT salaries are expected to increase upwards of 4 percent in 2010. While 4 percent growth represents the high end of the range for top performers in 2010, IT salary growth is likely to trend towards the low range of estimates - approximately 2 to 4 percent . The forecasted 2 to 4 percent salary growth range contrasts with traditional 4 to 6 percent increases. Given the current state of the economy many companies are budgeting 0 percent increases with one-off increase exceptions for top performers. As the economy continues improve, we are projecting more one-off exceptions in order to retain key employees.
While most Houston companies utilized cash bonus programs averaging 5 to 10 percent of base salaries, we anticipate that bonuses will be lower or even eliminated in 2010 due to the squeeze on corporate profits [ibid].
The Houston-area IT labor market remains strong compared to the rest of the country for highly qualified people that possess specialized skills. These specialized professionals will require appropriate, and perhaps aggressive, compensation to be attracted to and retained by an employer. Many of our clients with limited open positions are using this time to top-grade existing staff. Consequently, passive candidates with high-demand skills in secure positions will need greater incentives to change jobs. To attract these candidates, we recommend that you add 5 to 15 percent to the salaries shown in this survey in order to extend a competitive offer.
Good people are still hard to find and retain.
With all the cuts in staff, reduction in benefits, and increasing work load, many employees are feeling stressed and unappreciated in their current situations and are open to a change where the perception of greener pastures exists. It only follows that the utilization of an employee retention strategy becomes even more critical to protecting your resources.
For those companies that have had cuts in compensation, it will take years under normal increases to get back to par. For those employed under such circumstances, it makes sense to make a move and recover the lost compensation in one move. We are seeing an increase in employed candidates from such companies.
Several CIO’s have expressed to us their assumptions regarding management’s position concerning increases. These CIO’s believe that management views the market as being slow enough that there are not enough options available to even result in turnover at this time, thereby enabling them to assume that valued staff would not be leaving for lack of options. While this may be true for the general population, for IT professionals, the unemployment rate is still 2-3 percent lower than that of the general population. Additionally, there are clearly options for “A” players who are aggressively being recruited.
Impacts on Hiring
How will this impact hiring? First, consider that there are two groups of people in the market today: (1) the unemployed; namely those who are anxious to get back to work and are more apt to take lesser positions at reduced salaries, and (2) those who are employed and have to be recruited and enticed to make a move. As the employment market begins to improve and more companies are beginning to replace open positions and create new ones, there are several schools of thought on the best way to bring people on:
Option 1: Do you hire candidates who are well- and/or over-qualified for positions and use them as a skills upgrade, offering them less than what they were making as a market adjustment? While they may seem sincerely happy to accept such positions and get back to work, is this really a long-term solution for them? Since most people have not adjusted their standard of living, it could be a short-term fix for both parties just as easily as it could be a great opportunity for both.
Option 2: Do you follow traditional hiring protocol, hire someone who is working or unemployed and will grow into the position, and offer them 5-15 percent beyond what they’re making in order to attract and keep them?
Keep in mind that there are some very good people caught up in either corporate restructuring or a bad market, experienced staff who have a lot to offer on a long-term basis. Realize, however, that several of our clients are continuing to request that we find them talented staff who are currently working, basing their theory on the premise that most companies kept their best people.
As more companies take advantage of the opportunity to top-grade their staff, the competition for top performers increases, and these top candidates have more choices.
The 2010 Houston IT Salary Survey is an effective tool to use in guiding your salaries throughout the year. Please note that the salaries represented in this survey are based on current salaries from the last quarter of 2009. These salaries are equivalent to what your
employees should have been making during this time frame.
If you would like more information about this survey, or would like to discuss your current hiring objectives, please contact James Del Monte, President of JDA, at 713- 548-5444.
We wish you and your company continued success, and we look forward to serving your IT staffing needs in 2010.
1. “2010 IT Executive Survey”, JDA Professional Services, Inc., 4th quarter 2009.
JDA Professional Services, Inc. conducted an annual survey of Houston-area IT executives in the 4th quarter of 2009. The survey responses were provided by more than 90 Houston-area IT executives from companies whose IT departments range in size from 10 to over 100 employees.