IT Salary Report: How Do You Stack Up?

January 29, 2007
By James Maguire

The most recent IT salary numbers have been tabulated by Dice, the tech job site, and they have a rosy glow to them.

“Over the last 12 months, we’ve seen a 20 percent increase in the number of jobs posted,” says Dice CEO Scot Melland. “And that’s coming off of huge increases in ’04 and ’05. So this is still a growing tech job market.”

The increase in number of positions means it’s more difficult for companies and recruiters to find qualified people to fill these jobs. Consequently, the magic of supply and demand has pushed up pay levels.

The average IT salary rose a respectable 5.2 percent in 2006, according to Dice.

It’s this 5.2 percent increase that Melland, surveying all the job data, finds the most noteworthy. While this number is a national average – and therefore varies widely based on IT specialty and region – still, “You put that up against the averages for other industries, and other skill areas, and that’s great.”

Looking at 2007, Melland notes that it would be very hard for the tech industry to replicate the job growth of the last few years, as it emerged in 2003 from the slump. But the job trendline appears to be continuing upward.

Peering into the crystal ball for 2007 job growth, “I would foresee a continuation of what we saw in ’06, which was a nice steady growth across all the traditional technology skill sets,” he tells Datamation. “There’s going to be a lot of competition for qualified tech professionals.”

Average Salary by Title, 2005-2006

The following salary averages are based on a survey of 19,000 tech professionals:

IT Executive: 2005: $104,504 // 2006: $108,578

Project Manager: 2005: $93,009 // 2006: $96,475

Database Administrator: 2005: $81,301 // 2006: $85,441

Software Engineer: 2005: $78,807 // 2006: $83,524

MIS Manager: 2005: $82,824 // 2006: $82,510

Business Analyst: 2005: $77,158 // 2006: $82,288

Developer: Database: 2005: $73,768 // 2006: $79,911

Security Analyst: 2005: $74,874 // 2006: $79,412

Developer: Systems: 2005: $72,732 // 2006: $78,476

Developer: Applications: 2005: $73,636 // 2006: $78,037

Developer: Client/Server: 2005: $75,941 // 2006: $74,602

(Salary data courtesy of Dice.)

Not surprisingly, the IT professionals who command the top salaries are those possessing complex skills sets that require long experience to truly master. Hence, those experts who understand the labyrinthine intricacies of Sarbanes-Oxley compliance (SOX), or the big-picture challenges of Enterprise Resource Planning (ERP), can expect to be well compensated.

In addition to the skills listed below, Dice reports that some of the most consistently sought-after skills are Oracle (average salary: $85,049) and Java/J2EE (average salary: $82,851).

Average Salary by Technology Skill Set, 2006

ERP: $96,161

Sarbanes-Oxley (SOX): $91,998

CRM: $90,499

SOAP: $89,243

Solaris: $87,476

Business Analyst: $77,158

AIX: $87,309

SAP: $86,149

Microsoft Project: $85,870

Siebel: $85,861

Sybase: $85,049

(Salary data courtesy of Dice.)

One of the key trends seen in the salary report is the growth of the West Coast tech market. “What we’ve seen over the last couple years is the resurgence of Silicon Valley, and the resurgence of San Diego and Seattle and that whole part of the U.S.,” Melland says. “So now it’s reflecting in salaries.”

IT Salary by Metro Area, 2005 - 2006

Silicon Valley: 2005: $85,430 // 2006: $90,310

Boston: 2005: $79,211 // 2006: $80,308

New York: 2005: $76,382 // 2006: $80,006

Baltimore/Washington D.C.: 2005: $75,593 // 2006: $79,911

Seattle: 2005: $73,105 // 2006: $79,787

Los Angeles: 2005: $73,911 // 2006: $79,583

San Diego: 2005: $72,163 // 2006: $79,416

Denver: 2005: $74,823 // 2006: $77,317

Sacramento: 2005: $72,355 // 2006: $75,197

Chicago: 2005: $71,496 // 2006: $75,154

Phoenix: 2005: $70,023 // 2006: $74,976

Dallas/Ft. Worth: 2005: $71,494 // 2006: $74,656

Philadelphia: 2005: $71,881 // 2006: $72,786

(Salary data courtesy of Dice.)

Once again, the banking, financial services and insurance industries offered the best compensation packages to IT professionals – and also saw a healthy year-over-year pay hike. But notice that e-commerce, while the lowest on the list, enjoyed a dramatic percentage gain.

IT Salary by Industry, 2005 - 2006

U.S. Average: 2005: $69,700 // 2006: $73,308

Bank/Financial/Insurance: 2005: $76,092 // 2006: $82,504

Telecommunications: 2005: $72,430 // 2006: $78,003

Computer Software: 2005: $74,730 // 2006: $77,582

Government/Defense: 2005: $69,078 // 2006: $75,086

Medical/Pharmaceutical: 2005: $71,714 // 2006: $72,717

Manufacturing: 2005: $66,732 // 2006: $71,878

Internet Services: 2005: $65,426 // 2006: $71,854

Computer Hardware: 2005: $66,462 // 2006: $69,987

Retail/E-Commerce: 2005: $55,909 // 2006: $63,830

(Salary data courtesy of Dice.)

Perhaps the most surprising finding from Dice’s salary report: the largest percentage gains in 2006 were made by the least experienced workers. Why such a big increase for newbies?

It may be a reaction to the smaller number of computer science graduates, Melland says. “What you’re seeing is a little bit of supply and demand at the post college level.”

One of the factors causing the decrease in computer graduates is the slew of headlines about Indian outsourcing. Based on some media reports, the entire American IT industry will be relocated to Dehli sometime in the next 18 months. The reality is that offshore outsourcing currently eats up only a small slice of the domestic IT budget.

Additionally, news reports of tech layoffs in the 2000-2001 crash made IT look still less attractive.

The combined influence of these two factors have “created this perception that [IT] is a risky track,” Melland says. “In fact, when we do our satisfaction survey, what tech people are telling is that they would recommend this career track. And if you look at the pay and benefits, it’s very attractive.”

Average IT Salary by Years of Experience, 2005 – 2006

Less than 1 year: 2005: $37,471 // 2006: $42,414

1 - 2 years: 2005: $41,229 // 2006: $46,935

3 - 5 years: 2005: $52,363 // 2006: $55,922

6 - 10 years: 2005: $68,355 // 2006: $72,707

11 - 14 years: 2005: $80,933 // 2006: $83,907

More than 15 Years: 2005: $86,332 // 2006: $90,125

Surprising no one, the Dice salary report finds that the higher a tech worker's salary, the higher their satisfaction level. Is that because happier workers do a better job, and therefore earn more, or is it because without a sufficient salary, a worker can’t be happy? The truth may lie somewhere in between, but at any rate this data point probably isn’t IT specific.

“This has less to do with IT and more to do with that fact that, the people earning less are probably more likely to think they’re not being fairly paid, so that’s going to hurt their satisfaction level,” Melland says.

Average IT Salary by Level of Satisfaction, 2006

(The middle number indicates what percentage of workers fall into that category.)

Very satisfied: (14%) $91,234

Somewhat satisfied: (39%) $80,046

Neither satisfied nor dissatisfied: (14%) $70,497

Somewhat dissatisfied: (21%) $62,845

Very dissatisfied: (11%) $50,180

(Salary data courtesy of Dice.)

Unfortunately, the salary numbers below show that the gender gap in pay levels that runs throughout the working world also exists in IT.

If there’s a silver lining, it’s that the salary inequality in IT is far less than that of other industries. Melland notes that recent data from the U.S. Bureau of Labor shows that, across all industries, men make about 19% more than women. In contrast, the numbers from the tech industry look less onerous.

Percent Women Earn Less Than Men by IT Industry, 2006

Medical/Pharmaceutical: -11.5%

Telecommunications: -10.0%

Computer Software: -9.8%

Bank/Financial/Insurance: -9.5%

Government/Defense: -8.4%

Retail/E-Commerce: -8.3%

Manufacturing: -8.0%

Internet Services: -7.5%

Computer Hardware: -7.1%