Pay cuts for IT professionals with less than five years experience and contract consultants contributed to a 2.6% salary drop in the technology sector last year, according to a survey released by Dice Inc. yesterday.
That puts overall IT salaries at the lowest levels since 2001. The average IT salary in 2004 was $67,800, down from $69,600 in 2003, according to the survey.
Many IT workers who lost jobs later accepted new jobs at lesser salaries, and that helped drive the survey numbers down.
PC technician salaries dropped 10% in 2004 to $33,600, while help desk salaries dropped a whopping 9.5% to $35,300, according to the report. The survey was based on salary data submitted to Dice.com by more than 23,000 IT professionals.
Salaries for contractors and consultants also contributed to the overall decline: Contract workers in 2004 reported earning an average of $82,000, 9.1% less than 2003 salaries and almost 20% less than they reported in 2001.
IT management professionals topped the salary survey with an average annual paycheck of $101,500. Project management professionals were next in line, at $85,700.
The good news for IT employees is that demand for technology professionals in many fields is rising. Last month, there were about 60,000 job postings on Dice.com's job board, compared to about 30,000 listings in January 2004.
The survey shows a rise in IT salaries in Los Angeles, Atlanta, Washington, D.C., and other areas where defense industries are located. Heightened homeland security has also increased demand for IT professionals.
"Going forward, I would fully expect the salaries to go up again as demand increases," said Scot Melland, CEO and president of New York-based Dice.com.
Top paying skills for 2004 included Enterprise Resource Planning ($80,600) and full-time workers with Unix and C/C++ skills, earning $75,500 and $66,100, respectively, according to the Dice.com survey.
Rich DeBrino, CIO for Everett, Wash.-based Advances in Technology, a software and services provider for health care and biotechnology companies, said salaries for lower-skilled workers dropped last year.
"It wasn't like that two or three years ago," DeBrino said. But his higher-skilled employees are enjoying salary increases. "Yes, we will pay our good people what we have to pay them."
Andres Carvallo, CIO for Austin Energy in Austin, Texas, said his IT team received a 3.5% inflation-adjustment salary increase last October, but that salary levels always lag behind.
The problem, Carvallo said, is that technology and new skills outpace the rate at which corporate human resources teams are prepared to adjust salaries.
"That's always an ongoing challenge," Carvallo said.
Joyce Young, the CIO at CP Kelko/J.M. Huber Co., a food additives maker, said she's looking at increasing IT salaries by about 4% this year. If the Chicago company does hire new IT workers this year, Young said she'll likely increase salaries for jobs that are most needed in her shop, which means workers with SAP skills.
"Right now in Chicago, the SAP job market is pretty hot because there are several hot projects going on," she said.