Tech salaries increasing, despite economy
Yes, you're reading that headline correctly. Tech salaries are growing, even as the economic pressures force industry-wide layoffs, according to Dice.com, a leading career site for technology and engineering professionals. More good news: While the national unemployment rate climbed to 7.6% in January, the unemployment rate for the tech sector was less than half that. According to a survey of more than 19,000 technology workers between August and November 2008, Dice tracked a 4.6% increase in average pay from the previous year -- and a rate at more than twice that for electrical engineers.
Yet, anxiety is climbing as fast as compensation. Dice reported the top concerns for technology professionals in 2009 are keeping skills up to date (22%), job elimination (20%), lower salary increases (14%), cancelled projects (12%) and increased workload due to staff cuts (10%), according to its survey. Supporting the concerns, Dice saw a 67% year-over-year increase in the number of new resumes posted to its site in Q4 2008.
Tom Silver, senior VP and chief marketing officer at Dice, discussed the survey results with Electronic Business via e-mail. What follows are excerpts of that conversation and data from the Dice survey.
Electronic Business: Why are tech salaries rising even as the economy falls? Is this true of every tech sector, including EEs?
Silver: The unemployment rate for technology professionals [as of late January] is 3.4%. Throughout 2008, the unemployment rate ranged from 1.9% to 3.5% -- reflecting a relatively solid market. We noticed the downturn in recruitment activity for tech professionals in the September-October timeframe, when the job count on Dice started to fall substantially. So all said, 2008 was a good year for compensation as tech professionals who are highly skilled and high performers were sought out in the market. In each of the industries we track, tech professionals did have salary increases whether you worked for a retailer, a bank, or a pharmaceutical company, and the list goes on from there. Salaries did increase for electrical engineers, 9.4% to $87,651.
Electronic Business: How do the top worries for technology professionals in 2009 compare to those in last year's survey results? Was "keeping skills up to date" at the top last year?
Silver: We didn’t ask that question last year, however, we’ve asked similar questions many times and keeping skills up to date is always a huge concern for technology professionals. There is an obsolescence issue with technology. In order to stay relevant and continue to increase your earnings potential, adding skills is the most direct path to higher compensation. Updating and broadening one’s skill set is important in any economy, but with the job market softening and the economy declining, technology professionals need to be as up to date as possible to have the best chance at a new job should they fall victim to a layoff. [See tables below.]
Electronic Business: The survey concluded in November. Do you think "position elimination," which came in as the second worry, would have been the top worry had the survey concluded later in the year as tech industry layoffs continued to mount?
Silver: We were concerned about that very issue. We had our statisticians crack the data pre-October and post-October to see if "position elimination" had become more prevalent. It was only slightly more prevalent and not statistically significant, so we felt very strongly that, even in a deteriorating job market, the number one worry was keeping skills up to date.
Electronic Business: I see that outsourcing was less of a concern overall. Was this concern at all higher for EEs?
Silver: It wasn’t when you look at EEs only. They didn’t deviate much from the overall average. Outsourcing as a concern for them was 8% versus 7% in total. The only spot where there was a larger concern was around cancelled and fewer projects --- 17% of EE’s ranked this as their top concern versus 12% as the population as a whole. On the flip side, Lower salary increases/lower billing rates was the top concern of only 10% of EEs versus 14% for the overall population.
Electronic Business: The survey found that by metropolitan area, smaller, less traditional US tech markets such as Charlotte, NC, saw the biggest salary increases, up 14.7% to $81,426, followed by St Louis, up 12.5% to $72,819. Why are the smaller, less traditional tech markets seeing the greatest salary growth?
Silver: Smaller markets tend to have a smaller talent pool to hire qualified technology professionals, so the swings in compensation at the margin can be greater.
Electronic Business: Dice mentioned "passive job hunting" as a growing trend in its statement on the survey results. What is this and why is that trend growing?
Silver: Passive job hunting is job hunting by currently employed people. It’s taking proactive steps like posting your resume on Dice, just in case something happens or maybe you are just open to a new opportunity. It’s a function of anxiety in the marketplace. Resumes posted to Dice.com from electrical engineers jumped 25% in December of 2008 -- a strong increase.
Electronic Business: Given the overall survey results and the 67% increase in the number of new resumes posted to Dice in Q4, how do the overall tech and specific EE employment environments look like as we move into 2009?
Silver: The job count on Dice is down 35% in January versus the same month last year, the equivalent number for EEs is down 29%. It’s going to be tough sledding for tech in the near term, but we highly doubt it will be as challenging as it was in the dot-com/Y2K bubble.
|2005-06||2006-07||2007-08||2008-09||Previous year % change|
|By US averages||$69,700||$73,308||$74,570||$78,035||4.6%|
|By top-paying job titles|
|Answer||Responses from total survery, %||Responses from EEs only, %|
|Keeping skills up-to-date/being valuable to employer||22%||23%|
|Lower salary increases/lower billing rates||14%||10%|
|Cancelled projects/fewer projects||12%||17%|
|Increased workload (due to staff cuts)||10%||7%|
|No concerns at this time||12%||11%|