Good News for Application Developers…

Overall, there is a cautious optimism about new and ongoing opportunities in IT which may translate into increased compensation. "The market is starting to heat up again," says an IT executive with a southeastern government agency. "The highest demand is for Web developers with some mainframe knowledge to know how to link the two up."

Salary SurveyThe IT job market has been strengthening over the past year, but many organizations have been aggressively cost cutting, keeping their IT departments lean and mean, according to a new salary survey of 1,170 enterprise IT sites conducted by Enterprise Systems [Editor’s note: ADT and Enterprise Systems are owned by 101communications].

Among seven key IT staff positions covering responsibilities for applications and systems, four saw increases in average base salaries over the past year while three suffered downturns. The worst positions to suffer, and slowest to recover from the downturn earlier in the decade, are systems related jobs.

“In the past two years, the size of our IT staff has dropped from 150 to 95, leaving a user-to-staff ratio of 158-to-1,” laments one respondent, a manager with a government agency based in the Midwest. “Salary increases for this year barely top at 1.5 percent. The most sought-after skill is the ability to do everything with nothing.”

Application development and administration jobs, on the other hand, saw raises in recent years.

There are some other bright spots driving the latest salary increases for developers and administrators, according to survey respondents. “We are giving good raises to our employees—Microsoft certifications are drawing the best compensation,” says a manager with an IT development firm based in the Southeast. Another survey participant, a manager with a telecom development firm, speculates “security is going to be a big boom in the next few years.” He also identifies “larger-scale management of network services and capabilities for VoIP, video conferencing and more” as a career and salary growth area for IT professionals.

With all the hype and excitement around SOA and Web services, these should be heady times for application development managers. However, accelerated development may be tempered by outsourcing as well as IT budgets that continue to be tight. AD manager salaries have plateaued in recent years, and bonuses have slipped. AD managers—who plan, direct and control all day-to-day application development functions—are earning base salaries of about $86,500, roughly a 1-percent dip from last year’s survey.

AD managers are projected to earn bonuses of about $6,900, down slightly from last year.

Typical AD managers in the survey will see salary growth up to 24 percent throughout their careers. Salaries range between $74,000 at entry level to $98,400 for more than two decades of experience.

AD manager salaries are strongest within the high-tech and software sector, averaging $102,000. Financial services follow at $98,300, and AD managers in the services sector follow at $93,000.

Executives leading development for business-to-consumer systems average about $98,000, giving them the highest pay. Those overseeing development in organizations supporting supply chain management systems average about $93,200, which is also higher than average.

This is a good year for application programmers. Those who write and text code saw the largest jump in salaries across the IT staff positions covered in the survey for the second year in a row, and now average about $56,500—a rise of 6.6 percent over last year’s survey. Average base salaries for this position have risen by almost 15 percent since the beginning of the decade.

Bonuses have been healthy for application programmers too. Programmers are seeing bonuses averaging $2,665, up 11 percent over last year. However, app programmers have yet to recapture the bonuses they saw at the beginning of the decade.

Because many programmer jobs tend to be entry level, these salaries are the lowest in the survey, and long-term career and salary growth in this category is limited. App programmers who have remained in these positions for 10 years or more make about 37 percent more than their entry-level counterparts. The typical programmer in the survey has about six years of industry experience.

Programmers in mainframe and Unix shops make the most, topping $59,000 a year in base salary. By development language environment, programmers in CICS and COBOL shops fare best, drawing average salaries of almost $62,000 for CICS-based development and $59,000 for COBOL.

Companies deploying and managing supply chain management and business-to-consumer systems have the most generous compensation for programmers, paying annual base salaries of about $61,000 and $60,000, respectively. ERP skills also command close to $60,000 in base compensation for application programmers. “Rates are staying down but opportunities are picking up,” says one respondent, a manager with a southeastern IT service company. “ERP programmer skills are in high demand and in somewhat low supply.”

Application programming salaries are strongest within the high-tech and manufacturing sectors, averaging about $67,000 and $61,000, respectively.

Systems programmers are having the toughest year in terms of salary and bonuses. Overall, salaries for this category slipped from last year’s survey. Systems programmers—workers supporting the corporate infrastructure and networks—are earning base salaries of about $67,150, down almost 5 percent from $70,400 since last year’s survey. Salaries for this position have remained relatively stagnant since the survey first covered this position in 2002.

Systems programmers project they will earn bonuses of nearly $2,665, lower than last year. Typical systems programmers in the survey may see tremendous salary growth throughout their careers, however. Salaries range between $49,000 at entry level to $77,000 for more than a decade of experience.

Mainframe skills continue to be a strong suit for systems programmers, who earn an average of $71,100, outpacing their Unix counterparts by about $2,000. By development language environment, systems programmers in CICS and COBOLshops fare best, drawing average salaries of $72,100 and $70,200, respectively.

By application area, systems programmers in ERP shops receive the highest base compensation, averaging $68,700 in annual base compensation. Those in business-to-business shops follow with $68,000. Systems programmer salaries are strongest within the retail and distribution sector, averaging $81,200 annually.

Application programmer/analysts—who develop applications and environments—saw modest salary growth since last year’s survey, rising about 2 percent, an average of $63,800 to $65,200. Over the long term, P/As have seen their compensation climb by 13 percent since the beginning of the decade. P/As expect to earn bonuses of about $3,400 this year—about the same as last year, but substantially higher than earlier in the decade.

The typical P/A in the survey has about six years of experience. Long-term salary growth prospects appear solid for professionals remaining in these positions. P/As with 10 or more years of experience make 26 percent more than their less-seasoned counterparts. An entry-level P/A can expect to make an average of $57,500 a year, a figure that climbs to almost $73,000 for those with 10 or more years of experience.

P/As working in companies with e-business initiatives under way saw the highest payoffs. Those with companies with business-to-consumer implementations earn average base salaries of $66,700, while employees at business-to- business sites make $66,100.

By development language environment, programmer/analysts in CICS shops fare best with average salaries of $67,100, followed by those with C/C++ shops, with average salaries of $66,000.

P/A salaries are strongest within the healthcare sector, averaging $74,000 in annual base compensation. P/As in the high-tech and software sectors follow with $70,800, and those in the financial services sector receive $68,500.

App systems analysts working in mainframe and Unix shops earn the highest salaries for this position. Overall, however, systems analysts—who typically work with corporate management, end users and clients to plan and design systems—saw no growth in annual base salaries over the past year.

Currently, these IT professionals earn about $67,900, down slightly from $70,900 in last year’s survey. This is nearly 3 percent higher than average salaries in the first survey of this series, conducted in 2001. Although average annual bonuses for system analysts are the highest of the IT line positions measured in this survey, bonuses have fallen by more than 2 percent from last year (bonuses are down more than 4 percent from the beginning of the decade). System analysts look to earn $4,100 on top of their base salaries for this year.

The typical systems analyst in the survey has about nine years of industry experience. On average, system analysts with 10 or more years of experience make up to 39 percent more than their less experienced or entry-level counterparts. Systems analysts working with enterprise resource planning infrastructures fare best with $70,700 in annual pay. Salaries are strong at ERP sites across the positions covered in the survey. “Implementation of our new ERP is driving our salaries these days,” says an IT manager with a Midwest-based retailer.

Unlike last year, salaries at ERP sites are higher than business-to-business implementation sites. The survey reveals salaries at ERP sites average $69,700.

By operating system environment, systems analysts in Unix shops fare best, drawing an average salary of $69,100. However, this is only about 2 percent above the overall average. Those systems analysts working in Linux shops (distributed systems only) saw the lowest compensation, averaging just over $65,000 a year.

System analyst salaries are strongest within the services sector, averaging about $75,000, followed by retail and distribution and high-tech and software, both at $73,000.

Chart: Programmer/Analyst, System Analyst Salaries
Chart: Applications Programmer, Systems Programmer Salaries
Chart: Application Development Manager Salaries, Regional IT Salaries, IT Salaries by Industry, IT Salaries by Company Size