Jun 11, 2001 - Recession Hits IT Hard

Press Release - June 11, 2001

Recession Hits IT Hard – No Increases In The Last 6 Months – First Time Since 1985!!!

Park City, UT - M. Victor Janulaitis, CEO of Janco Associates, announced today results of its Mid-Year IT Salary Survey. In the ongoing survey, the effects of the economic downturn are reflected in the overall compensation paid at all position levels in technology. For the first time since 1985, there has been an overall decrease in the benchmark salary paid for top performers. Senior staff levels have been some good news; “base salary” has inched up while total compensation has gone down

“As the economy worsens, mid-sized organizations are effected more and thus are cutting costs and staff faster”, stated Janulaitis. “Many larger organizations have put hiring freezes in to effect as well as stretching out the time period between normal compensation increases.

In post interviews, Janco found reduced corporate earnings, which make up key components of most performance bonus plans, have driven the trend to lower total compensation. In addition, there has been a decrease in demand for IT professionals due to extensive head count reductions in IT in order to bolster earnings and from company closures. A factor not fully reflected in the study is the energy crisis in California. It is having a severe impact on the Bay-Area as more companies are announcing closures and “reductions in force” and hiring freezes. This should be reflected completely in the year-end study due in January.

With the bursting of the dot-com bubble fewer jobs are to be had. At the same time individuals who were in the dot-com world are now competing with the others in the non-dot com world. Many organizations are starting to “out-source” the e-commerce and Internet functions as executive management questions why revenues have not met projections.

At the same time, there has continued to be an increase in the Benchmark for SELECTED positions within the IT functions. These increases typically are isolated to the Internet and e-commerce arena. Below is a table showing some results.

Enterprise Size	*Position*	Base mean	Total Mean	*Prior* *Benchmark*	New Benchmark	Pct Change
Large	VP - Chief Information Officer (CIO)	$143,785	$166,566	$434,416	$317,699	-36.74%
Medium	VP - Chief Information Officer (CIO)	$132,550	$158,055	$490,559	$373,941	-31.19%
Large	VP - Consulting Services	$117,615	$122,074	$198,813	$163,869	-21.32%
Medium	VP - Technical Services	$114,439	$133,731	$268,784	$223,293	-20.37%
Medium	Project Manager - Applications	$70,433	$76,673	$167,039	$141,016	-18.45%
Large	VP - Technical Services	$121,381	$134,414	$240,616	$204,849	-17.46%
Large	Data Communications Manager	$63,903	$66,456	$74,489	$85,701	13.08%
Large	Data Security Administrator	$50,949	$51,666	$59,739	$69,681	14.27%
Large	E-Commerce Specialist	$64,875	$70,125	$67,833	$80,438	15.67%
Medium	E-Commerce Specialist	$60,500	$60,500	$60,300	$77,750	22.44%
Large	Project Manager - Network Technical Services	$68,924	$72,625	$89,518	$128,587	30.38%
Large	Average	$66,227	$70,318	$108,963	$108,275
Medium	Average	$61,097	$65,792	$113,224	$110,578

Base Mean – The “mean” of the base compensation excluding bonuses and fringe benefits.
Total Mean – The “mean” of total compensation - bonuses and fringe benefits.
Prior Benchmark – Benchmark published in our prior study
New Benchmark – The total compensation required to obtain / retain top performers

Over just the past six months, the mean salary level for all IT positions has been pushed to $70,318 in large enterprises and to $65,792 in medium sized organizations. This figure includes all forms of compensation comprising of items like bonuses and stock options to other special fringe benefits such as special trips. The survey of over seventy technology positions is based upon responses given in extensive Internet polling as well as a “survey of surveys” that includes data from across the United States and Canada. The complete 158-plus-page study is available in an electronic version for $99 and a paper version for $495, plus shipping and tax.