ICT Remuneration &
Recruitment Trends
Phillip Tusing
Global Marketing Manager
ICT Skills Shortage Conference
1-2 May 2008, Sydney

1. ICT remuneration trends
2. What drives ICT remuneration trends?
3. Perspective from ICT professionals
4. “Shift in the balance of power”
5. ICT Recruitment Trends
6. Case Study
7. Conclusions

Only 5% of
Australians are happy
with their salary in
their current job
Source: SEEK, Employee Satisfaction and Motivation 2007.

50% of Australians
say ‘salary’ is a key
reason to change
jobs.
Source: SEEK Employee Satisfaction and Motivation 2007.

VIDEO

Nationally
IT salaries grew by

Average % increase in IT salary:
Comparison between different national
surveys
5.5%
4.6% 4.3% 4.4% 4.5%
4.2%
National AIM (L) AIM (s) Mercer ACS AIIA
(AIM)
Source: Australian Institute of Management, Mercer, Australian Computer society, Australian Information Industry Association

IT Salary Increase 1997‐2008 vs CPI
5.2 5.2
5.1 5.1
4.6
4.5
4.3
4.0
3.8
3.4
3.1
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

All sectors are not equal ‐ % increase in IT
Salary by sectors
Insurance 5.8%
Consulting 5.3%
Other non‐Manufacturing 5.3%
Education 4.7%
Software Development 4.7%
Other Manufacturing 4.6%
Banking/Finance 4.5%
Defence 4.4%
Public Sector 4.3%
Computer Services 3.7%
Source: ACS Salary survey 2007

How does Australian IT salaries
compare globally?

Switzerland $150,945
Denmark $131,798 How does
Belgium $129,753
Australian IT
UK $126,562
salaries
compare
Ireland $115,896
globally?
USA $115,115
Germany $114,290
Canada $100,509
Hong Kong $96,739 IT Manager Salary
Australia $95,144
Source: Mercer 2007 IT Pay Around the World Survey

Average salary of IT managers in
Australia
$145,000
$125,000 $130,000
$120,000
$95,000 $100,000
2002 2003 2004 2005 2006 2007
Median Salary of IT Manager : $118,087 (ACS)
Source: Greythorn Salary Index 2007/2008

Female IT staff earns 20% less than
their male counterparts
$98,684
$81,906
Women Men
Note: Women represent just 15% of workers in the ICT
industry Source: Computerworld salary survey

Female/Male pay disparity is a
national trend. Average weekly
pay is higher for men.
$1,158
per week
$968 per week
Source: ABS, AUSSTATS

Median Salary of Computer
Science graduates in 2007
$43,200
$49,488*
Source: GraduateCarreers.com.au
* Data from MyCareer.com.au real‐time data

How IT graduates fare against other
industry
Dentistry $70,000
Engineering $50,000
Computer Science $43,200
Education $43,000
Nursing $42,000
Life Science $41,000
Law $41,000
Business $40,000
Architecture $36,200
Source: GraduateCarreers.com.au , 2007 Average graduate (median) Salary is $43,000

Female graduates still paid
lesser than male counterparts.
$45,000
$43,000
$42,000
Male National Female
Source: GraduateCarreers.com.au , 2007

Factors driving/influencing
IT remuneration trends in
Australia.

1. Consistent Economic Growth
5.1%
4.6%
4.0% 3.9% 3.9%
3.5% 3.5%
3.2%
2.9%
2.7%
2.0%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Consistent Australian GDP growth rate. High labour participation rate .

2. Low unemployment rate in the IT
sector ‐ currently 3.84%
12.4 12.4
10.6
7 7.2
6.7
6.2 6.3
5.9
5.41
5.04 5.1
4.7 4.5
4.3
4.1
5.1 5.1
4.3
4 3.8 3.84
3.4
3.1
IT Unemployment Rate
Unemployment Rate
IT Salary Increase
2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: ACS & ABS

3. Technology is pervasive in Australia
Image : Flickr, copyright zinkwazi

ICT is everywhere, accounts for
4.6% of GDP
Contributes more to GDP
than the agriculture,
forestry, fishing, defence and
education sectors.
Drives 85% of productivity
growth in the manufacturing
sector and up to 78% in the
services sector.

4. Global IT budgets growing
6%
12%
8%
7%
8%
$2,432
$2,226
$1,840 $1,995
$1,584 $1,715
2003 2004 2005 2006 2007* 2008*
Source: Forrester Research. * Forecast Image: Flickr , Fort Photo

Spending in Asia‐Pac continues to grow
9%
$649
15%
$561
13%
$159
$481
13% $138
$424
13% $375
$118 $152
$332 $105 $128
$95 $106
$83 $70
$95 $59
$89 $49 $106
$75 $42 $93
$33 $37 $83
$63 $73
$57
$125 $143 $162
$84 $92 $109
2003 2004 2005 2006 2007* 2008*
Computers and peripheral equipment Communications equipment Software
IT services and outsouring IT salary and benefits Source: Forrester Research. * Forecast

5. Human capital cost: 40% of IT
budgets spent on Salaries &
Benefits.
Computer &
Peripheral
equiptment, 20.0%
Salary and
Benefits,
Communication 40.0%
Equiptment, 10.0%
Software,
10.0%
IT Services &
Outsourcing , 20.0%
Source: Forrester Research.

6. Demand & supply
imbalance of IT
professionals

Demand ‐ National Job Vacancies
continues to be high
Source: ANZ

Demand for IT Professionals
IT job Vacancies number
High
March 2008, Index 235.2

IT Jobs Galore
29,252
vacant IT jobs on SEEK
• 7,955 jobs on
mycareer.com.au
• 4,406 IT jobs on CareerOne
• 3,726 jobs on Jobserve
• 100,01 jobs on IT2
Source: Job boards; Data collated in May 2008

IT sector consistently has the most
vacancies
29,252
20,155
16,689 16,510 16,153
13,500
Source: Seek, 22 April

Supply ‐ No of ICT Professionals
514,000
268,000 employed in
the IT industry
Source: ACS ICT Industry Report, 2008

Supply Dwindling
18.5% fall in university IT enrolments
23.6% fall in undergrad IT enrolments
73402 70786
67103
59819
2002 2003 2004 2005
Source: IT Education Bubble, www.acds.edu.au

of employers would hire more
IT graduates if appropriate
candidates were available
Source: GraduateCarreers.com.au

Skills/Jobs in demand
Analyst/Programmer 6394
Business Analyst 2473
Help Desk/Support 2247
Networks & Systems 2187
Project Management 2114
Consultant/Funct. Consultant 1723
Sales: Pre & Post 1395
QA/Testers 1365
Database Dev. & Admin 1185
Architect 1119
Engineer: Software 967
Management 929
Engineer: Network 914
Telecommunications 618
Internet/Multimedia Dev 568
0 1000 2000 3000 4000 5000 6000 7000
Source: SEEK May 2008

IT SKILLS in Demand
•CISSP •ORACLE
• C++/C#/C •Peoplesoft
•Java •SAP
•J2EE •SIEBEL
•Network Security
•Sybase SQL
/Firewall/
Server
Internet Security
Source: IIMI, MODL (Migration Occupation in Demand List )

7. IT Skills rapidly changing
2,500 documented programming languages.
Demand for new skills put pressure on rates.

Example: Open Source
industry grows quickly,
$ 500 million in
revenue each year
32
21
17
4
1993‐95 1996‐99 2000‐03 2004‐07
Source: Waugh Partners, Census Report 2008

Ruby on rails
2005 = 0 jobs
2008 = 48 jobs

8. Changing Labour &
Work Dynamics
• High labour participation
rate ‐ 65.2%
• Ageing population in IT
• Changing employment
arrangements

Changing work arrangement: Rapid
growth of contracting work is
pushing up salaries.
21455
7132
Contract Jobs Full‐Time Jobs
Source: Seek, 22 April

8. Globalisation
Global Outsourcing to grow by 8% in 2008
No Impact 67%
Gotten Expanded/New
… 58%
Lost my job 6%
Had to be retrained 5%
Impact of outsourcing on
Taken a pay cut 5% IT professionals
Been promoted 4%
Relocated to new city 3%
Been Demoted 1%
Source:informationweek.com

9. What employers
Values dictates IT salary
levels.

Experience/Skills
• Industry experience
• Technology skills
• Sector experience
• Years in IT

Education/
Certifications
MBA degree is worth as
much as 10 years of IT
workforce experience.
An IT professional with an
MBA degree earns 46%
more than one with just a
bachelor’s degree
Source: Management Science, March 2008

Business/Soft
skills /Fit
• Communication skills
• Business acumen
• Team player
• Driven
• Leadership qualities
• Problem solver
• Cultural Fit

predictions!

Source: Dilbert, Scott Adams

Increase in IT salaries this year

15‐20%
Asia‐Pacific

Recession or no recession,
companies are chasing IT talent,
regardless of the remuneration
costs involved.

But, is money an end‐
all solution to attract IT
talent?

Anybody
recognize this
man?
Charlie Ayers , Google Chef

Google credits its success to free
Food & Beer

Companies are migrating to
“Total Rewards”

“ Workers today aren’t as interested as
they used to be in hefty compensation
packages and fancy retirement plans.
What they really want – more than
anything else – is direct and personal
control over when, where, and how they
work”
Deloittes, Competing for Talent
A survey of talent trends in technology and telecommunications, 2008

1. Pay and Salaries
Base Salary
Bonuses
Short‐term incentives
Long‐term incentives
Profit sharing
Annual lump sum payments
Source: Mercer 2006 : Measuring the Returns on Total Rewards

2. Benefits
Retirement
Health & group benefits
Vacation
Flexi time
Company services
Facilities
Salary sacrifice
LAFA
Source: Mercer 2006 : Measuring the Returns on Total Rewards

3. Career Growth
Training and development
Career opportunities
Lateral careers moves
Learning new skills
Performance management
Source: Mercer 2006 : Measuring the Returns on Total Rewards

Work‐life balance
Recognition
Responsibility
4. Intrinsic factors Team work
Leadership
Culture
Company image
Source: Mercer 2006 : Measuring the Returns on Total Rewards

Pay,
5%
Only a minority
5% of companies
in Asia‐Pac define
Pay & benefits, Pay, benefits, rewards as strictly
22% careers & intrinsic
factor, 43% financial.
Focus on intrinsic
Pay, benefits, as well as extrinsic
careers, 30%
rewards
Source: Mercer 2006 : Measuring the Returns on Total Rewards

2/3 of companies are looking at
total reward strategies.
9% 5% 5%
24% 29% 30%
Pay, benfits, careers,
12%
intrinsic factors 22%
26%
Pay, benfits, careers,
Pay, benfits 55%
40% 43%
Pay
USA & Canada Europe Asia‐Pacific
Source: Mercer 2006 : Measuring the Returns on Total Rewards

Perspectives
from IT
Professionals!

“ I have no loyalty whatsoever. I'm loyal
to whomever wants to pay me……..
companies have NO loyalty at all for
employees. I figured, fine...if that's
the case, then I'll treat them the same
way. If I'm just a body....then they are
just a paycheck, and I'll go wherever
the biggest paycheck comes from.
”
Cayanne8, Forum participant, Slashdot.org

Only 37% of IT
professionals are
satisfied with their
current role*
Note: SEEK’s survey put the figure at 56% (but
survey data bands together technology and
Science professionals together)
Source: Hudson - Candidate buying behaviour 2008

ICT professionals – prolific job searchers.
66% are either actively or passively
searching for a job.
IT 66%
Sales 61%
Legal 60%
Accounting & Finance 58%
Banking 57%
Marketing & Communications 57%
Financial Service 56%
Government 54%
HR 53%
Supply Chain 53%
Support 52%
Engineering 49%
Telecom 45%
Property 43%
Source: Hudson - Candidate buying behaviour 2008

63%
of IT professionals will
change jobs because of
financial reasons
Source: Hudson - Candidate buying behaviour 2008

Money is
important, but
ICT professionals
are screaming
for more.

Top 8 – ‘Nice to haves’ for IT professionals
Work/Life Balance 63%
Better Salary 52%
Good Standard Benefits 50%
Appealing industry 45%
Company reputation 44%
Advancement Opportunities 43%
Good cultural fit 38%
Work with latest technology 23%
Source: Hudson - Candidate buying behaviour 2008

regardless IT Staff ‘loyalty’ is out the door!

Loyal IT staff are a minority
Loyalist,
Seekers, 13%
13%
Approachables,
33%
Explorers,
41%
Source: Networkworld, salary Survey 2007

19.7%
Attrition rate among IT professionals (AIIA) or
20.6% (AHRI)
Source: AHRI , AIIA

Source of IT candidates
…
Promotions/lateral transfers within 71.7%
Corporate website 68.4%
Internet job boards 67.1%
Employee Referrals 61.8%
Contractor Conversions 50.0%
Search Firms 41.4%
Internal dedicated IT recruiter 40.1%
…
Promotions/lateral transfers from 38.2%
Internships 19.7%
College/Campuses 18.4%
Job Fairs 17.8%
Newspapers 12.5%
Hire back outsourced staff 9.9%
http://www.gartner.com/hcm/pdf/ITCMS_Overview.pdf

Golden age for ICT
professionals?
1. IT Skills are in demand
2. Salaries/reward growing & more
flexible
3. Employment in a growth and critical
industry
4. Career choices/options abounds
5. Unprecedented access to job and
salary information
6. Little geographic barriers to jobs
opportunities
7. Always a ‘sellers market’ for
talented professionals
8. Attempts to win IT talent is driving
remuneration and recruitment
innovations

“When land was the scarce
resource,
nations battled over it.
The same is happening now
for talented people.”
Stan Davis & Christopher Meyer, futureWEALTH

Section 2
Fundamental Shift in the recruitment
Landscape. How company reacts.

connecting employers and talent solution providers
www: destinationtalent.com.au
email: phillip.tusing@destinationtalent.com.au
phone: 0402 416 767 or (02) 9212 0702
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skype: phillip.tusing
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