IT Remuneration Trends 2008 Short Version

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A presentation on IT remuneration trends in Australia.

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IT Remuneration Trends 2008 Short Version

  1. ICT Remuneration &  Recruitment Trends Phillip Tusing Global Marketing Manager ICT Skills Shortage Conference 1-2 May 2008, Sydney
  2. 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 
  3. Only 5% of  Australians are happy  with their salary in  their current job Source: SEEK, Employee Satisfaction and Motivation 2007.
  4. 50% of Australians  say ‘salary’ is a key  reason to change  jobs. Source: SEEK Employee Satisfaction and Motivation 2007.
  5. VIDEO
  6. Nationally  IT salaries grew by 
  7. 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
  8. 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
  9. 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
  10. How does Australian IT salaries  compare globally? 
  11. 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
  12. 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
  13. 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
  14. 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
  15. Median Salary of Computer  Science graduates in 2007 $43,200  $49,488* Source: GraduateCarreers.com.au  * Data from MyCareer.com.au real‐time data 
  16. 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  
  17. Female graduates still paid  lesser than male counterparts.  $45,000 $43,000 $42,000 Male National Female Source: GraduateCarreers.com.au , 2007
  18. Factors driving/influencing  IT remuneration trends in  Australia.  
  19. 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 .
  20. 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 
  21. 3. Technology is pervasive in Australia  Image : Flickr, copyright zinkwazi
  22. 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. 
  23. 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
  24. 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
  25. 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.
  26. 6. Demand & supply  imbalance of IT  professionals  
  27. Demand ‐ National Job Vacancies  continues to be high   Source:  ANZ 
  28. Demand for IT Professionals  IT job Vacancies number High March 2008, Index 235.2 
  29. 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
  30. IT sector consistently has the most  vacancies  29,252 20,155 16,689 16,510 16,153 13,500 Source: Seek, 22 April
  31. Supply ‐ No of ICT Professionals  514,000 268,000 employed in  the IT industry Source: ACS ICT Industry Report, 2008
  32. 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
  33. of employers would hire more  IT graduates if appropriate  candidates were available Source: GraduateCarreers.com.au 
  34. 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
  35. 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 )
  36. 7.  IT Skills rapidly changing  2,500 documented programming languages.  Demand for new skills put pressure on rates. 
  37. 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
  38. Ruby on rails  2005 = 0 jobs 2008 = 48 jobs
  39. 8. Changing Labour &  Work Dynamics  • High labour participation  rate ‐ 65.2% • Ageing population in IT  • Changing employment arrangements  
  40. Changing work arrangement: Rapid growth of contracting work is pushing up salaries. 21455 7132 Contract Jobs Full‐Time Jobs Source: Seek, 22 April
  41. 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
  42. 9. What employers  Values dictates IT salary  levels.   
  43. Experience/Skills • Industry experience • Technology skills • Sector  experience  • Years in IT 
  44. 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
  45. Business/Soft  skills /Fit  • Communication skills • Business acumen • Team player  • Driven   • Leadership qualities  • Problem solver  • Cultural Fit 
  46. predictions! 
  47. Source: Dilbert, Scott Adams
  48. Increase in IT salaries this year
  49. 15‐20%  Asia‐Pacific 
  50. Recession or no recession,   companies are chasing IT talent,  regardless of the remuneration  costs involved. 
  51. But, is money an end‐ all solution to attract IT  talent?  
  52. Anybody  recognize this  man?  Charlie Ayers , Google Chef
  53. Google credits its success to free  Food  & Beer
  54. Companies are migrating to  “Total Rewards”
  55. “ 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 
  56. 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 
  57. 2. Benefits  Retirement Health & group benefits Vacation Flexi time Company services Facilities Salary sacrifice LAFA Source:  Mercer 2006 : Measuring the Returns on Total Rewards 
  58. 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 
  59. Work‐life balance   Recognition  Responsibility  4. Intrinsic factors  Team work Leadership Culture Company image Source:  Mercer 2006 : Measuring the Returns on Total Rewards 
  60. 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 
  61. 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 
  62. Perspectives  from IT  Professionals! 
  63. “ 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
  64. 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
  65. 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
  66. 63% of IT professionals will  change jobs because of  financial reasons    Source: Hudson - Candidate buying behaviour 2008
  67. Money is  important, but  ICT professionals  are screaming  for more.  
  68. 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
  69. regardless IT Staff ‘loyalty’ is out the door!
  70. Loyal IT staff are a minority  Loyalist,  Seekers,  13% 13% Approachables,  33% Explorers,  41% Source: Networkworld, salary Survey 2007
  71. 19.7% Attrition rate among IT professionals (AIIA)  or  20.6% (AHRI)  Source: AHRI , AIIA
  72. 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
  73. 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 
  74. “When land was the scarce  resource,  nations battled over it.  The same is happening now  for talented people.” Stan Davis & Christopher Meyer, futureWEALTH
  75. Section 2 Fundamental Shift in the recruitment  Landscape. How company reacts. 
  76. connecting employers and talent solution providers www: destinationtalent.com.au email: phillip.tusing@destinationtalent.com.au phone: 0402 416 767 or (02) 9212 0702 blog: destinationtalent.com.au/blog skype: phillip.tusing twitter: philliptusing ©

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