IT Remuneration Trends 2008 Short Version

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A presentation on IT remuneration trends in Australia.

A presentation on IT remuneration trends in Australia.

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  • 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 ©