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ICT Remuneration & Recruitment Trends Analysis
- 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
- 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
- 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.
- 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
- 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 )
- 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
- 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
- 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
- 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
- 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
- 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
- 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 ©