Despite reports of an industry riddled with job loss and pay cuts, salary increases for iSeries professionals isn't so bad -- in fact, it's better than the national average.
Granted, the increases aren't huge and appear to be little more than standard cost of living increases. Still, experts say these minor gains may signal better times ahead.
According to a recent report, salaries for iSeries managers are up 4.1% from mid-2002. Programmer salaries were up 3.8%.
"Salaries are still increasing in spite of what the popular and tech press has been focusing on -- which is lack of demand and huge cuts in salaries," said Nate Viall, president of Nate Viall and Associates, the Des Moines, Iowa-based iSeries (AS/400) research and recruiting firm that compiled the report.
This isn't meant to underestimate the huge impact a poor economy, the use of H1-B and L-1 visas and offshore outsourcing have had on iSeries pros, but it is an indication that, as a whole, the iSeries community has not been as deeply impacted as some other market segments, said Viall.
The majority of respondents to Viall's survey are from mid-size companies with fewer than 20 IT employees.
The good news is that companies seem to be coming out of hiring freezes that were so prominent two years ago, and many are giving cost of living increases. As a group, iSeries professionals consistently do slightly better than the average -- which is about 2.3%, said Viall.
"With the downturn of the economy and softness in the sector, there hasn't been a lot of staffing -- new or replacement," he said. "In fact, 85% of all the iSeries employees have been at their companies for two years or more. Still, they all got 2% to 4% increases. What's significant about that is that they weren't taking a 20% cut -- which we've heard so much about."
Viall said those big high-profile cuts tend to be the result of companies adjusting for the inflated salaries during Y2K.
According to Viall, salary increases will be token amounts as long as there's an abundance of professionals -- both senior and entry-level.
"We're not expecting any surge in salaries," he said. "You're only going to see increases in the range of the cost of living. We have to get back in balance."
Time to hire
As the economy slowly recovers, this is a great time to hire entry-level people, or find those MIS majors that are working in your warehouse, and give them the promotion in IT.
"These people know how tough it is to find work, so when they land a job, they're more likely to be loyal," Viall said. "That tough job hunting process stays with them. They don't want to be skipping around from job to job. You'll have them for a lot longer."
Salaries for "junior" iSeries pros with less than three years experience continue to decline, down 4.0% to 4.5%. Upshot: The days of big time entry-level salaries are a thing of the past. Those extremes -- like $80,000 -- are rare, if not gone. The highest now is $52,000;the group average is down to $44,000.
"We're even seeing that slide into the $30,000 range as well," said Viall.
While salaries for those returning to the workforce and entry-level hires are lower, those who are true recruits are typically receiving small to moderate premiums as an inducement to change, according to Viall's report. In addition, salaries in lower tier jobs remain flat or are slightly declining, while salaries for top management continue to increase. More IT departments will find themselves drawn back under a formal (and more rigid) corporate compensation plan.
Although IT department heads and human resource staff are projecting lower increases of 1.5% to 3.5% for 2004, they're allowing for more individual merit increases or bonuses, Viall said.
This year, increases for managers (average salary of $87,000) fell between 1.0% and 5.0%. The smallest increases were for technical support managers, up just 2.6%, and IT directors, up just 1.3%. By location, rural managers reported an increase of 6.3%, but are still more than $26,000 below large urban managers.
Salaries for all programmers (average of $59,700) are up 3.8% from mid-2002. By either title or experience, most increases were between 2.0% and 4.0%. Developers with more experience and higher functional responsibilities received the largest increases.
The iSeries world has traditionally been very good to women, and that continues to be the case, according to the report. Female iSeries managers continue to make gains, up 8.7%. Female developers reported increases of 5.0%.
While all this news is fairly positive for iSeries pros, Viall said the industry is not seeing any big upturn in hiring -- not yet.
"It's starting," he said. "But a lot of it appears to be below the radar, What I'm seeing is one opening for XYZ retail, and six recruiters have that position -- all describing the same position," he said.
It appears that companies are not advertising for fear of getting inundated with "volumes of mediocrity." Upshot: Job openings are so few that people apply for the job whether they're qualified or not -- and in too many cases, said Viall, they're not.
Viall said that he also believes the days of massive layoffs are pretty much over -- for now.
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