In-Depth

ESJ Salary Survey 2010 Part 1: Management Salaries

Economy continues to weigh on management salaries; supply chain, SOA management skills command high premiums

• 08/10/2010

ESJ 2010 Salary Survey PDF

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There are abundant signs that the economy is pulling out of the recent recession triggered by the financial crises of 2007-2009, but as of the first half of this year, IT managers' salaries have been in the doldrums. IT budgets were tightened, and most companies held the line with the base compensation provided to their IT managers. Even when things improve, there may be a lag until this is reflected in renewed salary growth. Five out of nine key management positions covered in the latest Enterprise Systems salary survey saw decreases in their salary levels over the last year. “We are not receiving salary increases for this year and probably next fiscal year due to the economy,” remarked one survey respondent, a tone echoed by a number of other IT managers.

The survey found, however, that salaries were significantly higher for many IT management professionals engaged in application areas such as supply chain management and service-oriented architecture (SOA). In fact, across eight of the nine positions covered, managers engaged in supply chain management system development commanded the highest salaries of all. This was also the case for SOA work among seven out of the nine categories measured. While ERP-related skills did not top the list as in years past, this is still an area offering higher premiums, as well as the ability to effectively deliver on applications. “SAP Skills continue to draw the highest premiums followed by IT project managers,” said a respondent.

The bonus picture for managers was decidedly mixed over the past year, with bonuses for four positions rising, four declining, and with no change since last year. What is clear is that most management bonuses are nowhere near the relatively high levels seen in the middle of the decade. Many IT managers in the 2004-2007 timeframe saw annual bonuses of $10,000 or more. One respondent observed that at his company, salaries may be increasing “to counter inflation,” but executive incentive compensation “has been cut from 25 percent to 15 percent!”

The bright spots in this relatively muted picture were increases in the salaries of high-level IT directors (up eight percent on average), networking managers (up 24 percent), help desk and support managers (up 17 percent), and Internet managers (up 12 percent).

These findings are based on an Enterprise Systems survey of 893 companies, conducted in May 2010. The survey covered nine key management positions, along with nine key IT staff positions (to be covered in the next installment of this report).

As in previous years, the survey found that IT managers and executives at mainframe and Unix sites tend to have the highest salary rates; those in more distributed environments (such as Windows or Linux servers with no mainframe) tend to see much lower rates.

Interestingly, there was somewhat less overall experience reported among the survey group, contrasted with previous years' results -- which may have played a partial role in pushing salary rates down. For example, the average tenure for application development managers in the current survey is 11 years on the job, compared to 16 years in last year’s survey. Likewise, the typical data center manager has held his or her position for 11 years, down from 15 in last year's survey.

This lowering of experience levels may be a reflection of increased turnover among IT management ranks, partly due to retiring members of the top edge of the baby-boom generation, as well as turbulence within corporate IT ranks. In fact, the survey found a drop in levels of salary and overall job satisfaction among these IT employees -- 29 percent report they are unhappy with their compensation, versus 25 percent a year ago, and 21 percent are unhappy with their jobs, versus 18 percent last year.

This first of two reports to the Enterprise Systems salary report looks at the results for executive and management-level salaries in 2010. In the next installment, we will look at IT staff-level positions.

CIO AND VICE PRESIDENT OF IT

Salaries for the top executives in IT took a tumble over the last year, decreasing from an average of $150,300 in base salary to closer to $143,000. (Base salaries reported in this article do not include bonuses, which are addressed separately, or stock options or benefits.) The total average decrease in CIO pay for the 2009-2010 period was about five percent. A year ago, CIOs saw an increase of about three percent, and one percent the year before that.

CIO salaries have declined, but bonuses held steady. CIOs are projected to earn bonuses of about $18,000 on top of their base salaries for this year -- exactly the same as a year ago. This is down almost 47 percent from five years ago, in the midst of the economic boom. Since the Enterprise Systems survey was first commissioned nine years ago, CIO bonuses have ranged between $20,000 and $30,000.

CIOs and VPs drew the highest base salaries and bonuses of the 18 positions covered in the survey.

The typical CIO or top IT executive in our survey has 16 years of experience in the job. On average, CIOs with more experience -- at least a decade on the job -- earn about 13 percent more than their less-experienced counterparts.

CIOs overseeing enterprise resource planning (ERP) installations fare best this year, earning more than $200,000 on average. Those CIOs engaged in CRM-related efforts saw base salaries of more than $190,000 a year. By operating system and platform, CIOs in midrange shops (including IBM System i servers) tend to pay best, as with previous surveys, slightly outpacing their mainframe-centric counterparts.

CIO/VP SALARIES

INFORMATION SYSTEMS DIRECTOR

Although companies were skimpy with CIO salaries, they acknowledged the importance of well-run IT shops by making sure the IS or IT directors received healthy increases. IS directors -- who plan, direct, and control all day-to-day IT functions and oversee entire departments -- saw average salaries jump over the past year, from $108,000 to $117,000. IS directors have not seen appreciable salary growth since this survey was first launched nine years ago -- overall average base salaries are only up by about 18 percent for this entire period.

This past year was also a good one for IT directors in terms of bonuses as well -- though not quite reaching the levels seen in the mid-2000s. The typical average bonus reported among this survey group is about $11,900, up from $9,500 last year at this time.

IT directors salaries rank second among the nine management positions covered in our survey, and also second in terms of bonus amounts.

On average, the IS directors covered in our survey have about 14 years' experience. IS directors with 10 or more years experience make close to 20 percent more than those in the first 10 years of their jobs. An IS director with less than 10 years experience can expect to make about $100,000 a year, a figure that climbs to more than $120,000 for those with at least a decades' worth of experience.

IT directors in charge of operations involving supply chain management systems development and maintenance command the highest base salaries, averaging more than $156,000, or a third above the average. Those in companies building with SOA approaches follow with close to $150,000 a year in base pay.

Mainframe IT directors earn the most among their counterparts, with base salaries of more than $150,000 a year, far outpacing those in other operating system environments.

IS DIRECTOR SALARIES

INFORMATION SYSTEMS MANAGER

The average base salaries of IS managers who are involved with the day-to-day operations of their enterprises slipped modestly over the past year. The average an information systems manager -- who plans and approves equipment and software purchases, as well as oversees day-to-day activities -- is down by about four percent, from $100,000 to $96,500. However, IS management salaries are still above levels seen throughout the decade this survey has been conducted.

IS managers also saw a decline in their bonus levels. Overall, however, bonuses are well within the range seen over the past nine years, which have hovered between $6,000 and $9,000.

IS managers' salaries rank fourth among the nine management positions covered in our survey, and third in terms of bonus amounts.

The average IS manager reported in this survey has about 12 years of on-the-job experience. Those in their first decade average about $84,000, a figure that jumps to more than $100,000 after about 10 years.

As with their IS director bosses, IS managers involved in sites implementing supply chain management systems are likely to average the highest levels of pay, about $120,000 -- or about 24 percent more than the average. Those managers overseeing SOA-based efforts follow at $116,000.

By operating system environment, IS managers in mainframe shops lead, earning a base of $115,000 a year, followed by those with midrange-class systems at about $108,000.

IS MANAGER SALARIES

APPLICATION DEVELOPMENT MANAGERS

Although application development managers saw their salaries jump in last year's survey, the recent economic slowdown may have finally caught up to this category as well over the past year. Overall, base salaries on average declined by about four percent over the past year, to about $96,000. Since the first Enterprise Systems salary survey was conducted in 2001, however, AD managers have experienced a steady climb from the original average of $80,000 a year.

AD managers also saw slightly less money in their bonus checks, down five percent from last year, continuing a downward trend in bonuses over the past six years.

AD managers' salaries rank fifth among the nine management positions covered in our survey, and also fifth in terms of bonus amounts.

The average AD manager has about 11 years of experience on the job. These managers can expect to see salary growth of at least 25 percent in the first two decades of their careers, the survey finds. Currently, AD managers in the first decade of their careers make about $82,000, a level that rises to more than $100,000 for those with at least 20 years of experience.

As with their IT executive and management counterparts, those application development managers engaged in operations involving supply chain management draw the highest average base salaries, close to $121,000 a year -- more than 25 percent above the average for this position. Business-to-consumer e-commerce operations also pay their AD managers well, and SOA is an area that draws high salaries here as well.

By operating system environment, those AD managers involved with either mainframe or midrange-class computing shops top the list, drawing at least $116,000 annually, far outpacing those managers in distributed environments (Windows or Linux).

APPLICATION DEVELOPMENT MANAGER SALARIES

DATA CENTER/OPERATIONS MANAGER

As with their application development counterparts, data center managers saw a downturn in their overall average salaries over the past year, as the impact of the economy rippled to IT shops. Data center and operations managers -- who oversee day-to-day operations of data center environments -- saw a five-percent decline in average base salaries, our survey finds. Data center managers now make about $92,000 not counting bonuses and benefits -- compared to last year’s average of $97,000. Overall, data center managers' salaries have grown steadily in the eight years this position has been measured in the surveys.

As if sagging salary growth weren't enough, DC managers also felt pain in the amounts of their annual bonuses. Annual average bonuses for data center managers now average close to $5,000 for the year, down by more than one-fifth from last year.

DC managers' salaries rank sixth among the nine management positions covered in our survey, and also sixth in terms of bonus amounts.

On average, data center managers in our survey have about 11 years' experience. The more experienced managers (with more than a decade on the job) are drawing salaries if at least $100,000, or a third more than their entry-level counterparts.

Supply chain management is also a high-paying area for data center managers. Those managers in companies with robust SCM efforts had base pay averaging $112,000, or 22 percent above the average for this position. ERP and CRM sites also tend to pay their data center managers above the average rate.

Those DC managers overseeing mainframe sites also commanded higher average salaries, bringing in more than $112,000 over the past year.

DATA CENTER/OPERATIONS MANAGER SALARIES

NETWORKING MANAGER

Interestingly, although the average salaries of networking managers foundered in the early stages of the economic downturn, their fortunes took a turn for the better over the past year. In fact, this group of managers saw a significant increase in their average base salary, bouncing back from last year with gains of almost 24 percent and getting back to salary growth that has been taking place since the first years the survey was conducted. Currently, network managers -- who oversee the operation and planning of computer networks -- are earning base salaries of close to $89,000. These professionals saw the biggest annual raises among the nine management positions covered in the survey.

Average bonuses for networking managers also have increased significantly over the past year. This year, the average annual bonuses reported by this group of survey respondents was about $4,220 -- well over the $2,600 they received a year ago.

Networking managers' salaries rank seventh among the nine management positions covered in our survey, and eighth in terms of bonus amounts.

Networking managers, who average about 10 years’ experience on the job, can expect to see salary growth of at least 25 percent throughout their careers, the survey also finds. Currently, networking managers in their first decade on the job (with less than 10 years' experience) make about $77,000, a level that rises to more than $96,000 with experience.

Supply-chain-centric operations are top employers once again, paying close to a 22 percent premium to their networking managers. Those networking managers involved in SOA-focused operations also saw better compensation as well. Networking managers in mainframe environments also were paid better than those with other platforms.

NETWORKING MANAGER SALARIES

HELP DESK/SUPPORT MANAGER

Help desk and support managers saw their salaries whither when the economic downturn first hit in the 2008-2009 timeframe. Things have brightened up lately for these highly visible professionals responsible for diagnosing, troubleshooting, and correcting end-user access problems. These managers had increases in average salaries of more than 17 percent, now averaging close to $78,000.

Along with salary raises, bonuses have bounced back for help desk managers as well. This year, help desk managers’ bonuses are averaging about $4,300 in bonuses, well over the $1,200 reported last year, and more in line with the range seen since the survey began -- $3,000 to $5,000.

Help desk managers' salaries rank last among the nine management positions covered in our survey, but seventh in terms of bonus amounts.

The typical help desk manager in our survey has at least eight years of industry experience. He or she will earn about $75,000 in the first decade on the job, and then rise to $82,000 as experience grows.

Help desk and support managers are most highly valued when they are helping to engage and assist outside customers. To this end, those managers helping to oversee business-to-consumer operations tend to have premiums exceeding 50 percent of the average salary for this job. There are also hefty premiums being paid to those support managers involved in supply chain management systems, which likely also interface with customers, as well as outside business partners.

Help desk and support managers in mainframe environments also tend to earn more -- almost twice as much -- as those in distributed computing environments, our survey finds.

HELP DESK/SUPPORT SALARIES

ENTERPRISE ARCHITECT

In the recent economic slump, companies stopped thinking long-term and focused on addressing short-term issues. This may have impacted the incomes of enterprise architects, who still did well in last year's survey, but saw a moderation of their salary levels in the most recent year. Enterprise architects -- who bridge the gap between IT and business processes -- saw average annual base salaries of close to $100,000, down by about 16 percent from last year.

For purposes of this survey, EAs are categorized as management since their responsibilities include supporting business process enablement, preparing for the architectural implications of outsourcing, adopting a system for measuring and managing performance, and measuring the business impact of the architecture. The position may also be known by titles such as senior architect; chief architect; and director, enterprise architecture and/or enterprise strategies and/or enterprise solutions.

Enterprise architects’ bonuses also slumped over the past year -- dropping from close to $11,000 to $6,400. This position has only been part of the survey for the past four years, but this is the lowest recorded annual bonus. The bonus levels for six out of the nine positions either declined or remained stagnant; the drop for EAs is the most severe. This may reflect a retrenchment or deferment of long-term projects -- which EAs are most involved with -- during the recent downturn.

Enterprise architects' salaries rank third among the nine management positions covered in our survey, and fourth in terms of bonus amounts.

On average, enterprise architects have been on the job about 12 years, and those that stick around see significant salary bumps -- rising more than 40 percent after a decade.

Enterprise architects are the primary point person for corporate SOA efforts, serving as the go-between for the business and IT departments. Thus, those EAs working within companies with SOA initiatives underway are earning the most -- 25 percent more than the average. In line with most of the other management positions in this survey, EAs engaged with SOA and supply chain management operations also top the list in terms of salary premiums.

EAs at mainframe sites earn the most, followed by professionals working within Unix-oriented sites.

ENTERPRISE ARCHITECT

INTERNET MANAGER

Internet managers -- who oversee their companies' Web presence and e-business channels -- saw their value increase significantly over the past two years. Salary ranges over the years have been erratic for this position, reflecting not only the fuzziness of the duties of this job and the shifting tides around e-business and Web development. Salaries have kept to a range of between $70,000 and $90,000. This year is no exception, with salaries coming in at an average of $87,500, up about 12 percent from 2008 data. (There was insufficient data in the 2009 survey.)

Internet managers have gained ground in base salaries, but bonuses have been weak over the past year. This year, average bonuses awarded to Internet managers totaled $3,800 -- well below the $6,000 they received in 2008. Overall, with the exception of 2008, Internet managers’ bonuses had been steadily declining from year to year.

Internet managers’ salaries now rank eighth among the nine management positions covered in our survey, and last in terms of bonus amounts.

Internet managers in the survey have, on average, 10 years of industry experience. Those with greater than 10 years tend to see a fairly significant salary bump, topping out at $95,400 for more experienced managers.

The survey also finds that Internet managers working within companies with supply chain management installations have base salaries averaging more than $110,000, leading all other categories. Those focused on ERP systems follow at $109,000. By platform, Internet managers in mainframe computing environments had the highest ranges, averaging above $104,000, followed by those in Unix settings with at about $101,000.

INTERNET MANAGER SALARIES

SALARIES OF PROFESSIONAL STAFF

In our next report we'll examine salaries of IT professional staff -- from application programmers to storage administrators.