E-Commerce Drives Soaring Salaries and Bonuses

When it comes to increasing earnings and opportunities in the IT field, it’s not<I> who</I> you know but <I>what </I>you know.

• 08/18/1999

When it comes to increasing earnings and opportunities in the IT field, it’s not who you know but what you know. Companies with Windows NT that are engaged in e-commerce initiatives are paying top dollar bonuses to employees with e-commerce know-how. Similarly, while many companies have eased off on ERP implementations -- mainly due to a Year 2000 lockdown -- IT employees focused on ERP projects continue to rake in the bucks.

This year’s ENT salary survey confirms that the more directly an IT professional supports a company’s frontline business, the greater the rewards. The survey, conducted in late spring, includes results from 108 companies running Windows NT systems.

IT professionals "are in demand if they have business experience, especially since IT is now looked upon to help drive business," says David Pollard, director of recruiting at Keane Inc. (www.keane.com), and IT services firm. "Skills that help businesses to expand rapidly -- networking, e-commerce and Web development -- are very much in demand and very much in short supply," agrees Maria Schafer, research director with analyst firm Meta Group (www.metagroup.com).

The ENT survey finds the average premium placed on ERP systems developers or managers is more than 9 percent. MCSE certification is worth another 7.5 percent on the average, with e-commerce skills upping a salary an additional 7.4 percent. Employers are also willing to pay more than 6 percent above average for data warehousing development skills. Year 2000 work fetches premiums of close to 5 percent above the average as well.

At this point, however, Y2K is a wild card. Analysts are divided on its continued impact on salaries. Year 2000 issues continue to drain resources, Schafer finds, but with the bulk of Year 2000 work completed, there has been some relief in the overheated IT job market, Pollard says. With less Year 2000 work there has been more "softness in the marketplace, with a bit of a supply that we haven’t seen for more than three years," he observes.

As a result, the torrid growth of IT salary levels over the last few years has flattened, Pollard says. The ENT survey confirms a slowdown in the salary growth of analysts and programmers, except at sites with cutting-edge initiatives, such as e-commerce, ERP and data warehousing. Also, network administrator salary levels have grown in the double-digit range, reflecting a growing reliance on network infrastructure by all segments of business. Database administrator and management-level salaries also continue on an upward path.

The bonuses at companies employed in e-commerce initiatives are particularly alluring. A typical IT manager can command an annual base salary of up to $82,000 at the high end, a figure that jumps to $87,000 at companies with e-commerce projects.

Add the average bonus of 12 percent for an IT manager at an e-commerce company -- compared with 7 percent overall -- and annual compensation jumps to more than $97,000 a year. Likewise, systems analysts at e-commerce sites have a median salary of $58,500, or about 10 percent higher than the average. With a 9 percent average bonus -- compared with 6 percent in general -- total compensation climbs to almost $64,000 annually. Senior programmer/analysts at e-commerce sites enjoy a median salary of $56,000 -- a 12 percent premium over the average of all categories -- along with an 8 percent bonus.

"Everything around e-business is exploding -- Java and HTML on the front-end, Oracle on the back-end," Pollard says. The ENT survey finds that developers working in Java environments are seeing increased compensation. These professionals report average bonuses of about 10 percent, with salary ranges peaking at 75,000 at the high end.

Developers in Oracle environments also fared well in the survey, with annual base salaries as high as $67,000 -- well above the norm. Overall bonuses for programmers and programmer/analysts averaged between 5 percent and 7 percent.

The recent explosion in e-commerce is quickly consuming available IT talent that may be finished with Y2K projects, Pollard adds. "I don’t think there’s a major metropolitan area in America that is not going through extreme growth with IT," Pollard says. "Because IT is so pervasive. Every major Fortune 1,000 company is a major player with IT."

Fueling the demand is the fact that "there aren’t a lot of e-commerce packages available," Metagroup’s Schafer adds. "Developing these applications requires talent, and there’s just not enough out there. Companies still need to develop these systems themselves. That requires talent that’s now in short supply." Expertise in data warehousing and mining are also drawing top dollar, says Marty Aronow, executive vice president of U.S. operations at IMI Systems Inc. (www.imisys.com), an IT consulting firm. Larger salaries and bonuses are going to IT professionals who help companies develop "a customer-centric focus around the Internet," Aronow says. "Amassing customer information and being able to access that information is going to be critical for growing a business in the new millennium."

The ENT survey finds that business analysts working at companies with data warehousing sites draw a median salary of $56,900, or 7 percent more than the overall average. Bonuses to these professionals average 6 percent. Senior programmers at data warehousing sites drew a median base salary of $52,000 -- 4 percent above the average.

Another field that contributes to IT opportunities is ERP deployments. While there has been a slowdown in growth in the ERP market, "the ERP space is still hot" in terms of salaries, Pollard says. "There have been many ERP installations over the past few years, and there’s a still a great need for programmers and business process re-engineering specialists that can do the value-add, interfaces and applications work."

The ENT salary survey confirms that ERP sites continue to pay salaries well above the overall average. For example, IT managers at ERP sites have a median base salary of $78,000 -- 18 percent more than the median for all categories in this group. Likewise, business analysts at ERP sites draw a median income of $59,200, or 12 percent above the average.

Overall, the ENT survey finds annual salaries for managers of Windows NT sites -- including CIOs and vice presidents -- start in the mid-$50,000 range and climb well over $100,000.

Programmers and analysts salaries range between $35,000 and $65,000, with considerable increases for senior-level professionals who have at least five years experience. Bonuses for programmers and analysts range between 4 percent and 8 percent.

Previously, such bonuses were only accorded to management-level employees. The demand for IT talent, however, has made the bonus a key part of staff-level packages. Business systems analysts and programmer/analysts at e-commerce sites are adding bonuses between 8 percent and 9 percent.

Bonuses are now evident at many levels, and are being used as a way to "get around salary ceilings," Meta Group’s Schafer says. Most bonuses are tied to overall corporate performance, she notes. But there has been a noticeable increase in bonuses tied to team performance as well. "You’re going to get more people to do more for you if you’re focused on the team aspects," Schafer says. About a third of companies reward individual performance, a third reward on the basis of team performance and another third reward based on corporate performance, she notes.

Top senior managers in the survey -- vice presidents and CIOs -- now make up to $108,000 at the top of the range, reflecting an increase of about 8 percent over last year’s survey. The current median salary for the CIO of a Windows NT site, $82,700, a jump of 3.4 percent over last year’s survey. Bonuses average about 11 percent, which lifts total median compensation for this group close to $92,000.

The most generous bonuses, topping 17 percent, were awarded to CIOs or vice presidents in the service sector, which also includes distribution and retail. This market also saw the highest top salary level -- $122,500. Salaries ranged from $87,500 to $118,000 for CIOs and vice presidents in the computer and high technology arena. Bonuses here averaged 15.7 percent.

The highest median salary in this survey was recorded by the CIO of a large New York-based entertainment firm, reportedly $325,000. This CIO also received a 25 percent bonus last year.

This CIO managed an IS staff of more than 100 people and simultaneous implementations of e-commerce, ERP and data warehousing.

The typical salary range for managers and directors tops out at about $82,000. Median salaries at this level, about $66,000, appreciated about 5.6 percent over the past year. Bonuses average 7 percent, compared with last year’s 6.5 percent. The value of overseeing e-commerce activities is evident, with bonuses for managers at e-commerce sites hitting 12 percent.

By industry category, Windows NT managers in the computer/high-tech sector fare best, with salaries in the range of $64,000 to $89,500.

Top dollar paid in this survey was $165,000 to the IT manager of a Windows NT shop at an upstate New York manufacturer with an ERP system.

For business analysts in the survey, the average salary of all categories tops out at $63,000, unchanged from last year’s survey. Bonuses average about 6 percent, which helps the total median compensation reach $56,000 from $53,000.

As with other management-level employees, bonuses for business analysts at e-commerce sites topped all other initiatives, averaging 9 percent. The median salary for business analysts at ERP sites exceeds $59,000, almost 12 percent higher than the average of all categories.

The highest submitted salary for business analysts -- paid at five participating companies -- was $100,000. These rates were prevalent at companies with extensive multiplatform environments, including Windows NT, Unix, midrange systems and mainframes.

Companies held the line with salaries of entry-level programmer/analysts in the range of $30,000 to $45,000, reflecting little change since last year. For programmer/analysts with at least five years experience, the range jumps to $44,000 to $60,000. Bonuses average about 5 percent for this subdivision, bringing total median compensation for experienced programmer/analysts to $52,500. Experienced programmer/analysts developing e-commerce systems earned average bonuses of 8 percent. Those involved in data warehousing sites report salary levels about 14 percent above the norm.

Topping the list of salaries submitted for programmer/analysts was a base compensation of $125,000 per year, paid by a New York-based entertainment company. Languages employed include C++ and Java in an Oracle database environment. The company reports a range of initiatives among its staff of more than 100 IT employees, including e-commerce, ERP, intranets and groupware.

The typical entry-level programmer makes between $31,000 and $45,000 -- unchanged from last year. The range jumps to $36,000 to $56,000 with five years experience. These salaries also held steady from last year.

Programmers in e-commerce environments achieved bonuses of 8 percent of their annual salary, slightly higher than the average 7 percent bonus for all categories.

Network administrators have fared well over the past year. Salaries climbed almost 12 percent to a median of $48,000 and reaching $57,500 at the high end. Average bonuses equal 6.5 percent of annual salary, up from 5.4 percent in last year’s survey.

Network administrators at e-commerce sites reported average bonuses of more than 11 percent. Those managing ERP sites had bonuses of almost 9 percent.

The highest-paid network administrator in the survey earned $140,000 last year, running Windows NT, Unix, Novell NetWare and an intranet for a Colo.-based high-tech firm.

Database administrators saw appreciable salary gains over the past year. Median salaries climbing to $52,100, representing a gain of more than 4 percent from 1998. Bonuses averaged about 6 percent per year. Two popular e-commerce relational databases -- DB2 and Oracle -- are the most lucrative to manage. Database professionals involved with DB2 had median salaries of $60,000, compared with $58,800 for Oracle. SQL Server sites pay about $52,000 a year.

Those involved with e-commerce and ERP sites reaped greater rewards in terms of salaries and bonuses, which climbed as high as 9 percent of annual salary at ERP sites.

Webmaster/Internet specialist salaries held steady over the past year in the $37,500 to $50,000 range for all categories, with bonuses averaging 6 percent.

Those involved in e-commerce and ERP efforts had a salary range that topped off at $67,500, with an average bonus of 10 percent.

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The ENT salary survey included randomly selected Windows NT sites from readers of ENT and other BCI enterprise computing publications. Respondents were asked to report their salary levels as well as those of their employees. A total of 108 companies were included in the survey, reflecting pay ranges for

Windows NT and other IT positions nationwide. The survey covered several levels of IT professionals, from CIOs to database specialists. Based on the rates provided, salaries are reported as ranges: The low number represents base salaries falling on the 25 percentile mark, while the high number are base salaries falling on the 75 percentile mark. The survey also covered annual bonuses for each position.

A little more than half of the respondents, 57 percent, were from smaller IT departments -- with 10 employees or fewer. Seven percent came from shops with more than 100 employees. About 62 percent were small businesses -- 500 employees or fewer. Almost a quarter of the group, 22 percent, came from the manufacturing sector and 24 percent came from service-related companies. Ten percent were affiliated with distribution, wholesale or retail firms. About 18 percent were with public sector or nonprofit organizations. Ten percent were from utilities, and another 16 percent were with computer, software and application development companies.