In-Depth

Salary Blues? Don’t Blame Outsourcing

For certain in-demand IT skill sets, premium pay has actually increased

• By Stephen Swoyer
• 07/26/2005

IT pros tend to be anti-outsourcing largely because of a perception that U.S. technology jobs are being sent en masse to offshore locales such as Hyderabad, Bangalore, and Shanghai, among others.

There’s a sense of prevailing frustration, too. Some IT pros have firsthand experience with offshore experiments gone terribly awry and can’t understand why executives remain largely insulated from (or indifferent to) the demonstrable shortcomings of the outsourcing model.

There’s another reason North American IT pros tend to be anti-outsourcing: They’re afraid employers will use the threat of a potential outsourcing move to arrest or depress premium pay (that is, base salary and bonuses) in many technology skill areas.

If IT research consultancy Foote Partners is correct, however, this is far from the case. In fact, for certain in-demand IT skill sets—many of them in lucrative technology disciplines—premium pay has actually increased.

“It’s true that 18 months ago pay for networking, database, and applications skills were in seven percent to 10 percent annual declines, according to our surveys of 50,000 IT professionals,” said co-founder and president David Foote, in a prepared release. “But the pendulum has since swung to the other side as companies have become more aware of the difficulties in doing offshoring successfully and achieving anticipated cost savings. They’re once again investing in their own people to build and maintain systems critical to their business strategies. And they’re using competitive pay to attract and hire workers with the right combinations of technical and business skills to do this."

In particular, says Foote, pay for IT pros with application development, database, enterprise software, networking, and systems administration skills has increased in 2005, growing by 3.8 percent for non-certified IT workers and 1.3 percent for certified pros in the first six months of the year.

Leading the charge were upticks in pay for uncertified IT pros with operating systems (8.2 percent), networking/internetworking (5.1 percent), database (4.3 percent), and application development expertise (2.1 percent). For certified IT pros, Web (3.8 percent), application development or facility with programming languages (2.3 percent), and database expertise (0.7 percent) were strongest.

The 12-month outlook is even more encouraging, according to the research firm: Pay for uncertified skills rose by 4.9 percent for the 12 months ending July 1, 2005, while pay for certified skills increased by 3 percent.

What accounts for this revival? In part, Foote says, the caution of some once-bitten offshore adopters.

“[T]he turnaround is really being driven by many factors. For one thing, employers are once again investing in onshore applications development and systems as they’ve become more selective—and risk aversive—in their assessments of what work can go offshore and what needs to be under local control. Consequently, they’re demanding more industry-specific experience to go with tech skills mastery,” says Foote.

“They’re also searching for workers with solution-specific experience within a particular industry now that money is once again flowing to innovation and new products and services that will ensure their competitiveness against challengers of all sizes and geographies.”

If you’re looking to get into the certification game, says Foote, you’ll probably want to pursue certifications in application development or programming languages, networking, and systems administration and engineering, with a particular emphasis on operating system certifications.

Not surprisingly, most of the certifications with the highest increase in value over the last 12 months correspond to these disciplines. Certifications in which pay premiums have increased in value by 15 percent or more include HP/Compaq Master Accredited Systems Engineer (MASE); HP/Compaq Accredited Systems Engineer (ACE); Certified Information Systems Auditor (CISA); Cisco Certified Security Professional (CCSP); and Sun Certified Systems Administrator for Solaris. Premium pay for two IBM/Lotus-oriented certifications (for Lotus application development and systems administration) also grew by 15 percent.

Ironically, while pay for IT pros with CISA and CCSP certifications grew at an impressive clip over the last year, pay for many other security certifications declined. Foote says this isn’t a reflection of diminished demand, but, instead, of a flood of certified security professionals, which in turn has depressed pay for workers with beginner and intermediate security certifications.