AS/400 Salaries Still Top Dollar

The outlook for IS professionals in the AS/400 market continues to look promising, bolstered by compensation for Year 2000 projects and the underlying belief that on-the-job experience itself is perhaps the most valuable job skill of all.

Cost of living raises within individual companies are typically two or three percent this year, but IS is getting much higher amounts due to "workload pressures," according to Nate Viall, president of Nate Viall & Associates, a Des Moines, Iowa-based AS/400 research and recruiting firm. Viall recently released the results of his firm’s fall 1998 AS/400 salary survey. "Increases that IS is seeing are well above what other departments in a typical corporation are seeing."

The fall 1998 AS/400 salary survey indicates the average salary for AS/400 IS management has crossed the $70,000 mark for the first time, up 2.8 percent. The survey also reports salary increases of five-to-seven percent for those holding the titles of "director" or "VP," but only a one-to-four percent increase for "first level managers and supervisors."

Salaries for first-level managers from smaller or former S/36 sites remain "very low," with an average of $53,100, as compared with $60,000 for larger sites, according to the survey.

The typical operations manager claims an increase of 11 percent this year, up to $49,600. This is due, in part, to increasing complexity and added responsibilities for PC networks. LAN managers, the survey indicates, are up 6.9 percent to $51,400, the first time this salary has crested above $50,000.

Programmers are seeing their share of the wealth, as Viall reports salaries for all positions are up an average of 6.4 percent to $46,700. The study found the largest increases were for those with four-to-six years of experience, up to 7.9 percent, and those with seven-to-nine years of experience, up to 10.9 percent.

Programmers on either side of the four-to-nine-year sweet spot did not fair as well. Junior programmers without a degree reported a 1.6 percent increase, while those with more than 12 years of experience reported a 3.8 percent increase. Programmers from former S/36 sites "continue to lag behind their more traditional AS/400 and S/38 counterparts with an average salary of just $36,900," the survey reports.

AS/400 IS managers report an expected four percent to five percent increase for 1999, while their programmers report an expected five percent to eight percent increase for next year.

Viall explains the dynamics of the current market, saying, "Salaries rise rapidly in the early years, then they gradually bend into a plateau. That was true in the data up until early 1995. Then, because of the shortage of workers, junior-level salaries started to go up pretty rapidly. We’ve had over a 30 percent increase in salary for junior level IS professionals over the last three years. That has not happened to the people with 15 years of experience or more. The market doesn’t generally tolerate that, which leads to a high level of turnover."

Retention bonuses are fast becoming a way to encourage employees to stay with a company, particularly those working on Year 2000 projects. According to the survey, 28.3 percent of all programmers report bonuses, averaging $3,228. "Retention bonuses due to Y2K pressures are running as high as a full year’s salary at a few sites," according to the survey. More typical amounts are reported to be in the 20 percent to 30 percent range. Only about 10 percent to15 percent of companies surveyed implement such bonuses.

Retention bonuses are a "good idea to keep programmers from taking the skills they’ve learned at a particular company, on a particular project and selling themselves on the open market, particularly with consulting firms," Viall says. These bonuses are not expected to be "a major trend, once Y2K projects are completed, but they may inspire a rise in base salaries," he adds. "While retention bonuses are a sound move for companies seeking to keep their IT talent, they are an interim solution. Companies always have the option of creating a higher salary base."

A separate compensation survey conducted by Positive Support Review Inc. (Santa Monica, Calif.) reports generally consistent MIS salary and compensation growth across technology platforms. According to PSR’s Mid Year 1998 MIS Compensation Study, "salary ranges, including perks, increased by an 11.5 percent average at the senior management level from midyear 1997 to midyear 1998. The ranges for the middle management level increased by an average of 8.5 percent, while the staff level increased by an average of 8.1 percent."

Consistent with Viall’s findings, the PSR study cites "the lack of skilled and experienced IT professionals at all levels" as having created a demand now accompanied by "higher salaries and attractive bonuses."

PSR’s data reflects average MIS salaries for 69 MIS positions in 103 cities throughout North America, 75 of which are in the United States while the other 28 are in Canada.

Those interested in a free individual salary analysis from Nate Viall & Associates can send a blank e-mail with "Free Salary Analysis" in the subject line to E-mails should include all relevant job-related information necessary to make an analysis. The analysis looks at up to 18 variables in calculating an individual’s expected midpoint and salary range, according to Viall.