salary survey: Up, Up and Away

• 06/28/1999

The more an IT professional gets involved with his or her company's business, the more he or she earns in salary and bonuses. The latest MIDRANGE Systems salary survey confirms this rule, particularly in the red-hot area of e-commerce. AS/400 sites engaged in e-commerce initiatives are paying top dollar and large bonuses to IT employees with e-commerce know-how. Similarly, IT employees focused on ERP projects also continue to earn more than average.

A typical AS/400 manager can command an annual base salary of up to $80,000 at the high end, a figure which jumps to $87,000 at e-commerce companies. Likewise, typical bonuses for managers of e-commerce operations are topping 12 percent of their annual salary, compared with average bonuses of 9 percent. Business systems analysts and programmer/analysts at e-commerce sites are adding bonuses of almost 12 percent to their bottom lines.

The high bonuses are now being seen at all levels, and are being used as tools to "get around salary ceilings," says Maria Schafer, research director with Meta Group (Stamford, Conn.). "Bonuses are becoming more common at non-management levels." Most bonuses are tied to overall corporate performance, she notes. However, there's been a noticeable increase in bonuses tied to team performance as well.

The AS/400 market has been riding right along with the boom in opportunities. Despite any potential Year 2000 slowdown this year, industry observers say things are only getting better. "E-commerce is driving this boom," says Dan Simmons, who has observed a number of companies migrating to the AS/400 for its e-commerce capabilities.

"Skills that enable businesses to expand -- networking, e-commerce and Web development -- are very much in demand and very much in short supply," agrees Schafer, "There aren't a lot of e-commerce packages available. Companies still need to develop these systems themselves. That requires talent that's now in short supply."

The larger salaries and bonuses are going to those IT professionals that help companies "that are developing a customer-centric focus around the Internet," says Marty Aronow, executive VP of U.S. operations with IMI (Melville, N.Y.). This encompasses initiatives such as data warehousing and data mining. "Amassing customer information and being able to access that information is going to be critical for growing a business in the new millennium."

The MIDRANGE Systems survey finds AS/400 salary ranges have increased for most positions by 5 percent to 15 percent over the past year, especially for more experienced professionals.

The Year 2000 continues to be a wild card, however. While premiums on Y2K-related skills are lower than for other initiatives, analysts are divided on its continued impact on the salary market. Meta Group's survey finds that Year 2000 continues to be a drain on resources, although most Y2K projects are now well established. In fact, over the past two to three years, Year 2000 has exacerbated the shortage of IT professionals, agrees David Pollard, director of recruiting with Keane Inc. (Boston). 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," says Pollard. However, he adds the recent explosion in e-commerce is quickly consuming any glut of available IT talent. "I don't think there's a major metropolitan area in America that is not going through extreme growth with IT," says Pollard. "Because IT is so pervasive. Every major Fortune 1000 company is a major player with IT."

Along with e-commerce, another initiative that continues to contribute to IT opportunities is ERP deployments. While there has been a noticeable slowdown in growth in the ERP market, "the ERP space is still hot" in terms of salaries, says Pollard. "There have been many ERP installations over the past few years, and there's still a great need for programmers and business process re-engineering specialists that can do the value-add, interfaces, and applications work." The MIDRANGE Systems salary survey confirms that ERP sites continue to pay bonuses up to a third higher than average.

Another area impacting the growth of AS/400 opportunities is the rising adoption of Lotus Domino/Notes, Simmons observes. "Since Domino helps the AS/400 work on the Web so well, it's going to drive the market up for AS/400 professionals." Indeed, many sites running Lotus applications are reporting heftier-than-average bonuses for employees.

Overall, the MIDRANGE Systems survey finds annual salaries and bonuses for managers of midrange sites (including CIOs and VPs) start in the mid-$50,000 range and climb to over $100,000--the first year this threshold has been reached in this survey. Programmers and analysts salaries range between $30,000 and $65,000, with considerable increases for senior-level professionals with more than five years experience.

CIO COMPENSATION TRENDLINE

(Average Annual Base Salary)

$78,000 83,000 83,000 94,000

1996 1997 1998 1999

CIO SALARY RANGES

Low (25%) High (75%) Bonus

E-commerce environments $87,700 $122,500 14%

ERP environments $91,700 $100,000 10%

Data warehouse/mart $82,500 $94,200 7%

All categories $74,400 $101,200 11%

Top senior managers in the survey--VPs and CIOs--now make up to $101,200, reflecting increases ranging between 3 percent and 6.5 percent over last year. This is a rise over last year's CIO increases, which amounted to less than 2 percent.

Those CIOs or VPs in the distribution/retail sector commanded the highest salaries, which ranged between $85,000-$108,500. Bonuses in this sector were also especially high for CIOs, averaging about 17.5 percent.

The highest reported median salary in this survey was reported for the CIO of a Mid-Atlantic-based manufacturer at $200,000, plus a 5 percent bonus, at a site running an ERP configuration.

MANAGER/DIRECTOR COMPENSATION TRENDLINE

(Average Annual Base Salary)

$55,000 62,000 66,000 69,000

1996 1997 1998 1999

MANAGER/DIRECTOR SALARY RANGES

Low (25%) High (75%) Bonus

E-commerce environments $60,000 $87,000 17%

ERP environments $63,000 $81,400 12%

Data warehouse/mart $65,000 $83,000 5%

All categories $54,800 $80,200 9%

The typical salary range for managers and directors tops out at $80,000. Salaries at this level have not appreciated as considerably over the past year as their senior management counterparts, increasing barely 2.5 percent at the top end. However, bonuses are averaging 9.4 percent, versus last year's 8.1 percent. Bonuses for managers at e-commerce sites hit a staggering 17.3 percent. Typical salaries are in the range of $54,800 and $80,200.

By industry category, AS/400 managers in the service sector (including financial services and healthcare) performed best, with salaries in the range of $56,000-$86,000.

BUSINESS ANALYST COMPENSATION TRENDLINE

(Average Annual Base Salary)

$47,000 49,000 51,000 58,000

1996 1997 1998 1999

BUSINESS ANALYST SALARY RANGES

Low (25%) High (75%) Bonus

E-commerce environments $50,000 $72,000 12%

Groupware/collaborative $50,000 $67,900 10%

ERP environments $49,000 $64,500 8%

Data warehouse/mart $50,000 $64,000 4%

All categories $48,800 $65,200 7%

Business analysts fared well in this survey, with salaries in the range of $48,000 to $65,000--reflecting increases averaging 6.2 percent to 14 percent over last year's reported rates. Bonuses averaged about 7.5 percent, well over last year's average bonus of 4.6 percent. As with management-level employees, bonuses for business analysts at e-commerce sites topped all other initiatives, at an average of 11.6 percent. The salary range at e-commerce sites was also higher, ranging as high as $72,000 in annual base salary.

SR. PROGRAMMER/ANALYST COMPENSATION TRENDLINE

(Average Annual Base Salary)

$43,000 47,000 46,000 53,000

1996 1997 1998 1999

SR. PROGRAMMER/ANALYST SALARY RANGES

Low (25%) High (75%) Bonus

E-commerce environments $47,700 $60,000 12%

Groupware/collaborative $42,000 $57,000 8%

ERP environments $50,000 $67,500 11%

Data warehouse/mart $47,400 $61,200 3%

All categories $43,400 $60,000 7%

For programmer/analysts, the news is also good, with increases averaging between 10 percent and 15 percent over last year's survey. Experienced P/As (with five or more years experience) developing e-commerce and ERP systems saw significant bonuses of 11.6 percent and 11.2 percent respectively. However, companies held the line with salaries of entry-level P/As in the range of $30,000 to $48,000, reflecting little change since last year. For experienced P/As, the salary range expands to $43,400 to $60,000.

SR. PROGRAMMER COMPENSATION TRENDLINE

$39,000 40,000 40,000 47,000

1996 1997 1998 1999

SR. PROGRAMMER SALARY RANGES

Low (25%) High (75%) Bonus

E-commerce environments $37,200 $60,000 11%

Groupware/collaborative $33,000 $48,000 9%

ERP environments $37,000 $57,200 8%

Data warehouse/mart $41,000 $52,200 5%

All categories $38,500 $57,000 8%

At the programmer level, salaries are up 5 percent to 32 percent over last year at the senior level, while companies are holding the line at entry-level salaries. Programmers in e-commerce environments saw bonuses of 11 percent of their annual salary, compared with 8 percent overall. The typical entry-level programmer makes between $28,500 and $36,200 (unchanged since last year), a range which jumps to $38,500 to $57,000 after five years' experience.

NETWORK ADMINISTRATOR COMPENSATION TRENDLINE

(Average Annual Base Salary)

$42,000 38,000 43,000 46,000

1996 1997 1998 1999

NETWORK ADMINISTRATOR SALARY RANGES

Low (25 %) High (75 %) Bonus

E-commerce environments $35,000 $50,000 10%

Groupware/collaborative $38,000 $52,200 4%

ERP environments $38,500 $50,000 5%

Data warehouse/mart $47,000 $55,100 4%

All categories $37,500 $52,500 6%

Network administrators are making up to $52,500 at the high end, a 7 percent jump over last year's survey. Average bonuses equaled 5.8 percent of annual salary, up from 3.9 percent in last year's survey. While network administrators at e-commerce or ERP sites do not make more than their counterparts, those involved in e-commerce report annual bonuses of 10 percent.

DATABASE ADMINISTRATOR COMPENSATION TRENDLINE

(Average Annual Base Salary)

$41,000 46,000 52,000 52,000

1996 1997 1998 1999

DATABASE ADMINISTRATOR SALARY RANGES

Low (25%) High (75%) Bonus

E-commerce environments $35,000 $63,500 11%

Groupware/collaborative $36,000 $57,500 4%

ERP environments $57,500 $62,000 7%

Data warehouse/mart $40,000 $57,500 5%

All categories $38,600 $51,400 7%

Database administrators have not seen appreciable salary gains over the past year, with salaries ranges slipping somewhat, into the $38,600 to $51,700 range. However, those involved with e-commerce and ERP sites reaped much greater rewards in terms of salaries and bonuses, which climbed as high as 11 percent of annual salary for e-commerce sites.

WEBMASTER/INTERNET SPECIALIST COMPENSATION

(Average Annual Base Salary)

$45,800 46,300

1998* 1999

* 1998 was the first year this position was surveyed.

WEBMASTER/INTERNET SPECIALIST SALARY RANGES

Low (25%) High (75%) Bonus

E-commerce environments $40,000 $60,000 10%

Groupware/collaborative $34,000 $41,800 4%

ERP environments $46,000 $60,000 6%

Data warehouse/mart $36,000 $40,100 5%

All categories $35,500 $53,600 7%

Webmaster/Internet specialist salaries held steady over the past year in the $35,500 to $53,600 range. Those involved in e-commerce and ERP efforts saw salary ranges topping off at $60,000 however, with more significant bonuses for e-commerce initiatives.

Webmasters and Internet specialists in the distribution and retail sectors saw the highest salary ranges, falling between $36,000 and $70,000 annually. Bonuses for Web specialists were also significant in this sector, averaging about 12 percent of annual income.

Industry observers agree that those professionals that bring business acumen to the table can almost write their own tickets. IT professionals "are even more in demand if they have business experience," says Keane's Pollard. "More and more, IT is looked upon to help drive business."

DEMOGRAPHICS

The MIDRANGE Systems salary survey included randomly selected readers as well as participants from previous surveys. Respondents were asked to report their own salary levels as well as those of their employees. A total of 102 questionnaires were returned, reflecting pay ranges for AS/400 and other midrange-level positions nationwide. The survey covered several levels of midrange systems professionals, from CIOs to database specialists. Based on salary rates provided, salaries are reported as ranges--the low number represents base salaries falling on the 25 percentile mark, while the high number is base salaries falling on the 75 percentile mark. Average salaries are used in the year-to-year comparative line charts. The survey also covered annual bonuses for each position.

A majority of respondents (71 percent) come from smaller IT departments (with 10 employees or fewer), while 61 percent are with small businesses (500 employees or fewer). Almost a third of the group (29 percent) come from the manufacturing sector, and another 23 percent come from service-related companies. Another 17 percent are affiliated with distribution, wholesale, or retail firms. About 12 percent are with public sector or nonprofit organizations. Nine percent are from utilities, and another 9 percent are with software and application development companies.