Careers: Mainframe Salaries Barely Keep Pace with Inflation, Benefit Costs

Mainframe systems programmers are being compensated on par with their open systems colleagues, but salaries are barely keeping pace with inflation and health care benefit costs.

How are mainframe systems programmers compensated relative to their colleagues who work with open systems?

Pretty competitively, according to more than a dozen of the Big Iron operators with whom we spoke. Most respondents say that they’ve consistently received raises over the last few years, although most concede that these have barely kept pace with—and in some cases, have lagged behind—the cost of living and, increasingly, the rising costs of healthcare plans.

More importantly, most Big Iron professionals feel they’re compensated fairly when compared to their colleagues who manage Windows and Unix systems. Several told us that because of the comparative paucity of professionals with mainframe expertise in the workforce, Big Iron is a great place to be for the foreseeable future.

A mainframe professional with a large U.S. financial services firm says he has survived several rounds of layoffs since 2000, but received a raise last year and is optimistic that he’ll receive another one before this year’s up. At the same time, he concedes, his salary increases—while welcome—have not kept pace with inflation. “My review is due in December, so I don't know how I'll be treated this year yet. Raises have been meager for the last several years. Inflation grows faster than my salary,” he confirms.

As for extra-salary compensation, this professional says that he received a bonus in 2002, and is still hopeful that he’ll receive a bonus this year. And unlike many companies, his employer hasn’t altogether eliminated money for training, either. He believes that the economy itself is starting to turn around, which could have a salutary effect on his compensation. “The industry as a whole is looking much better lately. I am optimistic about everything in general for 2004,” he concludes.

Another mainframe professional with a prominent medical research organization says his compensation has been “fairly stable” over the last few years. “There has been some tightening in education and travel company-wide, but that reflects the rest of the company budget,” he comments.

What has hurt, he says: increases in patient payments under the terms of his organization’s health care plan. “For the first time, we'll have to pay a 10 percent co-pay, where we paid nothing before,” he discloses. “While this is still very good compared to benefits at other companies, it is a change that places a burden on the rest of a person's compensation.”

This tracks with a recent study from the U.S. Bureau of Labor Statistics, which found that even as employers have assumed a greater share of the burden of rising health care costs, the premiums employees are expected to pay for coverage rose by 75 percent over the last decade, outpacing increases in wages or inflation.

As for compensation, this mainframe professional says he has received raises each year for nearly half a decade. “I've received a raise each year since 1999 and have not been given a reason to think that this will not continue. There has been no talk of salary freezes,” he says, adding that because his employer is a not-for-profit organization, it doesn’t typically award bonuses.

A mainframe systems programmer with a prominent U.S. bank says the economic downturn forced him to exchange his lucrative consultant’s hat for the more mundane trappings of a salaried employee. “I was consulting at $125 per hour. Now I have a [permanent] position at a much lower rate,” he says, adding that he has not received a raise, nor a bonus of any kind, since taking his current position. Even so, he concedes, he believes that he’s compensated “very well” in relation to his colleagues who work with Windows and Unix systems.

Some grizzled Big Iron programmers have suffered compensation setbacks as a result of forces other than the economic downturn. For example, a mainframe professional working as a contractor with a prominent manufacturer of athletic apparel says that he was forced to take a pay cut—equivalent to 10 percent of his salary—just this year. As if that’s not enough, his company also asked him to take a month off without pay this summer, which resulted in an additional pay cut of 8.5 percent.

Given the requirements of his job, however, he’s not surprised. “My customer intends to do away with the mainframe altogether in two years,” he says. “Since 2000, my job has been to support that conversion, and the group I work in has reduced head count respectively.”

The overwhelming majority of mainframe professionals we surveyed say their companies aren’t planning to move away from Big Iron. In fact, many cite the use of Linux and Linux-related workloads as factors that are helping to increase the profile of Big Iron in their organizations. With few exceptions, then, they’re optimistic that they’ll once again receive competitive salary increases and other forms of extra-salary compensation when the economy improves. And as we’ve noted, most feel that they’re compensated fairly compared to their colleagues who manage Windows and Unix systems.

Nevertheless, a surprising number say that mainframe operations and education appear to be afterthoughts in their organizations.

For example, a the mainframe systems programmer with a large U.S. retail chain says that even though he hasn’t suffered a pay cut, his company has eliminated at least one Big Iron support position. “One CICS sysprog job [was] eliminated, which added workload to the rest of us,” he told us. In addition, his company has delayed Christmas bonuses for higher-salaried employees, cancelled all training, and offered salaried employees one week of non-paid vacation per year. As for raises, he says, there’s not been much to write home about. “We all received the minimum [salary increase], about 2.5 percent in those years. Of course, cost of living and increased health care payroll deductions effectively made that a loss.”

Another mainframe systems programmer with a county municipal government says his compensation has stayed pretty much the same over the last three years—even though his organization has lost approximately 20 percent of its mainframe systems programmers as a result of retirement. At the same time, he says, his organization has cancelled all education, even for younger staff members who were training on mainframe systems. “[Training is] on as absolutely required basis, instead of getting the younger team members educated enough to take over when several … people [with more than 20 years of experience] leave,” he comments. “This will force us to hire outside when that happens.”

The upshot, says the mainframe professional with the U.S. retail chain, is that IT organizations are not training a new generation of workers to replace many of today’s grizzled mainframe veterans. As a result, this systems programmer and others are optimistic that their services will always be in demand. “Scant attention is paid to the mainframers these days. The realization that no new ‘sysprogs’ are coming through the college pipeline has not yet sunk in with the executives outside of IT,” he points out. In contrast, he observes, “there are so many ‘open’ programmers coming out of colleges these days searching for jobs that employers may not have to offer premium dollars.”

Adds the mainframe systems programmer with the county municipality: “[Mainframe expertise is] a skill set pool that is not being added to mightily, that is for certain. So a dwindling base and a static-to-slightly-increasing market for those skills certainly makes me feel that I won't be excess baggage any time soon.”

These arguments were repeated by many of the professionals with whom we spoke. Optimism isn’t quite universal, however. For example, a systems programmer with a regional insurance company in the U.S. told us that his employer has “limited growth potential for a late-career technician.” As a result, he says, he’s pursuing education on his own. “I am currently pursuing a Master's degree in Computer Information Systems to allow for future possibilities,” he says.

Elsewhere, most of the professionals we surveyed aren’t offered stock options as a form of extra-salary compensation. The athletic apparel contractor admits he actually lost a great deal of money on a stock purchase plan when his employer offered it in the past. “Now they've revised the plan so employees can buy it at the regular price, the only benefit being no brokerage fee. I have declined to participate."

In the end, some grizzled mainframe types say that they’re content to continue working with their beloved platforms, regardless of compensation. “My perspective is that rewards are not entirely of the greenback kind,” says a mainframe professional with a prominent IBM reseller and business partner. Although he hasn’t received a raise in several years, this mainframe programmer says that he simply loves what he’s doing: “I'm sure that I'm in the minority, but I really do love what I do, and although I wouldn't do it for nothing, the lack of raises over the past few years hasn't hindered my impression of the field or the job.”