2004 Salary Survey, Part 2: IT Middle Managers Feel the Pain

Salaries and bonuses for IT executives fell on hard times in recent years. Compensation is down in half of the positions surveyed.

The recent IT slump dampened the compensation of many IT executives, especially those in the middle. Top-level executives such as CIOs and IT directors may have escaped the cost-cutting carnage, but IT managers closer to the front lines underwent painful pay cuts that still resonate in today's paychecks. The more fortunate among IT middle managers are only seeing slow salary growth.

These are the findings of a recent salary survey of 1,130 enterprise IT sites conducted by Enterprise Systems. The latest salary survey tracked salary figures for IT managers and professionals across a broad spectrum of organizations. A majority of respondents (54 percent) are managers of IT departments or principals with their companies. Our survey covered eight IT management positions, including chief information officers/vice presidents, IS directors, IS managers, application development managers, data center/operations managers, networking managers, help desk/support managers, and Internet managers/directors. (The results of IT staff positions are available in Part 1 of our survey. Our job description page includes a list of the responsibilities of each position.)

Respondents also come from a wide range of company sizes and industries. About 38 percent represent larger organizations with more than 5,000 employees; 35 percent are in companies with 500 or fewer employees; while 22 percent are part of IT departments with more than 1,000 employees.

Companies are providing the highest rewards to IT executives who have the ability to build and deploy systems that integrate business-partner information. Executives engaged in supply chain management initiatives for their organizations tend to see premiums 10 to 23 percent higher than the average salary. Those overseeing mainframe sites also have the highest salary levels.

The survey also picked up another disconcerting trend: IT executive salaries grow rapidly through the first decade of experience, but tend to top out after that point. With the exception of C-level executives, there's very little or no premium built into the base salaries of seasoned IT managers beyond two decades.

The survey also covered IT staff positions, which were covered in last week's report. Notably, most of these positions experienced at least slight gains in salary since the last Enterprise Systems salary survey was conducted in 2002. However, half of the eight management-level positions covered in this week's report lost ground since the last survey.

Many respondents lament that they are not quite out of the woods yet in terms of IT budget cutting, a trend that often hits managers hard. "Almost everybody has taken some sort of cut in order to keep their job here," says the manager of networking for a Midwest auto dealership.

The fact that IT managers tend to draw higher salaries than line positions also made them larger targets for cost-cutting moves. "We've had to cut a lot of higher-salary positions due to the computer-service industry shrinking and outsourced jobs," says the manager of information systems for a small Midwest-based service firm. "Higher-salary employees are under greater scrutiny," relates the network design engineer for a large midwestern utility.

However, there are many bright spots, and not necessarily based on technical prowess. "My company has been profitable throughout the downturn. Intelligence, speed, precision, and hard work are drawing the highest premiums this year," says the technical consultant for a large West Coast computer equipment manufacturer.

One area seeing increased value, cited by a number of respondents, is that of project manager. While project manager is often a formal job title, and formal certification is available, many IT management jobs also incorporate project management skills.

Note: N/A in the tables below indicates "not available" -- the question was not asked in our 2001 survey.

CIO AND VICE PRESIDENT OF IT

Chief information officers or IT vice presidents, who plan the company's broad IT direction and make all final decisions, also saw tremendous growth in their annual base salaries, reflecting a bounce back from the sluggish years of 2001 to 2002. Currently, these IT executives earn about $130,000, compared to $110,560 in the previous Enterprise Systems salary survey conducted in 2002. This translates into an increase of close to 18 percent over a two-year period.

Across the board, CIOs are projected to earn average bonuses of about $25,400 on top of their base salaries for this year. This is the highest percentage bonus (19.5 percent) for any of the IT management positions measured in this survey.

At this level, experience counts for a lot. On average, seasoned CIOs with more than two decades of experience make up to 65 percent more than their less-experienced counterparts. The typical CIO or IT vice president in our survey has about 19 years of industry experience. CIOs managing organizations with ERP systems fare best ($151,100), followed by those at companies with data warehouse environments ($144,200).

By operating system environment, CIOs in mainframe-driven organizations earn the most, drawing an average salary of $164,300 -- more than 26 percent above the industry average. Those managing organizations with OS/400 systems follow, at about $148,900. CIO salaries are strongest within the utilities/transportation sector, averaging about $181,000, followed by financial services, where CIOs typically pull in about $158,500.

CIO/VP SALARIES

Year-to-Year Change
2004 2002 2001 Change 02-04
$130,000 $110,560 $120,700 +17.6%
Average annual bonus for 2004: $25,400

By Experience Level
<10> 11-20 years >20 years Differential
$91,000 $122,800 $149,800 +64.6%

By Operating System Environment
Mainframe OS/400 AIX/Unix Windows Non-Mainframe
Linux
$164,300 $148,900 $1482,500 $115,100 $130,600

INFORMATION SYSTEMS DIRECTOR

Information systems directors, as with many IT managers saw relatively meager increases in salary growth, but robust bonuses. IS directors -- who plan, direct and control all day-to-day information systems functions -- saw average salaries grow by three percent over the past two years, up from an average of $92,510 to $95,250. However, salaries are still down from the level reported in the 2001 Enterprise Systems salary – at that time, the average salary was $99,100. IS directors are projected to also earn bonuses of about $10,600 this year -- or about 11 percent of their base salary.

The typical IS director in our survey has about 15 years experience and oversees a staff of close to 70 employees. Long-term salary growth prospects appear good for professionals remaining in these positions, survey respondents told us. IS directors with 10 to 20 years of experience have base salaries topping $104,000 -- 38 percent more than their less-seasoned counterparts. However, this is the point where salary growth tops out. IS directors who have stayed on longer than two decades typically see lower salaries. This is a phenomenon found across most IT management positions in the survey, which shows that many hit the top of their salary range by this time.

IS directors leading organizations with ERP and supply chain management environments saw the highest premiums, earning average base salaries of $105,100 and $104,200 respectively in each category. "We have had stagnated growth, but the highest premiums go to those IT managers who interface well with customers/clients and have excellent business and communication skills," says the IT director of a large software development firm based in the mid-Atlantic region.

"Business skills are the most in demand," echoed another respondent, the director of IS for a manufacturer based in the western United States. "The ability to interface with the consumers of the system and be able to translate that into technical specs."

IS director salaries are strongest within the computer industry itself, averaging $108,900 within this sector. IS directors within utility/transportation organizations followed with $106,800.

IS DIRECTOR SALARIES

Year-to-Year Change
2004 2002 2001 Change 02-04
$95,250 $92,510 $99,100 +3.0%
Average annual bonus for 2004: $10,600

By Experience Level
<10> 11-20 years >20 years Differential
$75,600 $104,000 $95,700 +26.6%

By Operating System Environment
Mainframe OS/400 AIX/Unix Windows Non-Mainframe
Linux
$107,800 $97,700 $106,500 $88,600 $100,800

INFORMATION SYSTEMS MANAGER

Moving down into middle management ranks, salary levels get a little shaky, reflecting the tight IT budgets that have gripped the industry in recent years. Information systems managers -- men and women who plan and approve equipment and software purchases, and also plan, direct, and control all day-to-day information systems functions -- now make average base salaries of about $81,100. This reflects a decline of almost six percent since the 2002 survey.

There is still plenty of upward mobility for this level, the survey shows. Seasoned IS managers -- those with at least two decades' experience -- make almost 24 percent more than those newer to the position. The typical IS manager in our survey has about 13 years of industry experience.

IS managers in mainframe shops make the most, our survey finds, topping $94,200 a year in base salary. Those executives oversee AIX and Unix environments now average $88,400 a year.

As with the previous categories, companies deploying and managing with supply chain management and data warehouse systems had the most generous compensation, paying annual base salaries of $90,500 and $87,900 respectively. IS manager salaries are strongest within the financial services and utility sectors, averaging $92,800 and $89,800 respectively. Across the board, IS managers are projected to also earn bonuses of about $6,100, or about 7.5 percent of their base salaries for this year.

IS MANAGER SALARIES

Year-to-Year Change
2004 2002 2001 Change 02-04
$81,100 $86,100 $78,600 -5.8%
Average annual bonus for 2004: $6,100

By Experience Level
<10> 11-20 years >20 years Differential
$73,300 $83,500 $90,800 +23.9%

By Operating System Environment
Mainframe OS/400 AIX/Unix Windows Non-Mainframe
Linux
$94,200 $84,200 $88,400 $76,600 $85,600

APPLICATION DEVELOPMENT MANAGERS

For application development managers, salary levels have barely edged upward over the last two years. AD managers -- employees who plan, direct, and control all day-to-day application development functions -- are earning base salaries of about $87,500, or a 2.2 percent bump over the last survey in 2002.

In many cases, bonuses have made up for some of this tepid salary growth. AD managers are projected to earn bonuses of about $7,100, or eight percent of their base salaries for this year. The typical AD manager in our survey may only see modest salary growth throughout his or her career. Salaries range between $83,300 at entry level to $93,900 for more than a decade's worth of experience. Beyond 20 years, salary growth stalls altogether.

AD manager salaries are strongest within the financial services and general services sectors, averaging $95,000 within both. Those executives leading supply chain management system environments have the highest rates, averaging about $95,400. Those overseeing development efforts for business-to-business systems also are seeing premium salaries, averaging $93,200.

APPLICATION DEVELOPMENT MANAGER SALARIES

Year-to-Year Change
2004 2002 2001 Change 02-04
$87,500 $85,600 $79,500 +2.2%
Average annual bonus for 2004: $7,100

By Experience Level
<10> 11-20 years >20 years Differential
$83,300 $93,900 $90,800 +9.0%

By Operating System Environment
Mainframe OS/400 AIX/Unix Windows Non-Mainframe
Linux
$89,900 $92,600 $90,000 $87,000 $92,300

DATA CENTER/OPERATIONS MANAGER

Managers charged with overseeing day-to-day operations of data center environments saw relatively little movement in their salaries over the past two years. Data center/operations managers are earning base salaries of about $79,300 – a rise of only about two percent over the last survey in 2002.

Data center manager salaries are strongest within the utilities and software sectors, averaging $85,600 and $85,300 respectively. In terms of annual bonuses for this year, data center managers are projected to also earn an average of $7,200, or nine percent of their base salaries. The typical data center manager in our survey has about 15 years of industry experience, and seasoned data center managers are drawing salaries of up to $80,000.

By environment, our respondents reported that data center managers in Linux shops (with no mainframes) fare best, drawing average salaries of $89,900 -- 13 percent above the average for the profession.

DATA CENTER/OPERATIONS MANAGER SALARIES

Year-to-Year Change
2004 2002 2001 Change 02-04
$79,300 $77,800 N/A +1.9%
Average annual bonus for 2004: $7,200

By Experience Level
<10> 11-20 years >20 years Differential
$73,100 $80,800 $79,000 +8.1%

By Operating System Environment
Mainframe OS/400 AIX/Unix Windows Non-Mainframe
Linux
$81,500 $72,500 $85,600 $77,200 $89,900

NETWORKING MANAGER

Networking managers saw a modest decline in average salary since our 2002 survey, placing this category among the hardest-hit by the recent economic slump. These executives -- who oversee the operation of the computer network -- are earning base salaries of about $70,500, reflecting a decline of about two percent since the last survey in 2002.

Across the board, networking managers are projected to earn bonuses of about $5,700, or eight percent of their base salaries for this year.

Salary growth prospects for networking managers is strong. Salaries range between $58,300 for newer networking managers to $81,800 for those with more than a decade of experience -- a 40 percent differential. However, average salaries fall off for managers at the job for two decades or longer, according to survey respondents.

Networking manager salaries are strongest within the software sector, averaging $80,000. Salaries also above average for networking managers in application areas such as supply chain management systems ($87,000) and business-to-business implementations ($83,700). The salary premium for those executives with supply-chain management systems is more than 23 percent above the average, the highest differential by application area in the survey.

NETWORKING MANAGER SALARIES

Year-to-Year Change
2004 2002 2001 Change 02-04
$70,500 $71,900 N/A -1.9%
Average annual bonus for 2004: $5,700

By Experience Level
<10> 11-20 years >20 years Differential
$58,300 $81,800 $75,200 +29.0%

By Operating System Environment
Mainframe OS/400 AIX/Unix Windows Non-Mainframe
Linux
$83,600 $74,400 $79,300 $64,800 $75,500

HELP DESK/SUPPORT MANAGER

Help desk/support managers -- responsible for diagnosing, troubleshooting, and correcting end-user system access problems -- have seen declines in salaries. They currently earn base salaries of about $59,800 -- down four-and-a-half percent since the last Enterprise Systems survey in 2002.

Help desk manager salaries are strongest within the software and application development sector, averaging $66,300, or about 11 percent above the industry average. Across the board, help desk managers are projected to also earn bonuses of about $3,300, or five-and-a-half percent of their base salaries for this year.

The typical help desk manager in our survey has about nine years of industry experience, and salary growth prospects are moderate for this profession. Our results show a 18 percent differential based on experience -- from $57,200 a year for less-experienced managers to $67,500 for a decade's worth of experience.

Supporting business-to-business application deployments, as well as supply-chain management systems, is also a hot area for help desk managers, our survey finds, drawing more than $65,000 a year.

HELP DESK/SUPPORT SALARIES

Year-to-Year Change
2004 2002 2001 Change 02-04
$59,800 $62,600 N/a -4.5%
Average annual bonus for 2004: $3,300

By Experience Level
<10> 11-20 years >20 years Differential
$57,200 $65,000 $67,500 +18.0%

By Operating System Environment
Mainframe OS/400 AIX/Unix Windows Non-Mainframe
Linux
$67,800 $60,800 $65,600 $56,600 $58,200

INTERNET MANAGER/DIRECTOR

Overall, Internet managers and directors, who are responsible for development and management of company intranet and public Web sites, have seen declines in terms of salaries. They currently earn base salaries of about $71,000 -- reflecting a nine percent decline since the last Enterprise Systems survey in 2002.

However, top-rate premiums are paid to those who support CRM and supply-chain management environments. Internet directors in these industry sectors make $80,20 and $77,400 respectively. By industry sector, salaries are strongest within the service sector, averaging $90,800, or about 28 percent above the industry average. Across the board, Internet directors are projected to earn bonuses of about $5,000, or seven percent of their base salaries for this year.

The typical Internet director in our survey has about nine years of industry experience, and salary growth prospects are excellent for this profession. Our results show a 47 percent differential based on experience -- from $50,100 a year to $73,800 for those with more than five years' worth of experience.

INTERNET MANAGER/DIRECTOR SALARIES

Year-to-Year Change
2004 2002 2001 Change 02-04
$71,000 $78,400 $65,200 -9.4%
Average annual bonus for 2004: $5,000

By Experience Level
<5> >5 years Differential
$50,100 $73,800 +47.3%

By Operating System Environment
Mainframe OS/400 AIX/Unix Windows Non-Mainframe
Linux
$85,700 $77,800 $76,100 $63,700 $69,800

Note: N/A indicates not available -- the question was not asked in our 2001 survey.




Complete IT Salary Survey:

Part 1: Salaries Stagnant for IT Staff
Part 2: IT Middle Managers Feel the Pain
Part 3: IT Follows Bicoastal Economy
Part 4: Complete Survey as PDF, including Section 4: Job Satisfaction; Short Registration Required