IT Hiring and Salary Trends for 2005

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From the early 1970s to 2000, IT was one of the few fields that enjoyed a bit of a monopoly on job security, job mobility, and stellar salary growth.

The bad news is that salaries and contract rates have been down for the last few years. Hiring has been down, and finding a new position can take three months or longer. Your technical skill set is like bread: The longer it is out, the more stale it becomes and the harder it is to get someone to buy it. There comes a point of no return, and that point is different for everyone, based on their skills, attitude, and ability to sell themselves.

The good news is that my research and experience indicate that recovery has been underway for the last nine months or so. Unemployment has decreased in many regions of the country. Candidates have been getting hired faster, and some people are even getting multiple offers. We will probably never again see the likes of the hiring frenzy of 1998-1999, but the market has improved.

Understanding the IT Landscape

IT went from simple to complicated. We have gone from being IT generalists to having specialists for every area that technology touches. Just think of how many IT acronyms and buzzwords there are today compared to the '90s, '80s, or '70s. While it is impossible to know everything, today's IT professionals are expected to know more about their areas of responsibility than ever before. If you are an iSeries systems administrator, you need to not only know the iSeries itself, but also LANs/WANs, firewalls, routers, switches, email servers, print servers, security, and desktops. If you are an application developer (formerly known as a programmer/analyst), you no longer just code. You need to know your ERP system, be a business analyst, port applications to the Web, maybe help develop a portal, possibly manage a project, interact with users and non-IT management, and understand and evaluate new technology.

What IT Skills are Companies Looking For?

In 2000, I wrote an article similar to this one, so I can easily compare today's job opening numbers to those of five years ago, which is shown in the table below. Then, some categories either were not tracked or were considered irrelevant, so they are designated as Not Applicable (NA). I feel it is safe to say that at least four out of five of the listings by recruiters are for the same openings. In other words, out of 295 RPG jobs nationwide, the actual number of openings might be more like 60. I did a sampling on Dice.com using the keywords "iSeries" and "AS400" for California, and there were 120 listings during the last 30 days, and only 12 of those were by companies. However you look at it, there are far fewer RPG jobs today than there were in 2000.

The following results from Dice.com were obtained using job listings for the entire United States posted during February 2005.

Dice.com Job Listings
Job Category/Keyword
September 2000
March 2005
All permanent job listings
116515
64896
SQL Server
50
11930
Java
30755
9244
C++
NA
9423
C#
NA
9024
C
NA
6922
Visual Basic
7744
6983
WebSphere
NA
1986
MS. Net
NA
7305
UNIX
33309
9967
Oracle
22304
3305
AS/400
9229
431
RPG
526
295
PeopleSoft
1824
2114
PeopleSoft EnterpriseOne/OneWorld
NA
172
J.D. Edwards
NA
309
SAP
2396
4262
Informix
1999
359
Web Developer
31708
618
Jobs that include Windows NT or 2000/2003
26404
4859
DBA
5497
2227
Oracle DBA
3796
548
DB2
2519
2066
DB2 and AS400 or iSeries
65
165
Java and AS400 or iSeries
96
158
COBOL
1798
913
Business Analyst
N/A
2259
IT Project Manager
N/A
1587

Note: Some job listings included more than one of the above-listed skill sets, such as Oracle, UNIX, and Java.

Where Did the Jobs Go?

During the last few years, I have spent an extraordinary amount of time talking to job seekers about why they couldn't find a job. I've heard a lot of stories about companies closing, moving off of the iSeries-AS/400 platform, and switching to SAP or Oracle or PeopleSoft as well as stories about mergers, acquisitions, budget cuts, outsourcing, and offshoring.

We threw enormous resources at the Y2K issue to fix it. While most of the resources came from within our borders, some of those resources came from abroad. As soon as the Y2K issue was fixed, we began heading into a recession (March 2000). But the offshore resources had discovered "gold" in the United States, and with Y2K fixed, they were looking for new ways to generate revenue. Enter the laws of supply and demand. Offshore workers and H-1B visa holders were inexpensive to hire, and they were being trained in the newer languages and technologies, like Java, Oracle, C++, etc. Many of those H-1B visa holders were granted permanent residency after three years, adding to the number of people competing for permanent jobs in the United States.

At the same time, companies began taking advantage of a less-restrictive government that allowed mega-mergers like we have never seen before. Sometimes, when companies merge, nothing happens for a few years, so the company bears the cost of two IT departments on different platforms and different software. Something has got to give, and it does. Often, the high-salaried people are the first to go to cut cost. Salary increases take a back seat to job security, and bonuses are eliminated from the corporate language. Contract programmers have become a luxury for IT departments and are now utilized minimally and only as a short-term tool.

These mergers have had the biggest effect on the number of job opportunities and the number of displaced IT people. This will continue to be the biggest threat to your IT career, and this is the most pressing reason to be proactive about protecting your career. When two companies merge, the IT department with the loudest voice usually determines the platform and software of the new organization. This may not always be the iSeries. When it's time to cut the staff by 20%, the managers will look at what skills you have and how adaptable are you for the new IT group.

Don't Become a Dinosaur

One thing I have learned as a recruiter is that when employers' needs change, you have to adapt to the changes quickly. When I started in the recruiting business, I recruited for every IT job function and every platform. Choosing to specialize in the IBM System 38 and System 36 gave me a definite advantage...for a while. Then, companies began asking for PC technicians, network specialists, business analysts, Visual Basic developers, etc., and I had to adapt quickly or miss opportunities. Today, the IT world is a mixed-platform environment, and I get calls for RPG programmers, systems administrators, Lotus Notes developers, business analysts, project managers, network engineers, SAP programmers, EDI experts, software quality assurance testers, Crystal Reports writers, and the list goes on. The lesson here? Adapt or die.

Increase Your Value: Develop New Skills

More and more iSeries shops are cross-platform: iSeries and Windows, or iSeries and AIX or UNIX or Linux. Large shops are likely running some RPG applications as well as Oracle on a UNIX box. Or maybe they're running some applications in SQL Server or Visual Basic or Java. Find a way to get on cross-platform projects. Taking classes, engaging in self-study, and attending user groups will help you convince the powers that be that they should include you on those projects.

In the IT industry, some jobs are easy to outsource, while others require face-to-face interaction with users. Business analysts, project managers, and software quality assurance testers generally need to be constantly interacting with the user. These are good positions to adapt into. Determining what the users want, developing specifications, testing them with the users, and training the users need to be done where the users reside. Other jobs offering some security are e-business developer, information architect, and data warehouse specialist.

Show Me the Talent, and I'll Show You the Money

Everyone wants to get paid more. During the last three years, IT salaries have been flat--in some cases, even down a little. Contract programmers especially have felt the pinch. Contractors who were used to getting $55 to $60 per hour are now earning about 30% less and feel lucky to even be working. Some who have not been so fortunate have either tried to become employees or had to find new careers. I can tell you story after story of people who were forced to cash out on their homes and move to somewhere cheaper or who are now working at Home Depot as cashiers or doing QuickBooks for $20 per hour.

As businesses continue to recover this year, I believe we will see raises in the 3.5% range, and those who had salary freezes will change jobs to recoup missed increases. The table below gives you a realistic guide of iSeries and AS/400 salaries in the major metropolitan markets like Los Angeles, San Francisco, Chicago, New York, Atlanta, and Dallas. Note: Salaries in rural markets may be as much as 10% to 15% less.

2005 Salary Guide
Position
Low
High
PC Help Desk
$42,000
$49,000
Computer Operator/Administrator 2-5 yrs.
$45,000
$54,000
Operations Supervisor 5+ yrs.
$54,000
$70,000
Network Administrator
$52,000
$68,000
Certified Network Engineer LAN/WAN
$64,000
$85,000
IBM iSeries or AS/400 Systems Administrator
$65,000
$85,000
Security Analyst 6+ yrs.
$77,000
$98,000
Technical Support Manager
$76,000
$95,000
Programmer Analyst 3-5 yrs.
$65,000
$75,000
Sr. Programmer Analyst 6-8 yrs.
$75,000
$90,000
Programming/Applications Manager
$92,000
$110,000
Contract Programming RPG
$40/hr.
$55/hr.
Contract Programming Java, VB, SAP
$45/hr.
$65/hr.
JD Edwards PeopleSoft EnterpriseOne
$50/hr.
$70/hr.
Sr. Java/WebSphere Developer
$80,000
$100,000
Software Quality Assurance - Automation
$62,000
$82,000
Business Systems Analyst
$72,000
$84,000
Project Leader 7+ yrs.
$82,000
$95,000
Project Manager
$83,000
$103,000
Operations/Data Center Manager
$85,000
$108,000
MIS Manager, staff of 3-8 - $110,000 +
$90,000
$110,000+
MIS Director, staff of 8-25
$96,000
$115,000+
MIS Director, staff of 25-70
$108,000
$130,000+
CIO/VP of IT, staff of 70-200+
$118,000
$155,000+

Courtesy Excel Technical © 2005

There are always exceptions above and below these salary ranges, but these figures will give you a sense of salaries for major cities. Unique skills and experience with specific software packages tend to command the upper side of the scale.

However, although salary is important, it's not the main reason people change jobs in the technical fields. Learning new technology and challenge are at the forefront.

Mapping Your Future

In order to know where you are going, you need to understand how to read the signs of a changing market. You need to be aware of new technologies and trends that could secure or jeopardize your career. What would happen if IBM released a tool that could convert all RPG code to Java instantaneously and priced it so well that companies could not resist buying it and converting all their systems to Java? And suppose that IBM then announced that it would no longer sell, support, or license the RPG compiler? Such a scenario is not too far-fetched.

Most people are so busy working, commuting, taking care of the house, having time with the family, etc. that they don't pay enough attention to their careers. Unless you are planning on retiring in the next four or five years, you cannot afford to ignore your career.

Learn to Speak the Language of the New Technologies (Talk the Talk)

Start by subscribing to e-newsletters and hard-copy trade magazines that include the iSeries as well as other platforms and programming languages. Many are free if you fill out the information form (such as IBM eServer magazine, Computerworld, eWeek, InfoWorld, PCWorld, Networking World, Redmond, and of course, the MC Press Online family of publications). If you are reading this, you have started to keep yourself informed. Get your colleagues on the same page and compare notes. Buy and read a couple of technical books a year on new topics you are interested in. Get involved in your local iSeries user group. If you don't have one, start one up. You can get help from COMMON, your local IBM representative, and other user groups around the country, including the OCEAN User Group. Make a point to attend at least one educational conference per year. Check out other user groups focusing on Microsoft or Visual Basic. People spend $30,000 for a car to get to work, but they won't invest $200 on their career. Get your RPG skills up-to-date. If you are not up to par in ILE RPG, free-form RPG, RPG-CGI, embedded subfiles, and such, you could have a hard time finding another opportunity if you lost your current position. Take a class in Java or Visual Basic, MS .Net, Crystal Reports, or XML. If you are in tech support, take classes and get certified in the areas of Windows servers, Cisco, Active Directory, and security. Managers need to start taking classes toward a PMP certification or an MBA in IT. This is called "career insurance."

With so many different tools and technologies, it is impossible to be an expert in all areas, but it is wise to have at least a surface knowledge of new tools or techniques that are likely to become more mainstream or that directly impact your current job or skills.

  • Use trade magazines and e-magazines to keep yourself informed of what industry specialists are saying about new technologies or trends.
  • User groups are a great way to discuss new technology, its benefits, its impact on existing technology, and much more.
  • Try using new technology or methods on a new project. (Get free sample code from sites like MCPressOnline.com.)
  • Listen to technical recruiters and find out which skills they consider in or out.
  • Follow the job boards and your local classified ads to see what type of skills companies are advertising for. Do this often enough to be able to gauge any changing trend. Look under Java or WebSphere or MS .Net to get an eye-opening experience.
  • Try taking an online class from the convenience of desk.
Evaluate the combination of data you have collected from trade magazines, user groups, colleagues, recruiters, and classified ads to form your own conclusions and become your own expert analyst.

While history does repeat itself, there are some new truisms that were not in our books when we studied economics. The world has changed, and it will continue to change. There are no more "gold watches," and it may not be realistic to expect to have your job for five or 10 more years. You chose the field of computers because of its constant evolution. Evolve with it or be left behind by those who will.

Bob Langieri is the president and director of Excel Technical, an IT staffing firm in Southern California and past president and current board member of OCEAN User Group. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

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