IT Salaries 2012: $90,000, 1% Raise Typical

U.S. IT salaries are doing just OK. IT remains a well-paying field, with median total compensation of $90,000 for staffers and $116,000 for managers. Staffers report a median raise in total compensation of 1%, while managers report a 1.8% raise, according to our 2012 U.S. IT Salary Survey of 13,880 IT professionals. As recently as 2010, the median raise was zero.

As always, there's a wide range of salaries depending on skills and industries. Total median compensation for staffers ranges from $105,000 for those with ERP skills to $55,000 for those on the help desk. A few niche job functions, such as wireless infrastructure ($115,000) and cloud computing ($110,000), reach even higher, but the sample size for those specialties is quite small.

But pay's on the rise across job functions. People who perform 11 of 23 staff job functions report median total compensation above $100,000. Last year, just three staff functions broke the six-figure barrier--ERP, enterprise app integration, and data integration and warehousing. With managers, all but two functions, training and help desk, top $100,000 this year.

One skill in very high demand is business analytics. Think of people with these skills as those who can marry business wits and industry savvy with technical understanding, and ideally some statistical chops. While that business-tech blend has always been sought after, demand is rising as companies try to make sense of their mountains of data and as IT becomes ever more embedded in business operations.

Drew Duncan, a lead business intelligence analyst with Brown-Forman, which makes Jack Daniel's, Southern Comfort, and other alcoholic beverages, sees more opportunity in IT analytics than he can grab. Duncan's from the old school of analytics, with 15 years of experience using BI platforms such as BusinessObjects to pull data out of SAP and other systems to create dashboards that let execs see what's selling and shipping, and to dig into those results. Old school's usually not a complement in the tech world, but the demand for conventional BI skills keeps rising.

At the same time, Duncan watches with envy the rise of a new school of analytics centered on emerging technologies such as Hadoop, focused on gleaning meaning from the growing mass of unstructured data such as Web traffic and social network comments. He'd love to immerse himself in this hot area, but Brown-Forman's keeping him plenty busy with conventional BI. It's an energizing problem for a 52-year-old IT pro to have. "I'm not in park," Duncan says. "I'm in high gear."

Median total pay for business analytics managers has climbed 11% since 2010, and 8% for staffers. Companies are drowning in data and looking for business-savvy technologists to help them make sense of it. Among our 23 IT job categories, BI managers rank fourth in total compensation, earning $135,000. BI staffers are more middle of the pack, tied for 13th (with telephony and unified communications staff), earning $95,000. That middle-of-the-pack rating reflects the range of people in this role--from those generating flat reports to those in higher-end roles using BI to do analysis. Data integration and data warehousing managers rank sixth in total compensation, at $131,000, while staffers are eighth, at $101,000.

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An Unforgiving Market

The rise of the business analyst has a flip side: the decline of some U.S. programming jobs and app and system support jobs over the past decade because of automation and offshore outsourcing. One IT pro in the Midwest (who asked that his name and company not be used) says he faced that reality a couple years ago when the bank he worked for was acquired by one of the giants. He supported the credit card unit's autodialing software, which is used to call people who are late on their payments, and the acquiring bank was a big user of offshore outsourcing. "It seemed like the writing was on the wall, that my role was going to be outsourced," he says.

He worked his relationships in the credit card business unit, and now instead of supporting the technology, he's an analyst helping business managers sift through call data to assess how well call agents are doing and how they could be more effective. He bought books on SQL and SAS analytics to learn those skills, and he's taking a course to bone up on PowerPoint, since he's doing more presentations. He earned a 4% raise with the new job, and he sees more potential for advancement. Back in his old division, staffing is down from 12 people to two.

Brown-Forman's analytics needs have changed as the company goes increasingly global. In the U.S., where the law requires distillers to sell through a distributor, its dashboards are more focused on production and the distributor channel, Duncan says. In other markets, Brown-Forman has been buying distributors, so its dashboards need more of a retail focus. Duncan needs to know data warehousing and BI technology well enough to design the data cubes, but he also must understand the business needs well enough to tease out from executives what would be the most valuable analyses. "A lot of people don't know what they need until they see it," he says. "Sometimes that's a very iterative process."

Procter & Gamble plans to quadruple the number of analytics people it employs and sit them with the nearly 60,000 employees who now use the company's data "cockpits." Web-based companies such as AOL, ComScore, and eHarmony are using clickstream and mobile big data analyses to identify the most promising potential customer, marketing partner, or soul mate.

Skill Shortages

This growing faith in data-driven decision-making is creating a talent shortage. Stacy Blanchard, talent organization lead at Accenture Analytics, a 2-1/2-year-old unit of the management consulting and technology services firm, says the big push among clients is to find people who can tell the CEO what's going to happen next--not what happened last week or last month. (Accenture Analytics alone employs more than 20,000 people.)

"They're typically statisticians who are deep into data modeling, they're close to the technology, and they know the right algorithms to use with the data available," Blanchard says. These next-gen analytics specialists are more receptive to open source tools and cloud computing than their predecessors. "They want to be sure that they're using the latest, greatest technology and have access to certifications and training," she says.

In the U.S. alone, McKinsey predicts that demand for big data and deep analytics experts will exceed the supply by 140,000 to 190,000 positions by 2018 if current trends continue. What's more, U.S. companies will need 1.5 million more managers and business analysts who can ask the right questions and consume the results of big data analysis, according to the McKinsey report "Big Data." Companies can't count on college grads or immigrants to fill that gap, McKinsey concludes: "It will be necessary to retrain a significant amount of the talent in place."

More Than An Order Taker

That retraining happens all the time at Chevron. About 10 years ago, Chevron joined the wave of companies that shifted much of its programming to offshore outsourcers. Many of the IT pros who remained retrained to move into business analyst roles, helping business units such as retail or functions such as human resources and finance translate what they wanted to accomplish into IT system requirements. Chevron now has a center of excellence focused on training business analysts.

Sandi Spillner has been a business analyst at Chevron for 15 years, but her job keeps changing every few years, forcing her to learn the equivalent of a new industry with each move. She used to work with the retail group, so she had to learn the nuances of running gas stations to help that team build systems. She was later embedded into marketing, then 2-1/2 years ago, HR. "I think it takes a couple of years to be comfortable" with each new role, Spillner says.

That humility--admitting you don't always know the answer rather than bluffing your way past it--is a key trait for a business analyst. "We have to teach people it's OK to ask questions," Spillner says.

Total compensation for the staff title "business analyst" is up 8% since 2010, our 2012 Salary Survey finds. Earning $95,000 on average, business analysts' compensation is up 9% since 2010; they now make 5% more than the median total IT pay, compared with 2% more in 2010. Only telecom specialists (up a shocking 23%) gained more since 2010, but at $86,000, telecom compensation remains below the IT median. Business analysts still aren't in the rarefied air of architects, whose $129,000 median compensation ranks them No. 1 among IT staff titles.

ERP continues to pay well, a median $105,000. That finding may surprise those who think the age of big ERP projects has passed, but ERP is the information engine at many companies, providing some of the most trusted and consistent data. Now companies want to wring more value out of those systems by zeroing in on the data.

At Brown-Forman, Duncan works mostly with the finance team, and his projects rarely involve installing new software systems or tapping new sources of unstructured data like favorable or unfavorable comments on Web forums, the way a marketing team might. Instead, his work usually involves talking with end users about the problems they're trying to solve and "figuring out how to use what we already have" to get them data they need to solve a problem.

Pay And Stability Motivate

Our 2012 research shows almost no change in what motivates IT pros. For staffers, it's pay, stability, benefits, and a flexible work schedule. For managers, it's having their opinions valued, followed by pay, challenge, and stability.

Working with cutting-edge IT is a priority for only 21% of staffers and 19% of managers. Working on new and innovative IT systems is a priority for about the same share. CIOs should note this finding; fast-changing tech environments aren't for everyone. About a fourth of survey respondents put a premium on working with highly talented peers. Only one-fifth of managers and staff consider the potential for promotion key.

Chevron's Spillner likes not knowing what each day will hold as she digs in alongside an HR manager. "I really enjoy being able to solve problems," she says.

IT pros are reasonably satisfied and secure in their jobs. Sixty-two percent of staff and two-thirds of managers are satisfied or very satisfied with their jobs, nearly identical to the levels of the past five years. There's been a slight rise in job security, with 40% of staffers feeling highly secure, up from 34% in 2010. Just 12% feel insecure in their jobs.

Learn Or Be Left Behind

IT pays well, but it's unforgiving for pros who let their skills get stagnant. It's a learn-or-be-left-behind profession. Like the bank data analyst who taught himself SQL and SAS, IT pros can't count on their employers to keep them up to date. About half of IT pros in our survey attended company-paid training, and a smaller percentage paid their own way for training (about 15%) and certification courses (6%). Thirty-eight percent of staffers and a third of managers received no training in the past year.

Andrew Young offers a reminder that an IT career requires a mix of skills, timing, and good luck. After Young graduated with an IT degree in 2007, he got a job with Cincinnati-based grocery chain Kroger, working to improve processes using Six Sigma practices. He enjoyed the experience but itched to get more directly involved with technology. We constantly hear CIOs talk about the need for people who understand both business and IT, so Young's Six Sigma experience and IT education would seem to be ideal. But Young had trouble getting back into an IT shop. Part of it was timing: This was 2009 and 2010, when hiring freezes, layoffs, and unpaid time off were de rigueur.

So Young enrolled in 2010 in an IT management master's program, which he's due to finish in June. As soon as he enrolled, employers got more interested in him--including Kroger, which moved him into a business analyst job. Young gets some tuition reimbursement, but only one-fourth of the IT pros who responded to our survey get that benefit. Only one-fifth get reimbursed for certification training.

Few IT pros are clamoring for college coursework. Only 10% of staffers and 7% of managers think taking college-level technology or business courses would be "most useful" to their careers. Fifteen percent of managers think an MBA would be most valuable. By far the most in demand is tech-specific training, sought by 76% of staffers and 54% of managers. Despite employers' great demand for analytics skills, only 6% of staffers or managers see statistics or analytics training as the most useful to their careers.

Whether it's formal coursework or on-the-job training, IT pros know they need to constantly add to and update their knowledge base. Even if IT salaries are up slightly, IT pros can't just wait for the economy to lift their boats amid the forces of automation, cloud computing, and outsourcing. IT is a diverse industry, and there's never been one path to professional success. Roles as diverse as architect, project leader, and information security specialist remain promising, as do those that blend business, technology, and analytical skills. --With Doug Henschen

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