IT Salary Survey 2021: Compensation holds steady despite pandemic

Despite economic uncertainty heading into 2021 and rapidly changing industry dynamics, the outlook for IT professionals is a positive one. If the COVID-19 pandemic has done one thing for the IT industry, it’s that it has shone a very bright light on the increasingly critical nature of digital IT tools and infrastructures. What we wanted to find out is how this has impacted salaries and earning potential?

According to the 2021 IDG Insider Pro and Computerworld IT Salary Survey, total compensation over the past 12 months, in terms of base salary and bonuses has not changed dramatically, although the overall average figure for compensation has fallen. However, the IT industry remains a dynamic, well invested and growth-orientated industry. Rapid acceleration in digital transformations over the past 12 months has confirmed this, although the nature and share of compensation compared with the previous year does not necessarily reflect this increased status.

Our annual IT salary survey of 1,172 IT professionals finds that the average salary among all respondents has fallen from $112,580 in 2020 to $104,446 this year, although this doesn’t tell the full story of what has been an unprecedented year with unique challenges. While significantly fewer respondents in the current survey report an increase in salary from one year ago, just over half of respondents (56 percent) did so. This compares with 70 percent of IT professionals who saw a base salary increase in the 2020 survey.

Despite economic uncertainty heading into 2021 and rapidly changing industry dynamics, the outlook for IT professionals is a positive one. If the COVID-19 pandemic has done one thing for the IT industry, it’s that it has shone a very bright light on the increasingly critical nature of digital IT tools and infrastructures. What we wanted to find out is how this has impacted salaries and earning potential?

According to the 2021 IDG Insider Pro and Computerworld IT Salary Survey, total compensation over the past 12 months, in terms of base salary and bonuses has not changed dramatically, although the overall average figure for compensation has fallen. However, the IT industry remains a dynamic, well invested and growth-orientated industry. Rapid acceleration in digital transformations over the past 12 months has confirmed this, although the nature and share of compensation compared with the previous year does not necessarily reflect this increased status.

Our annual IT salary survey of 1,172 IT professionals finds that the average salary among all respondents has fallen from $112,580 in 2020 to $104,446 this year, although this doesn’t tell the full story of what has been an unprecedented year with unique challenges. While significantly fewer respondents in the current survey report an increase in salary from one year ago, just over half of respondents (56 percent) did so. This compares with 70 percent of IT professionals who saw a base salary increase in the 2020 survey.

The highest increases were reserved for senior IT management (either full or part-time), who saw average compensation packages rise from $166,768 to $173,033 last year. In comparison, middle management saw overall average compensation fall from $107,449 to $99, 944, and IT workers fall from $88,571 to $78,662. Over the course of the last four years (2016-2020), senior IT management has seen on average, a 40 percent increase in salary, while middle management and IT workers have seen slower rates of increase, at 10 percent and five percent respectively.

IT contract workers in particular saw significant change over the past 12 months, with 18 percent claiming a decrease in daily rates or base earnings, which accounts for the average day rate for contractors falling from $125/hour in the 2020 survey to $109/hour in the 2021 survey. However, just over half of IT contractors (54 percent) claim they have seen no change, with 28 percent actually seeing an increase.

It’s interesting to also note that the economic challenges many businesses have faced this year have done nothing to dampen expectations on bonus pay. Our survey found that senior IT managers in particular are quite bullish. Last year senior managers expected bonuses of $20,767 on average but this year that has leapt to $27,480 on average. For other roles, there is less expectation, with middle management hoping for $6,768 on average (compared with $6,593 the previous year), while IT staff are actually expecting less this year at $4,865, compared to $5,099 previously.

Reasons to be cheerful

Interestingly, while the rates of increase for standard salary dropped (44 percent compared to 55 percent in last year’s survey), more salary increases were tied to performance (up from 30 percent to 38 percent) which perhaps explains the expectations on bonus pay, especially for the decision makers. Other rises were linked to factors such as new responsibilities (15 percent compared to 11 percent last year), promotions (11 percent v nine percent) and new skills (nine percent v five percent). In the context of the current working and economic environment, this is understandable as more organizations strive to meet the rapidly increased demands of digitization against a backdrop of, in many cases, falling income. That is, without doubt, a positive reflection on the industry.

In terms of actual roles, we’ve seen a few specialisms take center stage when it comes to holding long term salary value and growth. Enterprise application integration, security and ERP roles have seen high double-digit growth in average salaries over the past four years. Enterprise application integration roles have seen 32 percent growth in income since 2016 with today’s average salary of $139,913 topping the income charts. Roles focussed on security are not far behind, with 28 percent growth since 2016 and an average annual salary of $134,365 in 2020. ERP skills come in third, with 25 percent growth since 2016 and an average salary of $130,602 for 2020.

Other notable rises include cloud computing, which has seen 15 percent growth since 2016, business intelligence/analytics with 21 percent and application development, with 27 percent. While these three skill functions command lower salaries in 2020 ($127,025, $118,828 and $124,017 respectively) compared with Enterprise application integration, security and ERP, their relevance to the future success of organizations suggests continued growth in the months to come.

So, are IT professionals happy? It’s been a difficult year for everyone but some more than others. While IT work has by and large, ridden the storm, there is no guarantee of happiness when it comes to accepting reduced salary increases, bonuses or even having no increase at all. Given the increasing demand for certain IT skills this is interesting. The survey finds that satisfaction with total salary compensation hasn’t really changed very much since last year, although 18 percent were more satisfied than last year, compared to 12 percent in 2019.

About 20 percent of respondents claim they are not satisfied with their compensation, which is similar to last year’s 19 percent figure. The most notable changes are in age group, with older workers (45+) reporting higher levels of satisfaction. That said, the highest percentage of IT professionals that were more satisfied than last year, is the 18-34 age bracket (21.4 percent).

When asked; “When you think about 2021, what’s your biggest career objective?”, it was interesting to note the many comments about wanting to increase base salary. One 34-year-old, Chicago-based data center manager claims that “COVID is a good excuse to not give a raise,” and as a result, he will be looking for a new position in the coming months. One 40-year-old IT worker from Franklin, Tennessee supported the idea that COVID will have an impact with increased remote working and a reduced salary as a result.

Almost certainly COVID will have had some impact on the industry but the overall picture for IT professionals is a relatively rosy one, despite the pandemic. The survey reveals an industry that, on the whole, wants to develop skills and grow its salary as a result and that is no different than in previous years. The question now, given the pandemic, is whether or not employers are prepared to match that ambition.

[ Coming up this week: detailed analyses of hiring plans, job satisfaction, and technology certifications. And – how to get your hands on the full Salary Survey 2021 data set. ]