IT Salaries Jump, But Firms Hold Back on Hiring

Data Center people

IT salaries moved upward during the first half of 2017, with the median salary increasing from $82,775 to $87,175.

However, hiring is slowing and salaries are set to stagnate during the second half of the year, according to Janco Associates’ 2017 Mid-Year IT Salary Survey. IT salaries year over year have risen a little more than 5.3 percent.

IT Hiring and SalariesAbout 6,500 new IT jobs will be created each month in 2017, resulting in about 77,200 new domestic IT jobs. In March, Janco said the U.S. IT job market was expected to add 125,000 new jobs this year, at least double the number added last year.

“The recent election initially created a positive outlook for job growth in general and information technology in particular,” said Victor Janulaitis, Janco’s CEO. “However, the ‘drama’ associated with the conflicts between the president, the media and the Democratic party are eliminating the probabilities for implementation of the president’s policies. This in turn is causing companies to hold back.”

Over the long term, compensation for IT executives has fared better in large companies than midsize companies, Janco said. The biggest increases have been at the middle-manager levels in midsize companies, with an increase of almost 6.7 percent — most of which can be attributed to performance bonuses and the hiring of significantly more qualified individuals earlier.

In the first two quarters of 2017, middle-management positions in IT organizations of SMBs had the biggest demand for new hires. Companies were gearing up their internal U.S.-based IT organizations, pushing IT salaries up by almost 6.7 percent, from $80,792 in June 2016 to $83,964 in June 2017.

The 2017 IT job market started with a bang, but since has slowed. Janco predicts it will grow at about the same amount as last year, when 71,500 new IT jobs were added. IT salary growth will be almost nonexistent for the remainder of the year.

Positions in highest demand are associated with security, training, large data-center management, big data, distributed/mobile system project management, quality control, BYOD implementation, capacity planning and service-level improvement.

Median CIO tenure has risen by a month to 4 years and 6 months as fewer CIOs moved on to new positions. In addition, retirements of baby boomers seem to have peaked last year.

“CIOs interviewed after the election and post-election processes were optimistic that there will be more incentives for increased IT spending and hiring,” Janulaitis said. “It seems the tide has turned and they now feel there will be little chance for improved growth in IT budgets for the remainder of this year. Hiring prospects are poor at best, especially with the higher salary levels due to the overall increase in IT salaries at the end of last year.”

Onshore outsourcing and H-1B visa jobs have peaked. The America First campaign has resulted in more infrastructure functions being moved in-house, Janco said.

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