Raises for IT workers lag behind CPI

By Bernie Monegain
10:08 AM

IT workers hoping to improve their standard of living in 2012 will not likely find relief through annual salary raises, according to a new report from Computer Economics.

Computer Economics makes no mention of the healthcare IT market specifically in announcing the report – only that it covers 20 sectors. However, anecdotal evidence indicates that healthcare IT professionals remain in high demand as the nation moves to digital medical records.

The report does concede there are some skill sets in short supply: “Developers with skills in mobile app development will remain in tight supply, as will those with experience in supporting infrastructure virtualization. In the IT world, there are always skill shortages in the growth technologies, and many IT organizations have no choice but pay up for those skills or turn to service providers for in-demand expertise – and pay a premium.”

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The findings by Computer Economics are based on a fourth-quarter survey of more than 130 U.S.-based IT organizations. Although there are modest improvements in the general employment picture, the research indicates hiring by IT organizations across all sectors will remain weak in 2012, especially among large organizations, Computer Economics executives note.

The Computer Economics 2012 IT Salary Report finds that IT organizations are planning to hand out average raises of 2.8 percent this year.

Even organizations at the 75th percentile are budgeting for only a 3 percent wage increase for employees, the report states. That lags well behind the 3.4 percent rise in the Consumer Price Index for the 12-month period through November 2011.

On a positive note, most IT workers will get some measure of increase: Even organizations at the 25th percentile are increasing salaries for existing employees by 1.8 percent, which is an improvement over the no-raise policy that prevailed last year in the bottom quartile, according to the report. Still, typical raises planned for 2012 are somewhat compressed across all quartiles and show little variation by job function or level.

“If the domestic economy continues to improve, we anticipate some upward pressure on wages, however," the report's authors write. "IT organizations will need to take steps to retain key workers due to the rise in voluntary turnover rates. Voluntary turnover rate for IT organizations, after dropping to nearly 2 percent in 2010, is on track to return to normal levels in 2012. Turnover rose to 4 percent to 2011, and we anticipate it returning to the 5 percent level, which was typical during the period prior to the 2008 recession.”

The report notes that IT organizations will face demands for higher pay from some workers.

The full study projects total salary (base pay plus incentive pay) for 65 IT job functions. It estimates total salaries for 20 sectors and more than 400 metropolitan and non-metropolitan areas.

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