Enterprise System Spectator blog: ERP and enterprise system vendor evaluation, selection, and implementation.

The Enterprise System Spectator

Monday, January 07, 2019

Why Are Median Salaries Falling for Some IT Job Positions?

Over at Computer Economics, we've just released our new IT Salary Report for 2019, and there are some findings that are a bit counter-intuitive.

For example, in a time of low unemployment and a strong economy, you would think IT salaries would be strongly rising across the board. But that is not the case. Although across all IT jobs, salaries are rising at the median, for some job positions, the national average salaries are actually falling.

As we write in a Research Byte for the new report. 
Another factor we are seeing is that the salaries of new hires are decreasing. This usually does not happen in a strong economy. However, many IT workers are migrating from high-cost-of-living cities to places such as Nevada, Idaho, Oregon, Colorado, North Carolina, and Florida, where they usually earn a lower salary but enjoy a much-lower cost of living. Many employers have also been moving their operations to these same low-cost areas. In terms of real dollars, salaries might not be increasing as quickly, but workers are still seeing benefits.

“National medians are useful for determining the general direction of the economy or hiring, however this year, more than ever, it is best to look at salaries at a regional level,” said Tom Dunlap, director of research for Computer Economics, based in Irvine, Calif. “As major cities vie to attract employers looking to take advantage of lower costs and new supplies of talent, salaries will be in flux.”  
In economic analysis, one of the mistakes people make is to fail to recognize the rational decisions that individuals and organizations make in response to incentives (or disincentives). There is no doubt that the cost of living--and the cost of doing business--in some parts of the U.S. have gotten ridiculous. Think of the San Francisco Bay Area, for example.

As housing prices, and office space lease rates go through the roof, what are the logical choices? For both individuals and companies, it is to relocate to cheaper metropolitan areas--whether it be across the Bay, or out of state to Nevada or Texas. 

The option of remote work has made this choice much easier. Over the past decade, an increasing percentage of the IT workforce has been working remotely, whether telecommuting a few days a week, or moving out-of-state altogether.

It used to be that relocation meant turnover. Today, not as much so. For strong performers, employers are often willing to let them relocate and work remotely. The business keeps a strong performer, and the employee sees his or her salary go farther. Or, organizations may relocate to a more cost-effective location and allow many of their employees stay put.

Ultimately, salaries find their natural level, and that's what we think is going on right now for some IT positions.

The salary trends introduction to our IT salary report is available at no charge on our website. It also comes with a sample of our salary tables.

Labels: ,


by Frank Scavo, 1/07/2019 11:09:00 AM | permalink | e-mail this!

 Reader Comments:

At tech meetups in Seattle I run into a lot of recent graduates with BA degrees who have enlisted in software development boot camps. Most target to trophy jobs at big tech: Web Development, Data Science and Machine Learning. Alas, I know many can't find a job in these specialist skilled areas--they inquire if I know of any jobs. I hear that some turn their new skills toward a wider IT job market, perhaps holding median IT salaries down. Galvanize is good bootcamp (https://www.galvanize.com/). There are many others.
 

Post a Comment

Powered by Blogger

(c) 2002-2018, Frank Scavo.

Independent analysis of issues and trends in enterprise applications software and the strengths, weaknesses, advantages, and disadvantages of the vendors that provide them.

About the Enterprise System Spectator.

Frank Scavo Send tips, rumors, gossip, and feedback to Frank Scavo, at .

I'm interested in hearing about best practices, lessons learned, horror stories, and case studies of success or failure.

Selecting a new enterprise system can be a difficult decision. My consulting firm, Strativa, offers assistance that is independent and unbiased. For information on how we can help your organization make and carry out these decisions, write to me.

My IT research firm, Computer Economics provides metrics for IT management, such as IT spending and staffing benchmarks, technology adoption and investment trends, IT management best practices, IT salaries, outsourcing statistics, and more.


Go to latest postings


Search the Spectator!
Join over 1,700 subscribers on the Spectator email list!
Max. 1-2 times/month.
Easy one-click to unsubscribe anytime.

Follow me on Twitter
My RSS feed RSS News Feed

Computer Economics
IT Spending Ratios by Industry and Company Size
IT Spending as a Percentage of Revenue by Industry, Company Size, and Region
Outsourcing Statistics
IT Spending and Staffing Benchmarks
IT Staffing Ratios
IT Management Best Practices
Worldwide Technology Trends
IT Salary Report


Awards

2014 Best Independent ERP Blog - Winner 2013 Best ERP Writer - Winner Constant Contact 2010 All Star Technobabble Top 100 Analyst Blogs


Key References
Strativa: Business strategy consulting, strategic planning
Strativa: IT strategy consulting
Strativa: Business process improvement, process mapping, consultants
Strativa: IT due diligence
Strativa: ERP software selection consulting and vendor evaluation
Strativa: CRM software selection consulting and vendor evaluation
Strativa: Project management consulting, change management
StreetWolf: Digital creative studio specializing in web, mobile and social applications
Enterprise IT News: diginomica


Spectator Archives
May 2002
June 2002
July 2002
August 2002
September 2002
October 2002
November 2002
December 2002
January 2003
February 2003
March 2003
April 2003
May 2003
June 2003
July 2003
August 2003
September 2003
October 2003
November 2003
December 2003
January 2004
February 2004
March 2004
April 2004
May 2004
June 2004
July 2004
August 2004
September 2004
October 2004
November 2004
December 2004
January 2005
February 2005
March 2005
April 2005
May 2005
June 2005
July 2005
August 2005
September 2005
October 2005
November 2005
December 2005
January 2006
February 2006
March 2006
April 2006
May 2006
June 2006
July 2006
August 2006
September 2006
October 2006
November 2006
December 2006
January 2007
February 2007
March 2007
April 2007
May 2007
June 2007
July 2007
August 2007
September 2007
October 2007
November 2007
December 2007
January 2008
February 2008
March 2008
April 2008
May 2008
June 2008
July 2008
August 2008
September 2008
October 2008
November 2008
December 2008
January 2009
February 2009
March 2009
April 2009
May 2009
June 2009
July 2009
August 2009
September 2009
October 2009
November 2009
December 2009
January 2010
February 2010
March 2010
April 2010
June 2010
July 2010
August 2010
September 2010
October 2010
November 2010
December 2010
January 2011
February 2011
March 2011
April 2011
May 2011
July 2011
August 2011
September 2011
October 2011
November 2011
December 2011
January 2012
February 2012
March 2012
April 2012
May 2012
June 2012
July 2012
September 2012
October 2012
December 2012
January 2013
February 2013
March 2013
May 2013
June 2013
July 2013
September 2013
October 2013
December 2013
January 2014
February 2014
March 2014
April 2014
May 2014
June 2014
July 2014
August 2014
September 2014
October 2014
November 2014
December 2014
February 2015
March 2015
April 2015
May 2015
June 2015
July 2015
September 2015
October 2015
November 2015
February 2016
May 2016
June 2016
July 2016
August 2016
September 2016
October 2016
January 2017
February 2017
May 2017
June 2017
October 2017
January 2018
April 2018
May 2018
January 2019
February 2019
Latest postings