There's more to IT than money

Supply and demand play as big a part in setting salaries as skills and experience, says Paul Glen

Over the past decade, IT industry salaries have been on a rollercoaster ride. Recent data shows a return to level ground, which makes this a good time to re-evaluate how we think about money. It seems our love affair with lucre has developed into a bit of a dysfunctional relationship. Now don’t get me wrong: I like money as much as the next person — and more is better — but I’m concerned that we may have created some misconceptions about its meaning.

As a manager and consultant, I have noticed that few issues elicit as much emotion from technical staffs as salary. For a bunch of people who typically eschew emotion, we can get really worked up about money. I’ve seen more tears and screaming about it than about any other managerial issue.

It’s not that we’re starving — few fully employed people in the IT industry could qualify as the working poor.

So what’s it all about?

The problem is that we’ve allowed money to become wrapped up with a number of other issues. We use it as a tangible symbol for other intangible values. Some of those include:

  • Status. We use money as an indicator of social status. As herd animals, we really like to know where we stand in relation to our peers, and money is one key measure.
  • Personal worth. We use money as a symbol of how much our organisations value us. The more they pay us, the more they must feel that we’re good and valuable people.
  • Progress. We expect that income over a career should continually rise. As we progress, so should our value and compensation.
  • Fairness. Most important, we use money as a gauge of the organisation’s fairness. We compare the value we deliver and expect to be reasonably compensated. We estimate the value we add compared with our peers and expect that each should be compensated according to his relative contribution.

Frequently, when technical people, uncomfortable with squishy emotional things, feel undervalued, unloved, abused or unfairly treated, they complain about money. It’s the safe, concrete way to express what they don’t like. It’s easy to say, “Bob does a worse job than I do but is paid better. That’s not fair”. It’s hard to say “Why don’t you respect me and my contribution as much as you do Bob’s?” But they are really the same thing.

That’s where the problem comes in — money’s not really about any of those things.

In aggregate, how much we get paid is not a function of our moral worth but of supply and demand. The ups and downs of salary numbers are based less on the value we deliver to the organisation and more on the fluctuations of the market for people with our talents.

During the boom years of the ‘90s, I hired young college graduates at salaries in excess of twice the average income for a family of four in the US. When they asked me for career advice, I’d always tell them the same thing: “Save your money”. And they would look at me as if I was speaking a foreign language.

“You don’t get paid this much because you’re morally superior to the janitor”, I’d say.

I’d tell them it’s just a matter of supply and demand, and at some point, things will change. Don’t build a lifestyle around the assumption that you will always make more. In fact, I’d say, “If you think about it, if the company had to lose one person, a young programmer or the janitor, who do you think we’d miss first?”

As the market for technical skills continues to globalise, we need to get clear about what money really means. And perhaps more important, we need to get better at expressing our feelings about worth and values and fairness separately from the symbol to which we’ve grown so accustomed.

Glen is the author of Leading Geeks. He can be contacted at

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