Kiwi IT pay rates falling shocker

Pay rates for many New Zealand IT workers seem to be falling, following a trend in the US.

Pay rates for many New Zealand IT workers seem to be falling, following a trend in the US.

The Information Technology Association of America (ITAA) 2001 compensation survey suggests compensation for IT executives is on the way down, with small falls also reported for mid- and junior-level IT professionals.

The figures were collected in the northern spring, well before September 11 and the further softening of the US economy, so pay rates may have since fallen further.

US recruitment agencies confirm the general downward trend, telling Computerworld US that many IT manager job vacancies are now paying up to 10% less than last year as jobs become increasingly scarce.

Comparable New Zealand figures have yet to show a decline but recruitment agencies say “the silly money has gone” as strong supply couples with slow demand.

Enterprise's Barry O’Brien says demand for staff is significantly reduced “right across the board”, mirroring a corresponding increase in candidates. Contractors are also failing to find contracts, he says, so they are flooding the permanent market and taking “a helluva lot less” less than top contract rates.

O’Brien says many people have lowered their asking salaries by as much as $10,000, so a very senior Java person who would have earned into six figures will have cut back to $90,000 to $100,000. Jobs in the support side are also particularly scarce and wage expectations are being cut back accordingly, he says. The trend is set to continue because of the uncertainty created by September 11 delaying projects, he says.

Protocol Personnal managing director Megan Fletcher says firms no longer have to pay “top dollar” but doesn't see wages coming down. "I see them staying at normal rates."

Firms desperate for staff would pay above-usual incomes but most firms don’t have to any more, she says. Desktop support staff with six or seven years' experience are now accepting $40,000 to $45,000 when they may have earned $55,000 in their last jobs.

Similarly, desktop staff with two or three years' experience earning $35,000 to $40,000 would have been offered $50,000 to $60,000 to move on, but now $40,000 to $45,000 is more normal.

“The silly money has gone,” Fletcher says.

Woodbine recruitment consultants says it has no authoritative salary figures but says firms are becoming more picky and increasingly reluctant to pay high salaries. “They are getting a better fit of skills and companies are happy to keep jobs open,” says Auckland-based consultant Don Smith.

Wellington-based Kevin McBride of McBride HR releases the annual Cubiks Salary Survey later this month. He will only say that due to the laws of supply and demand “starting rates may be going down”, though this doesn’t mean pay rates for individuals who are employed are decreasing, he says.

The ITAA survey suggests that total cash compensation for chief executives in US technology companies declined from $US409,600 to $US350,000 in the year to March.

Total cash compensation for information chiefs decreased from $US203,500 to $US192,100.

Senior project managers' median total cash compensation fell from $US91,500 last year to $90,000 this year and senior software systems engineers saw their median rates fall from $US70,000 to $US69,100.

However, application systems professionals saw their median total cash compensation increase from $US91,800 to $US105,100 and LAN administrators saw their median total cash compensation increase to $US54,200 from $US51,300, the ITAA survey reported.

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