IT Pay Levels: Counting the Salaries

While the year 2000 problem is helping to boost pay for technical staff, those with out-of-date skills are seeing their incomes drop. Guy Clapperton finds out just how the figures are adding up

People think freelance writers have it easy and to an extent this is true. We can dictate our own working hours as long as we don?t break any deadlines, which we never do, dearie me, no. We can work from home if we have the space, and if we are not in total control of our tax affairs we can always employ an accountant to take care of that side of things.

It?s a great life in many ways, but there is one snag. When the freelance decides to jack it in, he or she has nothing at the end of it all. There is no com- pany, and precious little brand value ? unless anyone would care to prove that wrong and offer me a few million to write articles under the name ?Guy Clapperton?. When the last project is over, so is any residual value of my business, until I write that great screenplay or novel I?ve got this fantastic idea for. No, look, I?m going to start writing it immediately I get the time and it?s going to make me rich, I tell you (you?ve been drinking again, haven?t you? ? Ed).

Fair enough, that?s the business we sign up for and it?s understood from the word go. People who build up a company instead, people such as computer dealers, have a different life ? they are more restricted in what they can do with their time, they might go for a listing and adhere to all the reporting and other strictures that involves, and they genuinely build something that is of significant value to sell when they retire or get fed up with it, or to pass on to the family or otherwise dispose of.

This was the way people saw it 10 years ago. And in spite of mar- gin erosion and an incredibly volatile market, even now, that is the way most entrepreneurs see their lives panning out ? you can rarely believe all the rubbish about ?this is my life and I never want to change it?. Everyone has half an eye on that retirement cottage in the country and good luck to them. Elements of the business will depreciate, particularly the technology, but mostly you can be certain of a given return at the end of it all.

That is, until some of the intangibles start depreciating, and that is what is happening, according to a report published by London-based research organisation Corps Business. Unless you are a multimedia specialist, your salary expectations are sinking below par, and this is particularly true of older staff, it says. This will hit trainers and it will hit graphics artists if they choose to remain on the staff rather than freelance (the project-by-project approach is still paying nicely, says the report in its sole cheerful facet).

OK, so they asked a load of people whether they considered they were paid enough and they said ?no?. PC Dealer responded by asking a load of people in the trade whether they thought they were underpaying their staff, and they also said ?no?, thus winning the prize for the Most Obvious Response to the Daftest Question of 1997. But if your staff?s skill set is depreciating that must be a worry and it?s worth finding out whether it?s true.

Reaction in the channel is distinctly mixed. Harry Thuillier, chairman of reseller Fraser Associates, suggests the report?s authors should think again. ?It?s absolute nonsense,? he says. ?There will always be fashionable sectors and they will always be able to claim higher salaries, but there is no reason to single out multimedia in particular.?

Technical people, in vivid contrast with the report, are very well-paid, considers Thuillier. If they are in training there appears to be some room for debate about that (see box). Corps Business maintains that its figures came from a profile drawn from different types of job, regional differences, ages between 21 and 50, varying levels of experience and both sexes. Which sounds pretty comprehensive, really.

Nevertheless, real-life experiences continue to clash with the report?s findings. Scott Wakefield, marketing director of connectivity specialist ECS, is the first to admit his company knows nothing about the end-user?s side of the salary scale, although he suspects his staff are paid more than his customers, but he is unaware of any great disparity between what people want and what they get. ?It?s always a compromise between throwing so much money at someone that you can?t get the value out of them, and keeping the best people,? he says.

Corps Business stands by its figures as an overall trend. A representative says that although there will be variations in different market sectors, the researchers spoke to 6,000 people spread across 1,000 companies. These companies included small bureaux as well as large corporates, and there was no bias towards any sort of organisation in particular. The figures, in short, do need to be taken seriously.

Even so, Simon Haigh, managing director of Ascot-based reseller Debug, queries the age factor in Corps? findings. ?I don?t think salaries have anything to do with age. Experience, certainly, and skill-set, but where are people getting their expectations about what they should earn? People?s expectations surely ought to be set by the market rate.?

You could almost start running away with the idea that IT pay is settled by negotiation, just the same as it is in any other field. Although as Martin Prescott, managing director of Big Red Computers, points out, a large part of the problem could be that people think they are working in another area. ?The thing is, some of the production people look at the sales guys and think they should be earning as much as that. But the sales people are on very low basic wages and a lot of commission and they work damned hard for it.?

In fact, the Corps representative was unable to say where the respondents got their expectations from. One figure quoted is #40,000 per annum for a staff trainer, and where this comes from is anybody?s guess. If the employers are offering only #25,000 there?s an argument that says it might not be the boss who is out of kilter.

Overall, when analysing the research in depth, you can?t help but conclude that there?s no one in business who doesn?t aim higher than the figure they are actually earning if they have any oomph about them at all. IT is only feeling the pinch because of the changes it encompasses in so short a time.

The fact is that resellers and bureaux are finding it as hard to keep up with the technology as anyone else is, but hey, at least there are dividends to be earned in the upgrade busi-ness when the technology shifts. The problem is that as people get older they are less inclined to learn all this new and whizzy stuff, indeed the ability to learn new tricks will inevitably diminish as the ageing process continues.

This is a tricky one because humans are not immortal and we do have our own built-in obsolescence, which is when we start thinking about that cottage in the country, spending more time on the allotment and window shopping for carpet slippers. Computers are different in that they upgrade rather than die, so what was a complex task just over half a decade ago ? say, maintaining a graphical user interface, is taken as read at the moment. A lot of what was done by specialists, for example low-level DTP for a small newsletter that might have gone to a bureau, can be done more or less by a word processor ? whose spell checker won?t even recognise the word ?Quark? ? by now. People who have not kept pace have found their skills pretty much irrelevant.

Put it another way ? and this is going to sound trite but it?s exactly what?s happening ? computers are putting people out of work. It sounds Luddite, but the very people who were criticised for making their colleagues redundant when automation first started becoming a serious issue in business, are now finding the same thing is happening to them. Add to their increased needs the onset of middle age and their children growing up and you begin to perceive quite a serious problem.

Nevertheless, tight though the problem can be, it has nothing to do with the business. It isn?t your employer?s fault that you?ve decided to have your fourth kid and take on a new mortgage instead of having the snip and moving into a tent; it?s your responsibility to think it through.

Even then, Pres- cott is inclined to try to take likely personal circumstances into account when setting senior managers? salaries, but only so that he can get the best people. The only answer if you feel your pay performance is lacking is to continue to adapt and change, and to try to make some leverage out of your experience. Although given that, computers are designed to hold lots of data and can end up a lot more ?experienced? than people and with a lot more accuracy in their memories. And the risk that graduates will have more up-to-date knowledge than an older person who has started coasting is considerable.

And the bottom line is, er, the bottom line. A company?s mission is to make a profit for its shareholders and that means keeping overheads low, at least in the short term. ?It?s supply and demand, end of quote,? says Thuillier, remaining resolutely unconvinced that the low salary syndrome is actually happening.

?Salaries are going up because employment is low, so we have to pay to get the best people,? he says. Which makes sound economic sense.

And if the going rate for the best people in the steady environment of IT support and training is less than the going rate for a sales-driven staffer on a pittance plus huge commissions, that is the way the economics of the situation has always panned out.

Economics is undoubtedly the key to what is happening. Haigh confirms that although salaries don?t look depressed to him, they aren?t shooting up as they have done in the past ? and given the unprecedentedly long period of low inflation in the UK, plus the end of the recession, maybe that?s not such a surprise.

Stepping back from the IT sector for a moment, to reflect on public sector pay freezes and commercial short-term contracts replacing more secure employment, leads you to the same conclusion.

strike the woes

It is instructive to note that although the survey highlights people?s salary woes, it doesn?t actually ask how many people get other benefits like health cover or a company pension where they might not have done before.

Some manufacturers have a reputation for laying their production staff off during the summer months when demand slackens off.

Once again, the report makes no mention of job security, just cold, hard cash. Some people will trade off the actual amounts involved for their security, and these are the ones likely to end up away from the high-risk, high-reward area of commission only.

Prescott sums it up the best, perhaps, when he says: ?To be honest, I have to pay blood to get good staff. My salary bill is higher than any other overhead.? He has tried advertising production and technical management jobs on lower pay specs than those he pays currently and has simply been rewarded by inferior applicants ? always.

But it must be happening somewhere. Research organisations don?t make their figures up, any more than journalists make their facts up, so whether or not their sampling reflects the trend in the trade itself, the diminishing returns effect is out there somewhere.

It can only be hoped that the people offering these low salaries will find a way of not getting monkeys in response to the peanuts they are offering. Let?s face it, if you employ monkeys your name is going to go downhill, and that is the point at which the value of your carefully nurtured retirement nest-egg starts depreciating. Dramatically.

A Load of Old Cobolers

Not everyone with apparently dated skills is suffering a low pay deal. Cobol programmers in particular are in demand with the year 2000 crisis now starting to look really quite uncomfortably close.

Companies that have yet to do anything about bringing their systems up to date and readying themselves for the millennium are having to pay about double the figure that the same programmer would have cost them only a couple of years ago, and the ratio will increase dramatically as businesses realise that they won?t survive unless their IT is fixed.

But if there were ever a classic case for making hay while the sun shines, the Cobol community is it. If they are in demand for year 2000 fixes, and they will stay in demand while any bugs early in the next century are turned around, then it doesn?t take a particularly incisive intellect to work out that by 2001 they are going to be back where they were 10 years ago.

Figure it out

Corps Business figures show that the differential between the money expected and the money on offer is felt most acutely at the top of the tree, with lower-paid technical staff, for example, earning more than they had believed possible. The gap between what top trainers would want per annum compared with what they are actually offered is a serious cause for concern.