IT wages bounce back from three year decline

Domestic IT wages in Europe and the US have finally rebounded from three years of consecutive decline and increasing pressure from offshoring, according to new research.

The Hot Technical Skills and Certification Pay Index, by US-based Foote Partners, shows an average increase across certified and non-certified IT skills wages in the US and Europe of between one and four per cent last year.

Foote Partners co-founder, president and chief research officer David Foote said: "At this time last year the skills pay numbers were terrible. But one year later the pendulum has swung to the other side. And because of a growth spike in the last quarter of 2004, we expect to see continued positive numbers in the first half of 2005 and probably thereafter."

Pay across the 88 non-certified skills grew nearly one per cent in 2004 following an eight per cent decline in 2003, and that still represents a net drop of 18 per cent over the last three years.

The highest-paying non-certified skills include project-level security, voice over IP, Oracle database and applications, IBM Websphere and Microsoft .Net.

Those that have significantly lost value over the last two years include Siebel, Perl, ActiveX and Windows XP.

Overall average pay for 62 certified skills grew nearly four per cent in 2004, following a 5.6 per cent decline in 2003, which represents a four per cent net loss over three years.

The highest paying skills in this category are the Certified Information Systems Security Professional and a range of Cisco certifications. Ones that have lost value include beginner certifications, Siebel and GIAC.

Last year's survey showed that offshore outsourcing was forcing domestic IT wages down but this year's figures suggest the research also suggests many firms are now thinking twice about sending work overseas.

"IT decision-makers have lately become somewhat less inclined to play the offshoring or outsourcing card when under pressure. Offshore outsourcing has proven to be far riskier and tougher to succeed than had been anticipated, in part due to employee retention issues, especially when workers tasked with knowledge transfer and vendor management are involved," said Foote.

The quarterly research is based on surveys of 46,000 IT workers across North America and Europe.