IT Pay Creeps Up After Two-Year Downward Spiral

IT staffing executives predict pay for permanent and contract workers will increase as companies undertake infrastructure and application development projects they had put on hold during the recession.

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Mon, May 09, 2011

CIO — After two years of pay cuts and stagnating wages, IT salaries are once again on the rise, driven by demand for contract and permanent IT staff, according to IT staffing industry executives.

Alisia Genzler, vice president of Technisource's northeast region, said her company began to see demand for permanent IT professionals pick up in mid-2010. The need for permanent IT staff has remained steady every since.

"We are seeing more and more requisitions for [IT labor]," she says. "Over the last four to six weeks, the number has increased 30 percent. That's quite a bit."

Genzler and Joel Capperella, vice president with Yoh, both report an increase in the number of contractors who are transitioning into permanent, full-time positions with their clients who now have enough money in their budgets to hire permanent staff.

Meanwhile, Jack Cullen, CEO of Modis, sees the opposite happening. He reports that some IT workers are leaving full-time, permanent positions to become contractors. Those IT professionals want to capitalize on the number of contract opportunities in the marketplace as employers devote a larger portion of their workforces to contingent labor. They also want to cash in on the pay premiums that contingent IT staff are commanding these days.

Whether contractors are moving into permanent positions or IT staff are leaving permanent jobs to become contractors, staffing executives agree that it all indicates the same thing: that IT job opportunities are once again blossoming.

Factors Driving IT Hiring

IT departments are hiring more aggressively for the first time since the start of the recession for a variety of reasons. Chief among them, corporations feel comfortable spending some of the cash reserves they built up during two years of aggressive cost-cutting, says Capperella. That comfort with spending money comes despite rising oil prices and flagging consumer confidence.

Indeed, companies see IT investments as a way to hedge against economic uncertainty. John Baschab, senior vice president of management services with Technisource, stated in a previous CIO.com article that companies are investing in capital projects aimed at automation to lower their rising labor costs. Baschab's colleague Genzler notes the same trend: "By developing certain applications, they can do away with another function that's being done manually," she says.

IT departments are also hiring permanent and contract staff to work on infrastructure upgrades that they had avoided during the recession. "A lot of companies had put infrastructure projects on hold," says Genzler. "You can only hold on so long before you have to roll out new PCs or move to Windows 7."

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