E-Commerce Drives Soaring Salaries and Bonuses - IT professionals - Industry Trend or Event

ENT, August 18, 1999 by Joseph McKendrick

When it comes to increasing earnings and opportunities in the IT field, it's not who you know but what you know. Companies with Windows NT that are engaged in e-commerce initiatives are paying top dollar bonuses to employees with e-commerce know-how. Similarly, while many companies have eased off on ERP implementations - mainly due to a Year 2000 lockdown - IT employees focused on ERP projects continue to rake in the bucks.

This year's ENT salary survey confirms that the more directly an IT professional supports a company's frontline business, the greater the rewards. The survey, conducted in late spring, includes results from 108 companies running Windows NT systems.

IT professionals "are in demand if they have business experience, especially since IT is now looked upon to help drive business," says David Pollard, director of recruiting at Keane Inc. (www.keane.com), an IT services firm. "Skills that help businesses to expand rapidly - networking, e-commerce and Web development - are very much in demand and very much in short supply," agrees Maria Schafer, research director with analyst firm Meta Group (www.metagroup.com).

The ENT survey finds that the average premium placed on ERP systems developers or managers is more than 9 percent. MCSE certification is worth another 7.5 percent on the average, with e-commerce skills upping a salary an additional 7.4 percent. Employers are also willing to pay more than 6 percent above average for data warehousing development skills. Year 2000 work fetches premiums of close to 5 percent above the average as well.

At this point, however, Y2K is a wild card. Analysts are divided on its continued impact on salaries. Year 2000 issues continue to drain resources, Schafer finds, but with the bulk of Year 2000 work completed, there has been some relief in the overheated IT job market, Pollard says. With less Year 2000 work there has been more "softness in the marketplace, with a bit of a supply that we haven't seen for more than three years," he observes.

As a result, the torrid growth of IT salary levels over the last few years has flattened, Pollard says. The ENT survey confirms a slowdown in the salary growth of analysts and programmers, except at sites with cutting- edge initiatives, such as e-commerce, ERP and data warehousing. Also, network administrator salary levels have grown in the double-digit range, reflecting a growing reliance on network infrastructure by all segments of business. Database administrator and management-level salaries also continue on an upward path.

The bonuses at companies employed in e-commerce initiatives are alluring. An IT manager can command a base salary of up to $82,000 at the high end, which jumps to $87,000 at companies with e-commerce projects.

Add the average bonus of 12 percent for an IT manager at an e-commerce company - compared with 7 percent overall - and annual compensation jumps to more than $97,000 a year. Likewise, systems analysts at e-commerce sites have a median salary of $58,500, or about 10 percent higher than the average. With a 9 percent average bonus - compared with 6 percent in general - total compensation climbs to almost $64,000 annually. Senior programmer/analysts at e-commerce sites enjoy a median salary of $56,000 - a 12 percent premium over the average of all categories - along with an 8 percent bonus.

"Everything around e-business is exploding - Java and HTML on the front- end, Oracle on the back-end," Pollard says. The ENT survey finds that developers working in Java environments are seeing increased compensation. These professionals report average bonuses of about 10 percent, with salary ranges peaking at $75,000 at the high end.

Developers in Oracle environments also fared well, with annual base salaries as high as $67,000 - well above the norm. Overall bonuses for programmers and programmer/analysts averaged between 5 percent and 7 percent.

The e-commerce explosion is consuming talent that may be finished with Y2K projects, Pollard adds. "I don't think there's a major metropolitan area in America that is not going through extreme growth with IT," he says. "Because IT is so pervasive. Every major Fortune 1,000 company is a major player with IT."

Fueling the demand is the fact that "there aren't a lot of e-commerce packages available," Metagroup's Schafer adds. "Developing these applications requires talent, and there's just not enough out there. Companies still need to develop these systems themselves. That requires talent that's now in short supply." Expertise in data warehousing and mining are also drawing top dollar, says Marty Aronow, executive vice president of U.S. operations at IMI Systems Inc. (www.imisys.com), an IT consulting firm. Larger salaries and bonuses are going to IT professionals who help companies develop "a customer-centric focus around the Internet," Aronow says. "Amassing customer information and being able to access that information is going to be critical for growing a business in the new millennium."