Subscribe
About

IT salaries deflated by inflation

While respondents report increases of up to 15%, the average salary figures show a slow growth rate that fails to outstrip inflation.
Ranka Jovanovic
By Ranka Jovanovic, Editorial Director
Johannesburg, 07 May 2003

<B>Increase trends</B>

* Up to 40% of respondents at strategic management level did not receive a salary increase in the previous 12 months.
* Nearly 30% of all respondents did not receive a salary increase in the previous 12 months.
* The average increase ranges between 5% and 15%.

Slow salary growth is to be expected after the IT boom, although most IT professionals hope that their salaries will at least keep up with inflation.

However, the news is generally bad: male respondents to the survey reported an average salary only 2.8% higher than last year - R22 090 as compared to R21 492.

[CHART]While females in absolute terms lag behind, they fared slightly better in terms of salary growth, reporting an average salary at 4.8% higher than last year`s female sample.

There were few surprises when we analysed average salaries for the entire sample of 2 977 respondents. In fact, many of the findings mirrored last year`s results as we looked at how factors such as age, gender, race, experience, qualification, or working hours impact salaries.

[CHART]When it comes to age and experience, the findings follow last year`s pattern. Again, those in the 46 to 50 age group are at the top of their earning potential, although the average for this age group is now lower - at R30 624 compared to last year`s R31 722. For the youngest age group - the under 20s - the average has improved by R400 since last year.

Technikon diploma-holders in the sample earn less than those with matric (mid-R17 000s and R20 000 respectively). Apart from this anomaly, salaries and scales in general match higher qualifications, with PhDs earning close to R30 000 a month.

[CHART]Management salaries depend on the company size and grow correspondingly, but a look at the entire sample shows similar salary levels - around R21 000 - at both ends of the scale. In fact, people working for the smallest of outfits with less than 10 staff earn slightly higher salaries than those employed by the largest of corporates with over 5 000 employees.

While a large percentage of IT workers put in long hours, there is a strong "return to normality" trend, with nearly one-third working a "normal" eight hours a day.

[CHART]The flat growth rate is clearly evident when looking at how salary depends on the length of the working day - just as last year, those who work over 10 hours are on average earning slightly more than R26 000 a month.

The heavy racial imbalance of the sample results in a similar disparity in salaries earned by different racial groups. However, IT skills recruitment specialist Janette Cumming, director of Paracon, says we should expect a major shift in this ratio in the next three to five years.

[CHART]"The low number of PDIs [previously disadvantaged individuals] in top management results in lower averages, but this is not a cause for concern, since many are currently still working their way up the ranks," she says.

Consulting retains its top position as the top payer, while education remains at the bottom. The IT sector proper stays in its middle-of-the-road position, with an increase of 2.4% when compared to last year`s average.

Salary raise not guaranteed

[CHART]In today`s harsh economic climate, companies seem to have settled on linking salary increases to performance to ensure a win-win situation - it benefits the employee and the company.

At the strategic management level, 62% have such a link, while 12% of respondents` increases are guaranteed to beat inflation and 27% have a combination of the two factors.

[CHART]The picture is similar at operational management level - 58% of increases are linked to performance and 13% are guaranteed to beat inflation, while 29% enjoy a combination of the two.

A reasonably high percentage of non-managerial staff (57%) also have their increases linked to performance, but only 6% of them have increases guaranteed to beat inflation, and 37% have a combination of the two.

[CHART]Clearly companies are enforcing performance appraisals quite rigorously - up to 40% of participants at strategic management level and up to 30% overall did not receive a salary increase in the previous 12 months. This reinforces the message that increases are no longer necessarily guaranteed.

For those who did get an increase, the range was in most cases between 5% and 15%, although nearly 13% reported hefty increases of 20% or more.

"It`s interesting to note that a significant number of the respondents reported fairly high annual increases, scattered throughout the year," comments Paracon director Janette Cumming. "We have been seeing salaries staying static or people getting relatively low increases - 4% to 8% at best. Increases of over 10% are highly unusual."

Share