IT Salaries Stagnate Throughout 2020, Discretionary Bonuses Disappear

For the first time since the dot-com bust, IT salaries were flat in 2020. That’s according to a new survey from Janco Associates.

Middle managers in IT organizations felt the burden the most. That’s because average compensation for those positions was lower than in prior years.

Janco interviewed more than 100 CIOs in the last several weeks for its January 2021 IT Salary Survey. Victor Janulaitis is Janco’s CEO.

Janco’s Victor Janulaitis

“The one factor that stood out the most was the reduction or flat out elimination of discretionary bonuses,” he said. “That added to the fact that SMBs, where most IT pros have positions, were the most adversely affected by the shutdowns. That drove many companies to manage costs by limiting hiring and salary increases.”

On the bright side, there’s been a uptick in development activities associated with initiatives supporting work from home telecomputing and related mobile applications. That could be the spark that drives any growth in salaries and hiring in the near term.

However, IT pro salaries will remain flat for at least the first and second quarters of 2021, Janulaitis said.

Hiring Put on Hold

“In a series of conference calls with C-level executives, we found that hiring of many positions at all levels of IT management was put on hold,” Janulaitis said.

Most companies are only hiring key replacements and those that support development activities mandated by executives.

Major findings of the survey are:

• For the most part, companies all but eliminated bonuses.
• Salary increases in 2020 were minimal at best.
• Between January 2020 and January 2021, the total mean compensation for all IT pros increased from $94,535 to $94,609, or just .08%.
• Employers limited salary increases to 1% or less.

CIOs are now less optimistic about the direction their organizations are moving, Janulaitis said. And they’re cautiously managing budgets, salaries and staffing.

“They are waiting to see what the impact of the vaccines will be on the overall economic picture,” he said. “CIOs are not very optimistic that the economy will continue to improve.”