Despite recent mass tech job cuts and a gloomy economic backdrop, an InformationWeek study found that companies were increasing pay and that workers were overwhelmingly confident with their job security.
Since a pandemic-inflated tech bubble burst last year and caused companies to shed thousands of jobs, it appeared the industry might be stuck in a rut. Fears of a global recession, inflationary pressure and geopolitical strife seemed to be hanging around for the foreseeable future. A true recession has not materialized, the most recent numbers show inflation easing, and the issues plaguing the global supply chain are steadily improving as COVID-19’s global grip loosens.
The 2023 US IT Salary Report paints a more optimistic picture, while still showing concern about rising labor costs and cutbacks. Pay is increasing, but so is the US cost of living. More than three-quarters of IT professionals said their base salaries rose in 2022 — with the median salary for IT pros in the US increasing from $125,000 in 2021 to $140,000 in 2022, an increase of 12%.
Concerns about generative AI and its potential to disrupt some jobs within the tech sector did show up — with a majority of respondents saying they want training on new technologies.
Count Jim Dubois, former Microsoft CIO and author, as one of the optimists. “The tech sector has rebounded well recently,” he tells InformationWeek. “Despite the cutback by companies and many layoffs — the majority of the positions eliminated were new positions that were never filled. This closed the gap significantly between tech workers and the number of tech workers companies want to hire, but there are still more jobs in total than workers.”
Of potential workforce displacement due to generative AI, DuBois says there is “growing optimism that the grunt parts of tech jobs will go away with generative AI, while more human innovation is still needed.”
Tech’s Gender Pay Gap Closing
The report also shows companies making strides in pay differences between men and women. Women’s annual salaries rose 28% in 2022 to a median of $135,000. Men’s salaries increased 9% over the same period to $140,000. These numbers show the tech industry is faring better than the overall job market, which shows a more consistent pay gap in recent years, according to Pew Research Center.
There’s also hope that this trend of salary growth will continue, but at a slower rate. Janco’s IT Jobs Report paints a mixed IT job market picture, with 44,900 fewer jobs in the first two months of 2023, even as 145,000 jobs remain unfilled because of a tech talent shortage.
“Many CIOs’ 2023 IT budgets planned to increase salaries for IT pros to address the inflationary pressures faced by employees are now being reviewed,” Janco CEO M. Victor Janulatis said in a press release. “We believe that median salaries for IT pros in 2023 will be 3% to 4% salary above 2022 levels, not the 7% to 8% that was budgeted.
On the other hand, research firm Gartner says 44% of CIOs and tech leaders plan to use increases in base salary as a hiring incentive and 40% say they will offer other incentives and sign-on bonuses.
InformationWeek surveyed 456 information technology professionals employed full time in the US. The report is available to download for free.