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Skills compensation showing up in techies' paychecks

More employers are rewarding their IT workers by increasing their base pay instead of giving the traditional bonus.

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More high-tech workers are being compensated for a job well done -- and it's showing up in their paychecks, not as one-time cash bonuses.

Not that anyone squawks at bonuses, which, by the way, are also on the rise, but industry watcher David Foote says more organizations are adjusting salaries according to job skills (and not just title). And while bonuses are making a comeback after nearly vanishing during the economic recession, this kind of compensation is outpacing the traditional bonus.

"It's no secret that employers have long been using skills pay to keep their IT workers at competitive market rates," said Foote, CEO and chief research officer at Foote Partners LLC in New Canaan, Conn.

Few employers want to tackle what is not only a complicated procedure but often a politically sensitive one.
David Foote
CEOFoote Partners LLC
In fact, pay targeted specifically to noncertified and certified information technology-related skills has exploded in popularity, according to a new Foote Partners survey of 54,000 IT professionals in the US and Canada. Fifty-one percent of those surveyed are now receiving such pay in their compensation packages.

The study found that that employers prefer the salary-based tech skills pay option because it solves a thorny problem: IT job titles that are not well-matched with actual on-the-job responsibilities. This has been a serious, long-standing problem well known within the ranks of IT and human resources professionals, according to Foote.

"What has happened is that serious worker morale and retention issues have exploded in thousands of companies where surveyed salaries, matched to workers' job titles, are clearly out of whack with the work the employee is actually doing," Foote said.

But the process of re-classifying and re-titling IT workers is "a nightmare," Foote said. "Few employers want to tackle what is not only a complicated procedure, but often a politically sensitive one."

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A more practical solution has been to declare specific tech skills as dominant or unique to a job. The job is then priced in the usual fashion, with additional pay incorporated into the mix for the skills earlier identified as key to performing the job; the title remains unchanged.

"This solution offers a lot of advantages," Foote added. "But one of the biggest is reducing the leverage recruiters enjoy with an employer that haplessly underpays its IT workers within the boundaries of an otherwise well-functioning compensation system that has been in place for years. The problem is what we all know to be true: IT workers are different."

Let us know what you think about the story; email: Kate Evans-Correia, News Director

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