We are living in a time of great prosperity for information technology (IT) job roles. It is amazing to me the salaries that some IT professionals command. In this age of easy access to industry salary information, what is really the best way to get a realistic picture of how much you can and should expect to earn in your next technology job?
What are the factors that bump up the salary of given roles? Is salary determined by education, experience, professional certifications or credentials, or is it just whatever the market will bear?
When it comes to gauging expectations correctly, what advice applies best for IT newcomers — those with one-to-three years of professional experience — versus IT journeymen — those who have four-to-10 years of professional experience — versus IT veterans — those whose professional experience exceeds 10 years.
A word about the current job market
I’ll caveat this entire article right here and tell you that, with IT workers more scarce than they have ever been, the supply and demand curve has flipped — and salaries have skyrocketed. It’s not uncommon right now for workers to ask for between $10,000 and $20,000 more than what’s being offered and receive it.
I personally don’t think it will be too long before the flipped curve flips back, and salaries become more properly ranged again. If you stand to make a score while salaries are high, then bear in mind that hiring your potential replacement could be dramatically cheaper if things switch back.
From where I sit, I really think people need to keep their salary ambitions in check.
Where (and how) to compare
That said, where is the best place to scout out a salary range for your desired role? You can look on salary.com — or other similar sites — but I recommend that job seekers look at the way employers judge salary for their roles.
Salary range is the range of pay established by employers to pay to employees performing a particular job or function. The range is ultimately set by employers but quite often strongly influence by the job market. A typical salary range generally has a minimum pay rate, a maximum pay rate, and a series of mid-range opportunities for pay increases.
The salary range for a given position is determined by market pay rates, often established through market pay studies, for people doing similar work in similar industries in the same region of the country. If you really want to get a leg up on competition and price yourself exactly in the range, ask your friendly HR representative what guide or service they use for market salary research.
Pay rates and salary ranges are also set up by individual employers and recognize the level of education, knowledge, skill, and experience needed to perform a given job. These ranges include modest increases for people already employed, but may provide huge bumps for incoming workers.
Many companies participate in salary market surveys to create a trustworthy resource for salary research. More and more often, salary research is occurring online using salary calculators. You can find and use one of those yourself.
A salary range is also affected by additional demographics and market factors. These factors include the number of people available to perform a specific job in the employer’s region, competition for employees who have the needed skills and education, and overall availability of jobs.
Where you are looking geographically has a strong effect on salary. Be aware of the region where you are looking and fine tune your salary request accordingly. You want to hit the sweet spot where demand is in your favor without pricing yourself out of the market.
Same job, different employers
Job descriptions can be particularly important for comparisons but are usually harder to find. Determine whether you are competitive with similar positions with organizations that have a similar size, sales volume, and market share. If you can find companies in the same industry, especially in your area or region, that is another good comparison source.
Look at other companies, milk your professional network, and ask your friends. Recently, the economic reality is that employers may have had to hire good people for more money than in the past. A lot more. In the near future, companies may have an easier time hiring skilled people once again. The market will always have its ups and downs.
This overall economic reality is constantly changing, and this affects the economic realities of salaries for employers and employees. I don’t see the current massive demand letting up soon, but it is still wise to rein in your expectations relative to the market, so as not outprice yourself later on. If you are overpaid, it will eventually come back to haunt you.
Get a raise
When it comes to salary increases and how they relate to salary ranges, I think there are two legit routes for getting the right range for your skill set. If you are sniffing around for a raise from your current employer, then I am a huge fan of gaining certifications and adding to your formal schooling (get an MBA, for example).
If you simply want to move up the salary ladder where you already work, then your formal training and certifications should move the needle. Refer to coworkers, colleagues, and your professional network to get a realistic idea of how much of a bump you can ask for based on certifications gained, formal training, and so forth.
If you are moving to a different employer and seeking a raise, then your professional experience will be valued more than certifications, et al., but those extracurricular qualifications won’t hurt you.
Also bear in mind how highly your particular skills are (or are not) valued. For example, growth in the data and software development sectors has been crazy. If you have a hotly demanded skillset, then It’s simple and appropriate to ask for more pay than the market has offered in the past.
What stage of your career are you at?
How far along you have come in your career of choice makes a difference when considering what your salary should be. This also impacts how to ask (and what to ask for) if you are looking to move up the salary ladder.
For new-to-market IT folks, I recommend gauging your salary requirements from a website like the aforementioned salary.com, interviewing a few recruiters in your area, and then being open during the interviews with potential employers. Ask them what their range is and don’t be greedy when you are going out for your first job.
You may, in fact, have to take a bit less in order to settle into a long-term career with your target company. For intermediate or journeymen technology individuals, I recommend doing peer interviews, either in your network or through LinkedIn.
I think a few years under your belt definitely earns you a bit more compensation but you don’t want to grow faster that the market or your peers. Pay attention to what the market is offering and what your peers are getting paid.
For seasoned vets, I recommend approaching compensation a bit more holistically and tempering it with PTO and other forms of compensation like LTIE (Long Term Incentive Plans) and company perks like a car allowance or expense account.
Whatever your level of experience, you will almost always be well advised — even in this market at this day and time — to keep your expectations in check. Always pay attention to when you are getting close to pricing yourself out of the market. I wish you the best of luck getting paid as richly as you deserve to be.