Assessing Your IT Compensation Structure
Top tech talent understands that their skills are in high demand, and they’re seeking salaries that align with those abilities. The competitive nature of hiring IT talent makes it critical to fully understand what compensation the market demands before extending an offer. Do you know if the salaries you’re providing are up to par? If you’re not sure, it’s time to reassess your IT compensation structure and ensure that your organization is offering both the salary and benefits necessary to attract and retain the top technology talent you need.
Why IT Salaries are Increasing
As the importance of technology grows far beyond the tech sector, IT job openings are becoming harder to fill, and the supply of skilled candidates hasn’t kept pace. This trend is positioned to continue, as employment for computer and IT occupations is projected to rise 13% between 2016 and 2026, faster than the average for all occupations. If these projections are realized, the Bureau of Labor Statistics states that this would result in more than 550,000 new jobs. As early as 2020, 1.4 million open computing and engineering positions will need to be filled. The addition of these new jobs, combined with the existing and projected IT talent shortage, will likely make it even more difficult to fill tech openings.
As organizations struggle to fill their open IT positions, salaries have risen. Because tech professionals have so much opportunity, pay has risen across IT fields at a rapid rate. According to a recent Dice survey, the average technology salary in the United States was $96,370 in 2016, a 7.7% increase from 2015. This far outpaces the rate of inflation, demonstrating the deep need companies are feeling to secure top IT professionals. For any business looking to hire in tech, it’s crucial to evaluate your IT compensation structure and determine if the salaries and benefits you offer will meet candidate expectations.
The Importance of Finding and Meeting Market Rates
Putting together a competitive tech compensation package starts with determining the market rates in your area for the roles you’re seeking to fill. Resources like salary.com and payscale.com make it easy to research the average salaries. While each professional is different and compensation can fluctuate with experience and education levels, looking up the average in your city is a good place to start.
Why is it so important to know the market? Because an offer that isn’t competitive encourages candidates to join a different company. A low offer says that your business is out of touch and doesn’t know what top talent is worth. One survey revealed that 35% of workers say the salary is the most important factor in accepting a new job. While salary isn’t everything, it does tell a candidate that you’re serious about hiring them and value their skills.
Your IT compensation structure can also have a large influence on retention. If raises fail to keep up with rising salaries, current employees are incentivized to search for other opportunities. The cost of hiring new employees can be staggering, so it’s worthwhile to keep up with rising rates in order to retain your best people.
Other Perks Matter
Though compensation is important, it is not the only factor in a candidate’s decision to accept or reject your offer. In fact, nearly 60% of respondents in a recent Glassdoor survey reported that perks and benefits are strongly considered before making a decision. Top technology professionals are looking for a great internal culture and companies with values that match their own, as well as opportunities for development and training to further their careers.
One of the benefits that routinely tops lists is flexibility. When given the choice between a high-paying job and a lower-paying one with better benefits, 88% of workers surveyed said flexible hours would make them consider the lower-paying job. In the tech world specifically, 63% of IT pros said they’d take a 10% or more pay cut to be able to work from home half of the time. Compensation is clearly a significant part of a candidate’s decision, but these other perks can help your organization compete if your IT compensation structure isn’t able to keep up with rising tech salaries.
Assessing Your IT Compensation Structure
For companies who aren’t yet ready to sign on full-time specialized talent for highly competitive salaries, consultants can be an effective way to fill immediate needs and get critical projects done. As you evaluate how your organization can secure the best talent within your budget, consider partnering with a staffing firm that understands the market. A true talent partner can provide deep industry knowledge and connections to assist you in determining the right salary to offer or in securing the right consultant to help your company continue moving towards your goals.
Do you know what it takes to hire the tech pros you need? Benchmark IT can help.