Salary Survey 2002

For this, the Fourth Annual Canadian Channel Salary Survey, Channel Business magazine teamed with PRC to provide the IT channel with a comprehensive picture of salary and employee satisfaction trends for 2002. With the ongoing challenges in the IT industry, it is critically important for everyone in the channel to have current, accurate information about compensation trends. Given the tough economic climate for IT, it should come as no surprise that the median salary for the Canadian IT channel dropped 3 per cent to $48,600.

Exhibit 1: Key Statistics

Dollars and Cents

In 2002, the median salary for the Canadian IT channel dropped $1,400 to $48,600. Given that the average age and experience of respondents has stayed the same since last year, it would have been expected that salaries would have at least remained stable. Interestingly, only 14 per cent of respondents indicated that their salary had actually decreased since last year. The other 86 per cent was evenly divided between no change in salary and an increase. The decrease in the median salary is more likely due to a change in the mix of respondents than an actual decrease in salaries for the channel.

Exhibit 2: Median Salary by Job Category

Marketing positions ranked as the second-highest paying job category, with a median salary of $55,000. Sales positions and the "Other" category were the losers this year. In 2002, the median sales salary dropped from $10,000 to just $40,000. This decrease in the sales category does not include any changes to commission income. It would be expected that those companies with higher profit margins are able to pay higher salaries overall, and this research reinforces that concept. Systems Integrators had the highest median salary at $65,000, up $10,000 from last year. Consultants fared much worse than expected, with a median of only $50,000. Clearly consulting is not nearly as lucrative as it was in the dotcom boom. The very lean operations of VARs and distributors translated into the lowest median salaries in the industry at $42,000. The razor thin profit margins of these operations translated into a loss of $10,500 of median salary, erasing the gains made in 2001.

Beyond Salary

Unfortunately the tough economic environment the channel has endured over the past year has taken its toll on non-salary compensation. The percentage of respondents receiving commissions dropped to just 36 per cent of the total from 58 per cent last year. The median value of commissions was $22,500. The percentage of the job category that received a commission was highest for Sales at 73 per cent. However, the average commission for Sales-related positions was only $31,000, which was much lower than the average for senior managers (average $62,000) and marketing ($40,000). The reduced buying activity in the IT sector has clearly impacted total Sales compensation.

Employee Satisfaction

2002 was a tough year for the entire IT channel. Profits were down, the value of stock options collapsed, and layoffs flooded the market with well-qualified IT workers. These facts are not lost on employees. The word that seems to best define their feelings is cranky. Employees are feeling overworked and under-appreciated. Most metrics of employee satisfaction have fallen in 2002. Morale and quality of management were the only areas to show improvement, and the gains there were very minor. Respondents felt less secure in their jobs this year compared to last. As layoffs have begun to seem endless, and the pool of qualified unemployed IT workers grows, those that remain have felt more and more uneasy. The percentage of respondents who felt secure in their job dropped to 83 per cent, down from 93 per cent in 2001. The layoffs, mergers and cutbacks in the IT industry have loaded more work on those that remain, and employees are feeling the strain. Three out of every four of respondents felt that they worked too many hours. Morale was a key issue of contention again this year, as 31 per cent of respondents indicated this was a point of dissatisfaction. This is only a slight improvement from last year. Given the increased workload and decreased compensation, it is not surprising that respondents are unhappy. Respondents’ opinions of the quality of management did improve somewhat from last year, however 30 per cent still raised this as an issue. The most critical issue that was raised in this year’s survey was fairness of compensation. Last year, 69 per cent of respondents claimed that they were satisfied with their monetary compensation. This year, only 63 per cent felt they were fairly compensated. Considering that only 41 per cent of respondents received a raise over the past year, this decrease in satisfaction is understandable.