The tech sector is a thrilling one to be a part of, especially in Midwestern cities such as Detroit. However, all the growth, activity, and information that comes along with it can form a confusing climate when it comes to compensation. As a result, it’s increasingly important that businesses hiring tech talent and tech pros evaluating their next job offer take the time to discover and adapt to accurate IT salary market rates.
Many companies are on a constant mission to lower costs, and rightfully so. After all, a business cannot operate for long if it’s overpaying for supplies, services, or in this case, its workforce. However, this mindset can derail IT hiring efforts. As companies attempt to lower their bill rates for tech talent, they find added difficulty landing the cybersecurity expert, data analyst, or app developer they need to take their vision into reality.
When organizations offer bill rates under the market rate, it’s often because those controlling budgets fail to see that it’s a candidate market in tech. With a current unemployment rate of 2.1%, there are very few tech pros actively seeking work. If a company’s desired bill rates don’t match market rates for specific IT roles, candidates will simply accept a more accurate offer elsewhere. Tech pros, especially younger generations such as Millennials and Gen Z, simply have too many options to settle for lower than the market rate.
Unrealistic bill rates are intertwined with two distinct frustrations. Firstly, there may be a lack of knowledge of what market rates currently are. This sometimes happens in organizations that do not hire often and may not realize their turnover results from subpar bill rate increases. Secondly, and perhaps more commonly, an IT hiring manager understands how much demand there is for tech skill sets but has trouble getting budgetary approval from those outside the IT department. Both frustrations can be alleviated through a stronger understanding of tech salaries and communication across the organization.
Tech employers aren’t the only ones struggling with accurate salaries in the marketplace. Inaccurate compensation expectations by IT professionals is a problem that can stunt career growth. Today’s news cycle is flooded with reports detailing the stark skills shortage in IT. While it’s certainly more difficult to hire an IT pro in 2018, this persistent headline often inflates what a professional believes they should or can receive in salary. It’s great to be well-paid, but when expectations exceed what is realistic – the market rate – it causes issues.
Consider the case where an IT pro interviews for a position that could take them to the next level of their career only to reject an offer that they believe should be 20% higher. This mentality can create a negative pattern, causing a tech pro to push away excellent tech positions until a company is willing to overpay (which can call that employer’s decision-making into question) or until they settle for a market-rate role (which means career progress was delayed). Tech job seekers possess vital skill sets so they should be paid handsomely, but not to the extent it creates a dangerous imbalance that is hard to maintain.
In order to get on the same page and bridge the knowledge gap, IT hiring managers and tech pros seek out the same information. While it’s easy to find multiple articles online that cherry-pick only the most eye-catching salaries, locating accurate market rates is more difficult. After all, compensation varies according to which skills are most in-demand and the location of the position. Salaries in Michigan or Illinois are different than those in New York or California, which is where many popular articles draw salary information from.
Discovering a detailed and up-to-date IT salary guide for your area is the key. For example, the market rate for a mid-level Java Developer in Michigan is $82,488 compared to one in California earning $98,784 per year. It is also important to look at the skill level of each position when determining an appropriate salary. A Database Administrator at the senior-level makes $117,312, while a mid-level Database Administrator makes an average of $69,362. Plus, it’s important to understand that the skills most in-demand, such as mobile, big data, and cybersecurity, mean market rates for those positions can fluctuate more severely than others.
The IT landscape in 2018 is different from that of even one year ago, and salaries reflect that. For businesses seeking tech talent, even accidentally lowballing candidates can add speedbumps that delay organizational goal achievement. And for tech pros, being unsure of what constitutes a solid compensation offer only serves to place speed bumps on the road to career success.