Paychecks Up Slightly in OS/400 Shops

Despite the continuing difficulties in the U.S. economy, salaries for managers and programmers at OS/400 shops continued to rise, according to the latest salary survey performed by Nate Viall & Associates. Compared to this time last year, average salaries, which includes normal pay plus bonuses, are up at OS/400 shops as companies try to hold on to their best employees with raises and have let go of their least-experienced staff.

According to Viall’s spring 2004 survey, released late last week, the average salary for an IT manager, across all titles and geographies, was up 4.4 percent, to $89,200, from the same period in 2003. The average salary for a VP/CIO, the top-level manager at big OS/400 shops, was $137,400, with MIS directors getting $106,400 and data processing managers getting $71,900. Viall says that the response rate for the surveys was a bit higher for VPs and CIOs than usual this time around, and when adjusting the data for a more typical mix, salaries across all managers were only up an average of 3.3 percent. Salaries for operations managers were down 0.5 percent from this time last year, and most salary increases within various titles ranged from 2 to 4 percent.

On the programmer side of the OS/400 shop, salary increases over the past 12 months across all programmers and analysts were up 2.9 percent, to $60,000, says Viall, the first time the average salary has crossed the $60,000 threshhold. Within the various programmer/analyst titles and experience levels, salary increases ranged from 1 to 4 percent, and those with the greatest amount of experience said they saw the greatest gains in salary. The average salary of those with less than six years of experience declined a bit, and Viall says that PC support techs and system administrators only got token increases within the past year, with an average salary increase ranging from 0.5 to 2.5 percent. The average entry OS/400 programmer had a salary of $41,200, while those with nine or more years of experience averaged $66,400. Software consultants still do much better than programmers working in education and government, averaging $21,300 more in salary per year. These industries mark the high and low of programmer salary ranges, with those in financials services, manufacturing, and retail in the middle of the range, more or less.

Viall says that now is the time for managers to be very careful about their IT staff. While the economy has not been great, and salaries have been growing more or less along at a multiple of one or two times with the consumer price index (which hovers around 1.5 to 1.7 percent these days), economies move in cycles, and the current easy trends will not persist forever. When the economy rebounds, some managers, who have not done an assessment of who their best people are, and how well or poorly they are being taken care of, may find their top programmers, who may already be vested for retirement or pension funds, get poached. Viall warns that these experienced programmers are the ones recruiters are going to come for first. “A lot of people are going to get caught short, and they may not realize how bad the situation is until they have lost their second top programmer.”

That said, Viall’s survey indicates that companies who had salary freezes in 2002 and 2003 are lifting them in 2004. Internal promotions are on the rise in OS/400 shops, and newbie programmers and analysts are getting less money than they did a number of years ago. The lower salaries for the newbies are paying for the raises for the experienced staff.

Viall sells a quarterly salary subscriber service for $233. Summary versions of the salary reports based on specific regions cost as little as $24. You can order these reports directly from www.nateviall.com, under the “salary reports” button. You can also get a salary report by e-mail by sending a note to natev@compuserve.com with “free salary analysis” in the subject (be sure to include your state and fax number). Readers of this newsletter can also receive a free individual salary analysis (domestic USA salaries only) that uses multiple variables in calculating the expected midpoint and salary range.