© 2005 Johanna Rothman. This article was originally published on Computerworld.com
There's some good news in this year's salary survey. Salaries are up (a little), bonuses are up (a little) and the effects of layoffs, hiring freezes and outsourcing are all down — a little. And training budgets look as if they may be coming back a bit. If you're like me, these small gains are something to be happy about. We're not back in the boom times of the late '90s, when, if you could spell computer, you were qualified to be a developer or a tester or, even worse, a manager. And between the slight increases in hiring and training and the decrease in layoffs, the current jobs may be more interesting to employees and more valuable to employers.
If you review the areas of greatest increases, you'll see that employers are paying more for people who know about security. Employers do pay more for people with a greater span of technical skills, and security (as well as performance and reliability) is a functional skill whose time has come. (And no, I have no idea how long this will last, but as long as we continue to gather ever more personal data, we will need more people to think about and implement good security.)
Some of you may be thinking, “Oh nuts, just a 3% raise. That's not much.” You're right. That 3% is lagging the national average for the fourth year in a row. But here's a little perspective. According to EconEdLink.org, annual inflation rates in 2002, 2003 and 2004 were 1.6%, 2.3% and 2.7%, respectively. If you received a 3% raise for your 2004 work, you beat inflation. Not by much, but beating inflation is better than seeing your spending power decrease. And if you received a bonus, your wages did increase.
So my next question is, Are relatively flat salaries normal? The answer, of course, is, It depends. Salaries are dependent on people adding value to their companies to rev up innovation. And salaries are dependent on employers considering areas of innovation. Whenever you have innovation, salaries (eventually) rise. Salary increases across the industry are a lagging indicator of a disruptive change. Local salary increases are a lagging indicator of an organization performing well, relative to its competitors.
If you're doing the same old, same old, don't expect an increase in salary. Be more concerned that your organization will cut costs in some way.
And, of course, the size of salary increases isn't the only cause for concern in the survey results. Although people are feeling more secure in their jobs, I'm worried about the emotional cost of that feeling of security. More people are trying to do more work with fewer employees, something that's been going on for a few years. And even though the percentage of respondents who said they found their jobs stressful was lower this year (47%) than it was last year (52%), that's still a lot of people feeling stressed.
If innovation is key to improved revenue, which is the key to higher salaries, people need time to think. And if they're trying to do the work of more than one person, they don't have the time.
Money is a funny thing when it comes to morale. If you're underpaid (compared with your organization and industry), your morale will suffer until you find a new job with a competitive salary. But if you feel you're paid fairly, money doesn't motivate you as much as it could. What does motivate people is the respect of their peers and their manager and a good relationship with their manager.
When I look at the percentages of respondents who said they were significantly affected by budget cuts (50%), layoffs (31%) and hiring freezes (30%), I see people who find it challenging to develop collegial relationships with peers and managers. That situation may make it difficult to appeal to people's intrinsic motivation to perform great work.
So I have some suggestions. Whether you're a manager or a technical contributor, take a long, hard look at your work. First, make sure all the work you do is required by the organization. Too often, we continue to perform work that's no longer needed — or at least no longer needed to be performed by us.
Second, ask yourself if you're doing work that's fundamentally the same work you did last year. If so, what kinds of additional technical skills would you need to acquire to change how you do the work? Work with your manager to develop an action plan to see how to increase your technical skills so you can perform work of more value to the organization.
Third, remember that innovation arises from all of us. If you have an idea about how the work could be done better or an idea about a new project that could be undertaken, make sure you raise those ideas, no matter where you are in the organization.
The good news about the salary survey is that there's no bad news. It's up to us to move out of the doldrums in our organizations and create our new futures. Take a little time and think strategically about your work. You'll see how to work differently and create more value for the organization. Once you do, your salary will rise. And that will be great news.
Like this article? See the other articles. Or, look at my workshops, so you can see how to use advice like this where you work.