IT employment is still soaring, and so are bonuses

Not everybody in IT gets a bonus, but growing numbers of IT pros do, and those lucky folks will have a very nice chunk of change in their year-end pay stubs. Bonus payouts through the industry averaged $8,769 last year, and with IT unemployment at historically low levels, it’s likely that bonuses will climb even higher this year.

Bonuses aren’t handed out because employers want to be sure Bob Crathchit and Tiny Tim have a great Christmas; they’re a tool to attract and keep the best workers. The unemployment rate for technology professionals dropped in the third quarter to 3.3 percent, versus 4.2 percent in the same quarter a year ago, according to the U.S. Bureau of Labor Statistics, and companies have been scrambling for talent for more than a year.

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Indeed, IT workers in the red-hot Silicon Valley job market already do better than the rest of the nation, with bonuses averaging just under $12,500, according to a survey by Dice, one of the largest IT-oriented job boards. Not only are bonuses in Silicon Valley larger than average, more people get them: 38 percent versus the national average of about 33 percent.

We won’t know the actual size of year-end bonuses until early 2013, but employees surveyed by Dice are optimistic; 37 percent say they expect those payouts to be larger, and only 18 percent figure they’ll shrink.

For bonuses, experience counts

The tech industry loves to think of itself as a meritocracy, but the Dice report casts a bit of doubt on that assumption, at least when it comes to bonuses. Time in the field is a key factor in determining who gets a bonus. “The key threshold appears to be six years of experience. After that milestone, more than 50 percent of tech professionals told us they are bonus-eligible,” says Alice Hill, Dice’s managing director.

Of course, another way to get a bonus can be to jump ship. Dice’s survey shows that 16 percent of tech pros expecting a bigger bonus versus last year believe switching companies was primarily responsible for the hike.

IT hiring is strong — for contractors, too Hiring in IT has been remarkably strong, even as the rest of the economy struggles to keep unemployment under 8 percent. At the beginning of November, Dice listed 86,731 job postings in IT, compared to 81,680 a year ago. Listings for nearly every month of the last 12 months have been for 80,000 or more jobs. Those aren’t all new positions; with tech unemployment so low, it’s likely employers are taking a significant amount of time to fill vacant slots.

The Dice survey highlights another important tech employment trend: the growth of contract positions. Of the jobs listed this month, 52,870 are full-time, permanent positions, while 37,169 are contract jobs. More than 17,000 jobs were added in technology consulting during the third quarter of 2012. Through September, that category has had more than 56,000 new positions. “Ten straight quarters of job gains for technology consultants is no small feat. On-demand talent continues to be a dominant theme in this recovery,” Hill says.

The tech skills in highest demand What are employers seeking in their tech openings? Open source programming skills are greatly desired. Python and Ruby have hit all-time peaks in six of the 10 months in 2012. JBoss is also on the list with nearly 2,000 job postings on any given day, up 10 percent year over year. Linux job postings reached their highest levels yet this month with 12,110.

Job listings for programmers who can develop for Android are up about one-third since last year, and jobs related to virtualization are up like never before. In fact, mobile skills as a whole are in high demand. But few, if any, areas are as hot as the cloud. As of August, there were 10,771 jobs in six categories that Dice deems cloud-related, compared to 8,217 the year before, an increase of 31 percent.

Several executives I spoke with also highlighted a demand for a relatively new skill called devops. Devops joins development and operations teams to shrink development time, save costs, and eliminate conflicts between developed projects and operational integration; it lets developers self-provision more, so IT setup doesn’t become a barrier. In December 2011, there were 1,349 Dice postings for devops positions; by September 2012, there were 1,429.

At the same time, there appears to be some slippage in employment for traditional system administrators. In the second quarter, the unemployment rate for the category the Bureau of Labor Statistics calls network and computer systems administrators was 4.7 percent, compared to 3.6 percent for computer professionals as a whole at that time.

Murshed Chowdhury, CEO of staffing company Infusive Solutions, continues to have clients looking for sys admins and believes the position will remain relevant for the foreseeable future. But “once this transition [cloud migration] is solidified, it is likely that the number of open positions for systems admins will decrease. Any of these professionals who can successfully adapt to cloud technologies and virtualization will be the best positioned to thrive in future IT markets,” he says.

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