Meagre rise in Canadian IT salaries despite “talent shortage” reports

Related article: Hot skills that get you ahead of the game in Canada’s IT jobs market

Despite persistent reports of an IT talent shortage, salaries in the technology sector, in 2008, posted only a very modest increase over last year.


Although salaries in the IT sector hovered around two per cent above the local cost of living index, compensation across the industry rose a mere 3.6 per cent, according the 2008 IT Job Market & Salary Survey released by ITWorld Canada.

Average base salary in 2008 is $77,883, up from $75,415 of the previous year, according to the survey.

Companies with 5,000 or more employees dolled out an estimated salary increase of 2.85 per cent.

The increases for other types of businesses are:

  • 1,000 to 4,999 employees – 3.12 per cent;
  • 500 to 999 workers – 3.74 per cent;
  • 100 to 499 employees – 3.61 per cent; and,
  • Less than 100 – around 4.4 per cent.

The annual poll conducted by IT World Canada queried 3,246 full-time IT professionals from across the country. That number included 1,200 folk in management positions with hiring responsibilities.

Those polled were asked for their opinions on compensation, job satisfaction, job security and job hunting activities. Managers were questioned about hiring expectations and skills requirements. The margin for error is +/-1.7 percentage points.

View the free summary findings. Or gain deeper insight into the job market by ordering the 2008 IT Job Market & Salary Survey here.

Find out what your skills are worth with our salary calculator.

The study noted that average age of the current IT workforce is 43 and “many more are on their way to retirement than those who are in the early years of their career.”

Because of the increased use of information and communications technologies in many industries, and the increasing – though unfulfilled – demand for IT professionals the report noted that: “The situation remains a dangerous one for the industry.”

It said hiring plans for 2008 would require a five per cent increase in the current IT workforce, but at the same time labeled this an “unlikely occurrence” because over the past five years the industry attracted less than seven per cent of its current population.

Yet such oft-repeated warnings of a severe IT talent shortage have been challenged by readers. Many claim companies have created the crunch themselves by setting their hiring expectations too high.

The IT skills shortage is not across the board, but rather skills- and region- specific, according to Mark Schrutt, research manager for outsourcing services at analyst firm IDC Canada in Toronto.

He said there is a large IT talent pool, but some skills are in more demand than others. “That is why you don’t see much of a salary increase across the board.”

For example, while the survey indicated the base salary for companies with less than 100 employees is $66,896, on average, a project manager with mid-level experience – which is in very high demand these days – can command at least $90,000.

A project manager with senior level experience can look forward to about 20 per cent more, said Schrutt.

Apart from project managers, companies are also looking for candidates with expertise in business analysis, systems analysis, and security technologies.

Schrutt said the Greater Toronto Area, Alberta and British Columbia remain the hot hiring regions of the country. (The IT World Canada survey says Calgary is leading the country in average compensation and average increase in salaries).

Yet another expert notes that right now higher-end expertise is in demand, but not an urgent need.

“In the next few years we’ll see a shortage of higher-end expertise and leadership as the baby boomers retire, but that concern isn’t immediate,” said Jen Perrier-Knox, senior research analyst at Info-Tech Research Group in London, Ont.

“The big hot skills area is in business intelligence (BI) technologies,” she said. “It requires a strong understanding of data management and tools that allow business users to retrieve and analyze data,”

Companies are also scrambling to find employees who are familiar with legacy code, Perrier-Know said.

The IT World Canada survey also revealed a difference in hiring priorities among various types of organizations.

For instance, while the computer industry is hiring a greater number of application developers, organizations such as banks, retailers and manufacturers firms are more focused on finding project management, business analyst and architecture skills.

As the number and complexity of applications increase, the survey said, the need for technical support and help staff also goes up.

While hiring managers did mention this area as a particular challenge, it is a job that has seen tremendous growth in recent years, the survey said.

Overall, the Canadian IT workforce appears to be stable and secure as employees report an average of 10 year tenure with the employer.

“Still the likelihood of losing staff remains with half of the respondents reporting there is either actively searching for a new job (8 per cent) or are open to opportunities (43 per cent),” the survey said.

Share on LinkedIn Share with Google+