Salary forecast: Your 2004 raise revealed!

Canadian IT workers can expect a slight increase in pay as employers explore alternative forms of compensation, a labour market expert told a Canadian Advanced Technology Alliance event Thursday.

According to an annual survey conducted by the Calgary-based HR consulting firm Wynford Group, some 88 per cent of high-tech firms will also offer short-term incentives on top of the 3.20 per cent base salary raise forecast for 2004. Employees can also expect to see more selective distribution of stock options this year and expanded use of employee share ownership plans, Wynford Group president Gail Evans told the CATA seminar, which was intended to provide an outlook for the sector’s health in 2004.

The Wynford survey looks at more than 160 positions in 24 job categories including Internet, database management, disaster recovery, project management, ERP and software development. Evans said about 54 per cent of those surveyed said they saw their business growing, 32 per cent didn’t see a change and only about 11 per cent predicted a decline. The data indicates enterprises are formulating strategies and are sticking to them, she said.

“”We’re seeing more resiliency. People are becoming used to uncertainty,”” Evans said. “”I guess that’s a positive skill.””

The top HR priorities for the firms surveyed include attracting and retaining workers, developing leaders and establishing more goal-based performance management processes, Evans said. Compensation for meeting those goals may include educational subsidies, employee referral bonuses, retention and signing bonuses as well as rewards for project completion. Employees who participated in the survey articulated a need for more work/life balance, a demand that employers are starting to notice, Evans said.

“”We have a lot more people who don’t want to work five days a week,”” she said. “”They’ve got other things they’d like to do with their time.””

The Wynford survey also includes an analysis of hot job skills like Internet development, database work, networking-related expertise and enterprise integration experience. The best opportunities to hone those skills is in software companies, according to Natan Aronshtam, a partner with Deloitte & Touche in Toronto. Based on the data gathered through its annual Fast 50 survey of Canadian high-tech achievers, Aronshtam said application development remains strong even over life sciences, which is growing faster outside of Canada.

“”If you’re working in software, you’re growing faster and bigger than anyone else,”” he said, adding that Canada made a new record this year when it logged 14 per cent of the companies ranked in the global Deloitte & Touche Fast 500 survey.

Although much of the IT industry has been historically concentrated in Ontario, Aronshtam said that’s changing. Fast 50 results from 1998 showed 71 per cent of firms based in Ontario, but now it’s more like 30 per cent, he said. British Columbia, meanwhile, has picked up from nine per cent six years ago to 30 per cent. Quebec’s R&D incentives have also helped increase its share of the high-tech employee base.

Canadian IT firms see proprietary technology and unique products as the biggest contributors to their growth, Aronshtam, said, and their biggest priorities are centered around increasing their sales and marketing capabilities and expanding geographically.

In most cases, more than half of the Fast 50 firms’ revenue comes from outside Canada, which is why so many in the industry are closely watching the fluctuating U.S. economy. Peter Drake, deputy chief economist at TD Bank Financial Group, said the rising Canadian dollar may have hurt exports, but to some extent that was offset by a rise in commodity prices. TD is forecasting a 4.4 per cent fourth quarter change over last year in the computer and electronics sector, according to Drake, which makes it second only to the utilities sector.

Drake admitted that economists often get their forecasts wrong, and that his profession a whole would have looked a lot smarter if they’d been able to predict the impact of SARS, the Ontario blackout and incidents of Mad Cow disease. “”We could do all sorts of scenarios, but the more scenarios you do, the less useful you become,”” he said.

Comment: info@itbusiness.ca

Illustration by Jarrett Osbourne

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