Europe leads the US on IT salaries, Australia now comparable

Stan Beer
Monday, 22 October 2007 10:04

IT People - Enterprise

The top five highest paying countries for IT managers are in the Western European region, ahead of the US, which is sixth best payer, according to a new global survey.

The 2007 IT Pay around the world survey from global HR consultant Mercer shows that Switzerland, Denmark, Belgium, UK and Ireland are the best payers and, with Germany in seventh place, Europe dominates the IT pay scales stakes.

Mercer’s 2007 IT Pay around the World survey compared the total annual cash compensation and total remuneration information for IT staff in 6,545 companies in 35 different countries. Multinational companies use the survey to benchmark salaries, bonuses, and other forms of pay, and to allocate global IT budgets.

The good news for Australian workers is that they now don't have to necessarily leave home to get paid well. Australia is now in the top 10 behind 8th placed Canada and 9th placed Hong Kong.

“Australia, which is facing a growing skills shortage of IT professionals, has seen IT salaries increasing steadily in recent years, and it is now comparable with other major Western countries,” Mr Ken Gilbert, Head of Human Capital at Mercer, said.










IT Manager: 10 top-paying countries (various currencies)

                             Local             USD           EUR       GBP
1    Switzerland    176,920        140,960    110,990  74,150
2    Denmark          722,310        123,080     96,890   64,750
3    Belgium            95,380         121,170      95,380   63,760
4    UK                    62,180         118,190      93,090   62,180
5    Ireland              85,200         108,230      85,200   56,950
6    US                   107,500        107,500      84,650   56,550
7    Germany          84,020         106,730      84,020   56,160
8    Canada            106,000         93,860      73,870   49,370
9    Hong Kong       702,720         90,340      71,120   47,530
10  Australia           115,480         88,850      69,950   46,740

Average total cash compensation includes base pay and annual bonus.

Foreign exchange conversions were made as of November 2006.

In the United States, the average IT manager earns US$107,500 a year compared with Canada (8) at US$106,000. By comparison, Indian IT managers earn an average of US$25,000.

According to Mr Gilbert, the disparities between the top and bottom countries reflect the globalisation of the IT workforce.

“The more senior, strategic roles are remaining in head offices, while many of the lower-end roles can be outsourced to offshore locations.  Although, while the pay in these offshore locations may seem low, they are often quite competitive in the local market, and also in part reflect cost of living differentials geographically,” Mr Gilbert said.

“This reflects a lack of hierarchy in western IT functions. In these countries, companies need to be more creative to attract staff. There is more focus on variable factors to attract staff, such as bonus schemes, while in lower-paying countries, the emphasis remains on cash compensation.

“This reiterates our message to all employers, and in this case particularly in the IT sector, that simply throwing money at the problem of attraction and retention of staff is not necessarily the best solution. 

“Employers simply have to become more strategic with how they attract, and retain, key staff to win the war for talent that clearly crosses geographical boundaries,” he said.

Mr David Conroy, a principal in Mercer’s London office, said, “The globalisation of the IT function continues to develop. Companies in Europe and the US continue to be more imaginative in their remuneration strategies to ensure that they keep the best talent. Employers understand local markets and look to developing successful staff attraction and retention strategies to remain competitive.”