Contact Features Editor Paul Desmond Q&A with Deloitte & Touche partners Gerard Cunningham and Glenn James about the survey results. Salaries by the numbers - Average figures and salary figures broken down by job. Words of wisdom from professional recruiters and consultants

By Paul Desmond
Network World, 9/23/96

A few months ago, CJ Cummings quit her job at a New York publishing firm, where she was a systems analyst dealing mostly with Internet issues, to take a similar position on a contract basis in AT&T's telecommunications division.

The reason? She was offered twice her former salary.

When the contracting firm 3D Information Services, Inc. came knocking with the AT&T job offer, she knew it was a sweet deal even if it meant giving up the security of a full-time position. Technically, she's only on board at AT&T for six months, but renewals aren't exactly uncommon. And she still receives benefits, including health care and transportation reimbursement.

Would you be able to convince Cummings to stay in the face of an offer like that? Not likely, experts say, unless you've laid some significant groundwork beforehand. That entails paying heed to the things that motivate people beyond salary, things such ashaving a challenging work environment and the opportunity to grow professionally.

Well, now's the time to lay that groundwork because, as the 1996 Network World/Deloitte & Touche Salary Survey clearly indicates, salaries are on the rise for most network-related postions, meaning more of your staffers may be fielding offers similar to, if not quite as generous as, the one CJ Cummings got.

At the same time, you should see significant growth in your own salary, especially if you have the proven project management skills that end-user, outsourcing and consulting companies all covet.

That is the salary picture painted by the 291 respondents to the 1996 Network World Salary Survey, our first done in conjunction with Deloitte & Touche Consulting Group, the telcommunications consulting arm of Deloitte & Touche LLP. For this year's survey, we went after high-end readers, those companies $1 billion or more in annual gross revenue that spent more than $10 million a year on network equipment and services. We also surveyed Deloitte & Touche's client base, which is made up of similar companies. Why the high target? Because no matter what size your company is, these are the folks you're competing with for talent.

On average, respondents received a 7% salary increase this year from last and expect another 5.5% hike in '97. That far outstrips total compensation increases for civilian job sectors, which experienced an overall hike of just 2.9% for the 12 months ended in June, according to the U.S. Bureau of Labor Statistics.

''It's gotten pretty brutal, from the standpoint of what kind of increases you've got to give people,'' says Michael Prince, CIO at Burlington Coat Factory Warehouse in Burlington, N.J.

One CIO, who said he'd recently turned the corner on getting salaries in line with market reality, declined to be named for this article, saying, ''I really don't want to send an invitation to all the headhunters of the world to start calling my people.''

Our chart shows the salary breakdown by position. As you would expect, those with strategic planning and project management skills generally come out on top of the pack, whereas those with operations and liaison skills are lowest on the scale.

What gets interesting is the compensation breakdown, or how much of the total package is straight salary vs. bonuses, stock options and other incentives. More than a third of respondents (36%) say at least 11% of their total pay comes in some form other than base salary.

Jill Herrin, president of the recruitment firm J&D Resources, Inc. in Memphis, thinks even more networking types are cashing in on bonuses.

''Probably 50% to 60% of networking people are now on bonus plans, which were not commonplace even three years ago,'' he says. ''People like to think that if they do a good job, they're going to reap some rewards from the profits of the company. It's a very effective way to keep some loyalty.''

At The Prudential Insurance Co. in Roseland, N.J, all technical employees participate in an incentive-based compensation plan, according to Bill Rush, Jr., vice-president of information systems for the firm. There are three types of bonuses: one based on the employee's performance combined with the overall company performance; a bonus for extraordinary work; and a special compensation bonus delivered twice a year that goes to people with certain skills.

''Everybody knows what those skill sets are and if those people are performing at a high level, that bonus becomes available to them,'' explains Rush.

''Five years ago, it was very difficult to get anything significant in the way of bonuses. Hot technology skills were not recognized,'' he says. Upper management changed its tune when ''we started losing some very good people and said, enough's enough.''

The idea of a signing bonus also appears to be catching on. ''It's always been a practice, but we're seeing greater instance of it,'' says Frank Schoff, president of Management Recruiters, a Cedar Mountain, N.C., firm that specializes in the placement of network professionals. ''In many cases, it's used as a way to maintain the existing salary structure, but offer an initial, one-time incentive.''

John Wallin, CEO of the recruitment firm TechKnowledgE in Irvine, Calif., says such bonuses aren't outrageous sums of money, and typically come in at less than 10% of the base salary. ''But it's cash now; $5,000 now sure beats the same amount spread out over a few months.''

The trend upward in compensation isn't showing any signs of abating, according to Rick Roscitt, managing partner of the worldwide outsourcing practice of AT&T Solutions in Florham Park, N.J. ''Salaries always tend to lag a bit with market reality. I think they're catching up to the reality that it's a network-centric world,'' he says. ''I don't think we've seen a full correction yet. You can't grow talent fast enough to see a correction over the next three to five years.''

Schoff speculates that outsourcing firms such as AT&T Solutions and contract companies such as 3D Solutions that essentially resell a person's time are helping drive salaries up. ''If they can sell something at $200 per hour, they're not at all reluctant to pay $100,'' he says.

Toughest to find

''The internetworking slice of client/server is especially difficult - the whole router, hub architecting as well as the high-level problem resolution in diverse environments,'' says Rush.

Headhunters confirm such skills are in demand, and say anyone with experience in multiple protocols can expect to fare well. And nearly everyone interviewed for this article agreed the toughest people to find are those with strong project management skills, who can plan and implement end-to-end networks without getting bogged down in day-to-day firefighting.

''It's the strategic planning of the network and the approach to proactively managing it that I think is in short supply, not just putting out [requests for proposal] for cheap switches - anybody can do that,'' says Ward Keever, senior vice president of information services for Medical Center of Delaware in Wilmington.

''Rangers'' not wanted

Educating existing staffers in the technical areas most in demand is also an option, and one that can help you hold onto your best people. That's fundamental to Prudential's incentive-based compensation plan. Being clear with employees about which skills the company deems most valuable encourages education in those skills. ''We help them get the skills they need,'' Rush says, even going so far as to put some employees through consultant training, which teaches them what a professional consultant does and how they think.

Obviously, you can't afford to give everyone that kind of training, so how do you know which employees are worth the expense? ''Experience, judgment and gut-level intuition,'' says one vice-president at a major bank. ''You've got to know your person and what turns them on, which means taking the time to sit down and talk with them about employment goals.

Keever looks for four things as signs that an employee is worth that kind of investment: drive or initiative; demonstrated project management skills; technical skill set and application knowledge. ''First and foremost, we always look for the right person. You've got to be an optimistic team player. I don't need no rangers, I don't need heroes. I want team players.''

Asked how AT&T Solutions attracts talented people, Roscitt says: ''Part of it is we grow it. We have AT&T Labs. We have a very aggressive education program inside AT&T.'' But make no mistake, AT&T also goes after people from end-user organizations. ''What we tell them is the work they do can lead to significant career advancement and rotational assignments. We're not the telecom department of a bank or a finance company; we are a telecommunications company, top to bottom.''

That brings up the question of how you keep your best people when another company is trying to steal them away.

''People will come and say, so and so has offered me a couple thousand dollars more,'' recounts one IS manager, who asked not to be identified. ''In most instances, I say, 'When do you want to have your going away party?' In two or three cases, I've said I'll match the offer, but we only do this once - don't ask again. So far, with one exception, those people have stayed.''

Prudential takes a different tack, Rush says. Staffers are encouraged to talk to their managers before accepting any job offer. Managers try to stay neutral, to consider the offer tendered, look at the opportunity offered and steer the employee in the right direction. ''None of us take it as a negative'' when an employee gets another offer. ''These things happen.''

In some cases, a counteroffer is your only choice if you want to keep a key employee. As Schoff points out, that's generally not a good practice, but may be necessary for damage control. ''If you're about to lose your No. 1 engineer over $15,000 a year, and you'd have to pay that anyway in the market,'' then you make the counteroffer. ''But some of the damage has already been done. They'll say 'Why wasn't I worth 15K more last week?' It's a Catch-22.''

It's more than money

Companies that pay attention to those latter two areas stand a good chance of holding onto their best talent and withstanding a CJ Cummings-type offer.

Technology is moving so rapidly, people want to get on to the latest and greatest,'' Herrin says. ''The more state of the art your environment is, the less likely you're going to have turnover. People who are at beta test sites are hard to recruit away.''

Juli Ann Reynolds, vice president of the advanced technology practice at recruitment firm Korn/Ferry International, offers another key to keeping your best people. ''Offer mentorship and succession planning. There should be someone in the organization who's looking out for that star, making sure they're getting what they need, that they have enough power and authority to exercise their strength.''

Maintaining an exciting work environment is another oft-cited factor, and one that often comes down to effective project management. ''You've got to do a reasonable job of project management and scheduling, so people feel like their time is being used well,'' Prince says.

Keever agrees. ''The biggest problem is staying on a project till we complete it and not jerking people from project to project,'' he says.

Glenn James, a principal with Deloitte & Touche, says, ''The companies I've seen that have been successful in attracting and keeping people have done a lot of things that deal with the non-monetary aspects of the job,'' he says. ''That may include letting people do things like work nonstandard hours, telecommute, or if somebody has an interest in traveling, assign them to an international position for some time.''

On the other hand, employees can help themselves become more valuable to the organization by being more business-oriented.

''If you're a network manager at a major corporation, you are the bridge between two sides of a lake,'' James says. ''On one side are the people building TCP/IP packets, and on the other side folks are wondering what the stock price is. It's a pretty big distance between those two, and you've got to have a little insight into both sides.''

Gerard Cunningham, another Deloitte & Touche principal, says bridging that gap can have a direct impact on compensation. ''Finding ways to integrate the communications group with the rest of the business and show the value of it is likely to improve compensation [for the whole IT group] and deal with some of the job movement issues. That's what we see almost every day.''

Korn/Ferris' Reynolds has a word of advice for net managers: ''Be a thought leader as well as a technical leader.'' A thought leader, she says, is someone who thinks about the contribution of a given project to the organization and what other projects can be built on top of it. In short, a thought leader is ''someone who thinks about what he's doing to help his boss look good.''

Long term, Cunningham says, the key to success is to ''keep retooling. The hot hands in the marketplace from a compensation point of view continue to change and evolve. If you're the backbone network engineer and you're not familar with routable networks, you're in trouble.''

But this change and evolution also amounts to opportunity, for those who choose to accept it. ''It's a great time to be a technology professional,'' Schoff says. ''The opportunities that exist today and that are likely to face people for the next 10 or 20 years are just phenomenal. I don't think there's going to be any end to it for quite some time.''