hkp/// group has been comparing salaries of top executives and management as well as organizational structures of participating companies since 2020 as part of its cross-industry surveys. IT continues to be a focus. hkp/// group experts Sabrina Müsel and Juan Li provide insights into the latest survey results.
Computer scientists, administrators, front- and back-end developers or UX designers ... Careers in the IT sector are many and varied. Experts in fields like these are among the most sought-after professionals on the job market. The fact is that almost all companies need to invest in digital transformation and information security as well as in the latest trends such as data analytics.
As well as keeping track of how the salaries of IT experts are developing in the market and addressing how to attract and retain these specialists over the long term in the current tough market situation, many companies are also asking themselves what an optimal IT management setup should look like in order to be able to tackle tomorrow's challenges and concerns.
IT & digitalization – the job family covered by the hkp/// group participant surveys
The job family “IT & Digitalization” included in the hkp/// group participant surveys, which address top executives and other management/expert roles directly below Management Board level to the tariff threshold, was revised and further differentiated in 2022. These amendments were made in collaboration with representatives from participating companies (including DAX companies, comparably large non-listed businesses and other medium-sized enterprises).
As a result, specific evaluations for the following IT profiles are now available as part of our compensation surveys:
- IT / CTO
- Data Engineering
- Business & Data Analytics
- Application / Software Development
- Software Architecture
- System Integration
- Network / System Administration
- IT Support
- IT / Cyber Security
- Project Management
IT professionals: significant differences in compensation levels
An initial analysis of these profiles shows that there can be significant differences in compensation levels within the job family “IT & digitalization” – IT professionals are not all seen as alike. Depending on the level considered (e.g. head of division, head of department or team leader), those working in other IT subfields can earn the highest salaries. Professionals in the field of “digitalization”, for example, are paid above the average of all other IT functions at both tariff threshold and head of department level, underscoring the current relevance and importance of such positions.
Fringe benefits often fail to meet IT professionals' expectations
Aside from compensation, the fringe benefits on offer also play a key role in the race for the best IT talent. According to participants in a special survey on this matter, the fringe benefits offered by companies don't fully meet the requirements of today's IT professionals and job applicants.
“To continue to stay competitive, the requirements of IT professionals have to be better addressed and appropriate benefits should be offered beyond their salaries. There’s a particular need to improve on benefits related to work-life balance and location of work,” explains hkp/// group manager Juan Li.
Extending fringe benefits for IT professionals
Many participant companies can't yet fully address “New Work” aspects such as remote working abroad or working in fully flexible time models. This is in part due to organizational or, for example, tax constraints, but also because of prevailing corporate culture and traditions. Some of the more conventional benefits, such as company pension plans and job tickets, are being sought less and less frequently by (young) IT professionals. These fringe benefits are often included in standard packages and shouldn't be dropped, but instead supplemented with additional opportunities specific to the target group (in this case, IT employees).
Management setups in IT: how many managers are there?
Another focus of the hkp/// group surveys is the examination of management setups in German companies. This involves analyzing the absolute and relative number (in relation to the total workforce) of executives at top levels in Germany and worldwide within large German companies. The analysis can also be broken down by specific corporate areas, including IT.
These analyses show that, on average, there are 50 to 70 executives working in IT at the largest participating companies from below Management Board level to head of department level. This number is, for example, currently comparable with Legal & Compliance. In other more operational areas, such as Production and Sales, the figures are significantly higher.
Cost ratio insights through data linking
Experts at hkp/// group don’t just look at management-level setups in isolation. Our methodology makes it possible to feed in compensation data and other information such as revenue and earnings. For example, the average target direct compensation for managers in IT is calculated in relation to revenues in Germany in order to determine a cost ratio for this area in comparison with other areas.
“The exclusive linking of compensation information with organizational resources and financial indicators in our surveys provides our customers with key insights for the further competitive development of internal structures,” concludes Sabrina Müsel, director at hkp///group.
Insights into compensation as well as organizational and structural aspects
The hkp/// group surveys therefore provide in-depth insights into compensation levels and systems as well as into the organizational and structural aspects of different functional areas within the German market. IT is a much-discussed example of this in survey results meetings.
In particular the analyses of organizational structures provide answers to questions such as:
- What does a target cost structure, e.g. in IT, look like?
- How do I optimize my management structures against a backdrop of cost pressures or efficiency initiatives?
- How do I dimension variable compensation for newly created units?
If you are interested in participating in the hkp/// group surveys or in structure (cost) analyses, please get in touch with us.