A few weeks ago, Foote Partners reported a decline in salary and other compensation for certification-related titles in favor of increased pay for IT pros who work with enterprise business application development. (See "Certifications, Smertifications: What Have You Done for Me Lately?")

Surprisingly, Foote also reported that during the last two years, the average pay for employees with non-certified enterprise business skills rose a whopping 24.8 percent. There are a couple interesting questions worth exploring out of this point, the first of which has to do with the salaries of System i application development pros who might be wondering why their own annual salary raises weren't anywhere near the rates reported by Foote.

Salary surveys and salary tracking are notoriously difficult to manage because of the many factors involved. For instance, in the middle of an economic downturn, companies might lay off their junior programmers, retain their experienced senior developers, and outsource application development overseas. In this kind of situation, the average salary for an application developer might appear to increase, when in reality developer salaries might actually be stagnant. The average can rise simply because you removed a bunch of low salaries from your job pool. This doesn't necessarily indicate an increase in demand or available jobs, but people might assume so anyway.

While this sort of example has happened in the past, it doesn't reflect what Foote has been seeing and reporting this year. Foote supplements its surveys and data gathering with additional interviews and targeted studies to get a more accurate picture of what's actually going on. For instance, many companies have spent a lot on infrastructure issues driven by regulatory compliance, which has sidetracked or slowed customer-facing product and service spending. After the first Sarbanes-Oxley deadline, notes David Foote, CEO and chief research officer for Foote Partners, "A significant portion of IT budgets migrated to new product and services as companies got 'back to business' by refocusing IT budgets and staffing on new products and improved services for their customers. That meant a lot of application development stuff all at once."

In addition, Foote has seen more companies begin to develop more applications in-house after outsourcing previous application development work that tended to be more successful for lower-level coding than complicated app dev projects. This also comes at a time when Foote is finding intense global competition for market share combined with more web-enabled business models, which, of course, require a combination of web development and enterprise integration skills. Throw in an increase in mergers and acquisitions, and enterprise application development efforts pretty much have to step up. "Enterprise AD is really hot," Foote says. "Fierce talent wars for SAP experience all over the United States, for example, have spiked prices."

Figuring Out Supply and Demand

"What is really hard to tell in the larger IT marketplace is whether we are back in balance between supply and demand," notes Nate Viall, a System i recruiter and president of Nate Viall and Associates. "The hidden message out there from the very large companies is that their underlying push to get the H-1B visa limited raises substantially."

Viall says that increasing H-1B visas will disrupt whatever balance we're currently in and will have a major negative impact on the job market, particularly starting with new student graduates. "First, it will put the Class of 2007 this spring into a recruiting hole. The first new hires will be H-1Bs, not fresh graduates," Viall explains. "Second, it will adversely impact enrollment in the tech majors at both two-year and four-year schools. From my conversations with professors here in the Midwest, we are probably at the bottom in terms of the enrollment decline. We are down 40 to 90 percent from the 1999-2000 peak in terms of the enrollment and graduation numbers."

If tech graduates in spring 2007 can't find good entry-level jobs, you can expect underclassmen to pay attention and act by switching majors, changing minors, or staying out of the IT field altogether. Who wants to go to school for a job in a field that is constantly at risk for outsourcing? What about the sticky issue of competing with thousands of international H1-B workers, too?

If you think about the broader IT landscape, there's a potential crisis here in the U.S. if students stop entering IT, which Vial says will create "a self-fulfilling prophecy — no jobs, no students, no students . . . then industry demands more people from overseas."

For the System i world, the talent issue might also be further exacerbated by the fact that experts are retiring and there are few new youngsters available to understand and exploit the System i. For more on this problem — and one way to tackle it — check out System i Network's "The Lost Art of Mentoring."