Are Data Executives Salaries Under Pressure?

On June 25th at the FISD General Meeting in NY, Dale Richards, CEO, Lakefront Ventures presented preliminary results of the “Data Management & Financial Information Professional Salary Survey”. While it is difficult to draw conclusions from the data collected, it creates a baseline for future year’s comparisons. We will need more data before we can extract trends and have a big story to tell. But it is a great start. If you have not already done so, go to http://www.lakefrontdatajobs.com/salarysurvey to participate in the survey and register to receive future results.

There are interesting observations based on current events which may be supported by this sampling. Due to past consolidations, outsourcing and the busting of various bubbles, there has been a definite downward pressure on salaries. But the ground lost does not appear to be great and I would venture to say there will be a bounce back relatively soon. In my mind the reason for a quick recovery is simple, as for every action there is a reaction.

Consolidation - now economists and governments are assessing the dangers of too-big-to-fail organizations. There will be room for spin-offs and divestitures which may benefit the employment in the low to mid level in technology, analytics and data management space. Most of it I expect to be voluntary, a strong motivation being to focus on core business and keep regulators at bay. Nevertheless job losses are expected and consequently downward pay pressures will exist but probably felt most acutely in the high end of the pay scale. In the sell side and data vendor space we have examples of consolidation such as JPMorgan-Bear Sterns, Barclay-Lehman, Wells Fargo-Wachovia and Thomson-Reuters where top jobs were eliminated. The boutique organizations or other areas will not be able to support the previous compensation of the laid off managers. Consequently we will see an impact on the over 100k ranges.

Outsourcing - probably the biggest downward pressure on salaries on the lower to mid of the scale is also being re-evaluated. You will hear lots of talk about the cost and difficulties in managing these relationships. Onshore or nearshore is the new focus. The benefits are clear: improved cost in communications and access to new local or near pools of talent. Let's not forget political pressures to limit outsourcing. Some form of outsourcing will continue albeit more cautiously and to new near locations. Opportunities will be available to some low to mid experience managers who retain extensive knowledge of the business.

The Bubbles - The reaction to the economic, speculative bubbles and the unchecked excesses of the past dozen years has been taking shape over the last few months and will be likely to produce results -- not only in the financial industry but in the whole US economy. Economists and regulators are focusing on creating new tools to recognize and prevent future bubbles. With the promise of greater oversight and, to some extent, re-engineering of the economy, this task will rally heavily on IT and data professionals. So the new development in these areas should cause the salaries to trend up.

By the way, go to the Inside Reference Data site and read the Majority of Data Executives "Earn $100,000+" story where I was quoted.