Individuals Working for Dot-coms, Start-Ups Earn Higher Salaries Finds IDG’s InfoWorld 2000 Compensation Survey

SAN MATEO, CA – JUNE 26, 2000 — IDG's InfoWorld today announced survey results finding that on average, individuals working for startups and Internet companies are earning higher salaries, and many more are making six-figure salaries than those at established companies. Results of the 2000 InfoWorld Compensation Survey, appearing in the June 26 issue, also found that individuals working at dot-coms are receiving higher-percentage raises and bonuses — and more feel they are compensated fairly than those at traditional companies.

 

The 2000 InfoWorld Compensation Survey, conducted online this February and March, found that several factors are luring IT staffers and managers away from more traditional companies to dot-coms and start-ups. Among them are higher salaries, stock options, and the chance to work in a hot field with cutting-edge technologies.

"Even with the current turmoil in high-tech stocks putting a bit of a damper on the dot-com mystique, the lure of dot-coms may still make some lasting changes to the IT employment landscape," said Renee Gotcher, features editor at InfoWorld. "Our research shows that start-ups feature both financial and organizational differences that are a strong lure for IT professionals—and this is sobering news for IT recruiters and managers at traditional companies."

Start-Ups: Higher Instability

While the lure of dot-coms is strong, there is a downside. InfoWorld's survey found that those at dot-coms and start-ups are working longer hours and experiencing more significant salary fluctuations than those at established companies. Moreover, nearly three times as many employees at start-ups increased their salaries by switching companies than did those at established companies, suggesting higher instability in the start-up job market.

The 2000 InfoWorld Compensation Survey also found that, when comparing the demographics of respondents at start-ups to those at established companies, those at start-ups are younger, have less IT/IS experience, and move more frequently from job to job. Almost half of respondents at dot-com companies have been at their current company for one year or less.

Key Compensation Findings

— Over 20 percent of respondents at start-ups are making six-figure salaries, about twice as many as those at established companies.

— 59 percent of respondents at Internet companies are receiving employee stock option plans, compared with only 28 percent of those at traditional companies. When asked what was the one financial benefit they wish was offered, more respondents at established companies said "stock options" than any other financial benefit.

— The top benefit that those at start-ups wish was offered was matching 401(k) plans, suggesting that more tangible financial benefits are important to those in the riskier start-up environment.

— Although a slightly higher percent of respondents at non-Internet companies received a salary increase over the previous year — 77.2 percent compared to 74.6 percent at Internet companies — respondents at Internet companies who did get a salary increase got a much higher percent increase.

Other Findings: Employee Motivation

— Managers were asked what they believe is important for motivating employees. InfoWorld's survey results show that most managers are in tune with employees, ranking motivations the same way and choosing the same benefits employees did.

— In terms of key motivating factors, both managers and employees ranked compensation first, followed by appreciation/recognition, ability to work with cutting-edge technology, satisfaction of helping the company run efficiently, and education/training.

Methodology

Two data collection methods were employed to capture compensation data for IT professionals from both InfoWorld print subscribers and registered and unregistered online readers. An intercept survey was posted on InfoWorld.com from Feb. 8 through Mar. 20. One in every 20 visitors to the site received a pop-up invitation asking IT professionals to participate in the survey. Visitors were given the option of bypassing the survey. In addition, approximately 7,000 InfoWorld subscribers received a broadcast e-mail inviting them to participate in the study and directing them to the study URL. Most respondents work for established companies, with about 13 percent working at Internet companies. A total of 3,291 completed questionnaires were received from both data collection methods.

About InfoWorld

Headquartered in San Mateo, Calif., in the heart of Silicon Valley, InfoWorld Media Group publishes InfoWorld and InfoWorld.com. InfoWorld, the IT newsweekly that defines technology for business, focuses on editorial coverage of key technologies, products and trends to assist IT professionals in leveraging technology for business advantage. InfoWorld's $23 million dollar dedicated multi-platform, enterprise test bed — the InfoWorld Test Center — conducts the industry's most trusted testing of technology and products as well as provides in-depth analysis and the business ROI of the technology and implementation.

InfoWorld Media Group also publishes InfoWorld.com, defining technology for business on the web, features daily technology news, product reviews, opinions, interactive discussion forums, along with e-mail newsletters and a complete archive of InfoWorld's print edition.

InfoWorld Media Group is a wholly owned independent business unit of IDG, the world's leading IT media, research and exposition company. IDG publishes more than 300 computer magazines and newspapers and 4,000 book titles and offers online users the largest network of technology specific sites around the world through IDG.net (http://www.idg.net), which comprises more than 270 targeted Web sites in 70 countries. IDG is also a leading producer of 168 computer-related expositions worldwide, and provides IT market analysis through 51 offices in 43 countries worldwide. Company information is available at http://www.idg.com.