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Prepare to pay more to retain tech talent

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The price for top high-tech talent is rising, and employers that want to hold onto the best IT staff had better be ready to pay up. Technology pay in the U.S. saw a second straight year of hikes in 2014, with average earnings of $89,450, up 2% from 2013.

An annual salary survey by Dice Hiring, which tracks employment and compensation in the tech sector, found that 61% of technology professionals earned higher salaries in 2014. Most of them won raises from their current employers, but 25% fattened their pay envelopes by jumping ship to another employer. These employees know that they are in demand and can hold out for higher pay in a hot job market.

Two-thirds (67%) told Dice they are more confident than ever that they can find a new, better-paying job if they want to. In fact, 37% said they anticipate changing employers this year for higher pay, more interesting work or better conditions.

It’s no coincidence that a subset of the IT community—tech recruiters—saw some of the largest pay increases last year. Their average pay jumped 19% in 2014—$81,966, up from $69,102 in 2013. That’s ample evidence that competition for highly skilled technical professionals is heating up.

It’s not just salaries that are rising. Tech bonuses were both more frequent and higher. Thirty-seven percent of tech pros received bonuses in 2014, slightly more than the 34% percent who received them in 2013. The average bonus in 2014 was $9,538, up 2% year-over-year.

Higher pay didn’t necessarily make technology pros happy. Only 52% of technology professionals said they were satisfied with their compensation in 2014, down from 54% in 2013. In fact, satisfaction with salaries has dipped each year since 2012, when it peaked at 57% and salaries saw the biggest year-over-year jump to 5.3%.

“As demand for technology professionals rises and highly skilled talent is harder to find, the pressure is being reflected where it counts: paychecks,” said Shravan Goli, President of Dice.com. “Still, tech pros are less happy with their earnings, signaling to companies that in order to recruit and retain the best candidates, offering more will be necessary.”

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