As the battle to attract top-tier tech talent rages on, IT staffing suppliers must be equipped with a full arsenal to compete effectively on the front lines. One arrow to have in your quiver is Staffing Industry Analysts’ US Pay Rate Rangefinder, an Excel-based tool that enables your firm to benchmark its pay rates for various occupations against local, state and national wage data. This resource incorporates data from the US Bureau of Labor Statistics — the broadest and deepest set available — to provide wage levels and quartile ranges for 820 detailed occupations and 421 metropolitan areas, enabling the user to view roughly 200,000 pay range profiles.  

Firms that offer below-median pay rates are at a disadvantage relative to their competitors in attracting and retaining the most effective IT workers to deploy on behalf of clients. On the other hand, paying more than necessary has a deleterious impact on bill/pay spreads, which most firms can ill afford in this era of high MSP/VMS penetration. The Rangefinder provides the data you need to help ensure the pay rates you offer remain in the “sweet spot” of the competitiveness versus profitability tradeoff spectrum.

In addition to benchmarking, this tool offers significant utility for strategic management as well. For example, a firm might use the Rangefinder to uncover locations in which IT workers earn significantly below the national average, focus their recruiting efforts in those regions, and deploy the talent they find in another geography where bill rates are relatively strong, thereby expanding gross margin.

Moreover, as many firms with a historical base in staff augmentation are seeking to move up the value curve into IT services, it is becoming more common for these companies to create centralized facilities to conduct software development, QA testing, help-desk support and similar activities on behalf of their clients. Locating such a center in a region typified by relatively low wages will provide the greatest marginal efficiency for the firm and enable it to offer the most competitive rates for its services.

So, what does the tool tell us with regard to the trajectory of pay rates for IT skill sets? At the broadest level, nationwide wages for computer and mathematical occupations (the closest US Bureau of Labor Statistics occupational group as proxy for IT skill sets) rose 2.6% year-over-year in 2015, while employment increased 4.5%, outpacing respective growth of 2.3% and 2.6% for the broader US economy. There is a trove of other shimmering data nuggets to mine from this lode as well, so we encourage you to download the Rangefinder with pick and shovel at the ready.

Corporate members can download the 2016 US Pay Rate Rangefinder and companion PDF here.