Understanding IT Compensation Strategies from the Perspective of Small Non-IT Firms

Abstract

Since 2008, the weakened global economy has resulted in increased layoffs, hiring freezes, and company closures in high-tech industries. Ironically, there has been increased demand for information technology professionals (IT workers) in non-high-tech industries such as financial services, healthcare, and transportation industries. This idiosyncrasy suggests there is value in exploring IT personnel strategy in non-high-tech industries. Larger firms or high-tech companies commonly compete for IT talent through lucrative incentive payments or higher base salaries. In contrast, smaller companies or non-high-tech firms with limited resources are more constrained in their compensation strategies, and more vulnerable in competing for IT talent. Taking this predicament as a backdrop, this paper reports the findings of a case study investigating IT compensation practices in a small, U.S. based, Chinese media firm that relied on IT to change its media strategy. Focusing on four specific risk areas, we illustrate how this firm competed successfully when resources were scarce but competition high within and across the industry.