Salaries in the information technology sector have ceased to grow, Avito Jobs experts reported in September 2018 after analyzing the System Administrator and Programmer jobs available on the market. The average monthly salary in the IT industry was RUR 37,400 ($570) in 2018, the same as last year; a programmer made RUR 42,300 ($642) per month, and a system administrator, RUR 32,500 ($493), Avito experts said. The highest compensations were recorded in Moscow, Samara and St. Petersburg, and the lowest – in Ufa, Volgograd and Barnaul. The report also notes that, while IT jobs remain in demand on the market, the interest from applicants has declined: the total number of responses (according to Avito) has decreased by 43%. The number of Programmer vacancies dropped 11% year-on-year, while the number of System Administrator job openings, on the contrary, increased by 18%.
The current wage situation runs contrary to the efforts that are being made to develop new technologies. Let us consider the possible reasons for this.
Looking at the labor market dynamics in the IT segment and the market as a whole, we can see that in the last 5-10 years, very few large companies emerged that develop replicable IT products sold on the open market. Most new projects available have to do with automating government services. But, unlike development of replicable software, these projects are limited in time and volume of work required.
A company that manufactures commercial products regularly upgrades them, providing programmers with workplaces for a long period; this is not the case with projects to automate public services. Imagine a freight transport management system: once it was developed and put to use, as a rule, further work on the project is not required except minor maintenance jobs. The system performs the necessary functions, so the programmers involved in the project at the development stage are no longer needed.
Another factor is that since the mid-2000s, Russian companies have felt confident enough to compete with European rivals in terms of wages, and gradually, qualified specialists with experience in Western companies have come back to domestic producers.
This has resulted in the customized software development business considerably decreasing due to the high cost of programmers’ labor. Now it is very difficult to restore the positions in the market and it can take a long time.
In addition, it should be noted that recently money has been invested mostly in building technological infrastructure rather than to develop programmers’ potential and create products. In fact, investment in material objects is not related to development of technologies. As a result, the money goes to constructing a new district or a town. It would be much more efficient for the sector to spend money for orders, grants and equipment purchases, which would later produce results. The current investment in software programming is inefficient. An additional factor that is hindering the development of the retail software industry is the consolidation and abrupt bundling of sales channels. Fifteen years ago, small software developers could find small distributors, resellers and other sales and promotion partners in various countries and regions, while now it has become virtually impossible. All software for Apple or Android products is sold via their online stores. As a result, only a few manufacturers in each software category have direct access to potential clients. Financial expenses on promotion exceed manifold the cost of the software development.
In these circumstances, the technical perfection that has always been typical of Russian development projects is defeated by sales skills, marketing budgets and the availability of users or potential customers. Of course, there are always exceptions to the rule; however, the programmers’ wage dynamics, in my opinion, is the most telling criteria of the lack of development in the sector. The fall in programmer’s wages actually reflects the decreasing demand for them and reveals downward trends in the industry – somethings that requires more attention from the IT community and the government. I believe that efforts should be made to promote and develop domestic software sales outside Russia, not necessarily in the United States or Europe. Computers are everywhere. However, this should be done by professionals not related to major market players or the government. In the former case, it will involve a biased approach and promotion of only a small part of available products, while in the latter case, there is simply not enough experience and knowledge for such specific activity.
By Mikhail Kalinichenko, General Director, Protection Technology