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[Some charts omitted]

Once a year, Softletter and the Association of Support Professionals conduct a joint survey of tech support salaries, one of the most closely-watched expense items in almost any software company. The surprising news this year is that support pay hasn't gone up--in fact, despite industry-wide pay escalation for non-support jobs and a tight labor market, salaries for rank-and-file tech support reps have barely budged in more than two years.

Moreover, the freeze in support pay has been remarkably consistant across a wide range of job titles, from senior support executives (who lost $250 in median annual pay) to entry-level customer service reps (who gained a token $130). Even when we analyze salaries by skill levels, company size, support organization headcount, product price, and geography, the gains and losses turn out to be little more than statistical noise. In an industry as volatile as software, such stability is certainly an unexpected phenomenon.

What's behind the support salary freeze? One likely answer is that the once-relentless demand for support staff seems to be leveling off, thanks to increased use of outsourcing and (perhaps) the proliferation of Web-based self-service solutions. During 1996 and 1997, the median support headcount among our survey respondents held level at 12 employees; in 1998, the median dropped to 11. If support organizations actually begin to shrink, it's almost inevitable that decreasing demand for support employees will translate into lower salaries, even for highly-skilled technicians who currently have a great deal of bargaining power.

In the short run, of course, support pay continues to be a delicate balancing act: Software companies badly need experienced and talented employees, but the large size of most support staffs (typically 15%-20% of a company's total headcount) means that above-market support salaries can have a painful impact on corporate budgets.

The problem of setting fair and competitive salaries is further complicated by differences among software companies and market segments. A mass-market consumer software company requires very different support skills than a developer of high-end enterprise solutions; similarly, small startups usually compete for different types of employees (at dissimilar pay levels) than larger and more regimented firms. To reflect these differences, we've tried to provide narrower slices of the data along with a single set of industry-wide salary benchmarks (above).*

In addition, our salary benchmarks are based on standardized job titles and capsule job descriptions that have remained constant for the four-year history of this survey. Here's how our questionnaire describes the categories we use, with a few observations about this year's data:

*SENIOR SUPPORT EXECUTIVE (vice president or director level)

"Coordinates activities and budgets of multiple support groups or sites. Meets regularly with senior corporate management and key customers."

Roughly half the companies in this year's survey have a "senior support executive" who (by our definition) coordinates several support groups and works closely with top management and key customers. Although there is certainly evidence of some title inflation in this category, service and support are becoming increasingly strategic in the software industry, and executive-level pay reflects this trend. In fact, 36% of support executives currently earn more than $100,000 per year, not counting additional bonus and option participation; median pay for the category is $89,750. (However, software companies still seem hesitant about handing out top-level titles. Only 35% of senior support executives are vice presidents; 65% hold director titles.)


"Manages day-to-day activity of a single support center staff."

Most support organizations have at least one "inside" manager who oversees ongoing operations, including such tactical areas as productivity, recruiting, and customer satisfaction. Usually, support department managers supervise fairly small groups of technicians and many spend part of their time on the phone during periods of heavy call volume. Only 10% of department managers earn more than $80,000; most manager-level pay is in the $50-$60,000 range.


"Manages major business activity; usually has no direct reports."

In addition to traditional operations managers, a good many support organizations have specialists who manage such areas as performance analysis and automation systems. Currently, 80 of our survey respondents have employees in the "analyst/project manager" category ($45,000 median pay), compared to 154 with "department manager" titles.


"Provides on-site service, primarily for enterprise products."

PC support is typically provided over the telephone, but most high-end software companies also provide on-site services, usually as part of installation or fee-based maintenance plans. In the past, field technicians were the industry's highest paid support reps; in the past two years, however, their salary profile ($39,000 median) has fallen slightly behind the "senior support technician" category.


"Answers escalated calls; may function as a group or team leader."

Most support organizations have developed career paths that reward experience, in-depth product knowledge, certification, or a part-time management and training role. Typically, the primary job of the "senior" technician is to provide answers to questions that first-level support reps or outsourcers can't answer. Median pay for senior technicians is $40,000; the best-paid 25% earn more than $50,000, while the bottom 25% earn less than $35,000.


"Provides first-level solutions, primarily over the phone."

At most software companies, the task of handling unescalated telephone calls is an entry-level job with relatively high turnover. As a result, pay levels tend to be low ($32,300 median). Moreover, the range of salaries for basic tech support is fairly narrow: Half of the companies in this year's survey paid their support reps between $28,000 and $38,000.


"Answers routine service questions; routes calls to technicians."

Customer service reps typically handle first-level customer contacts that don't require diagnostic skills or training, such as collecting background information and filling orders. Many companies now pay customer service reps on an hourly basis; the current industry median salary, $26,130, is equal to about $12.50/hour.


*Annual revenues: Pretty consistently, larger software companies pay their support employees at the top end of the salary scale--and, in general, larger companies also get higher productivity from their support staff. Except for senior executive salaries, however, pay scales tend to level off at the $10 million level; companies with $100+ million revenues pay essentially the same support salaries as those in the $10 million range.
 Annual Company Revenues
 [less than]$5 MM $5-$10 MM $10+ MM

Senior Support Executive $80,000 $73,500 $91,500
Count: 23 14 56
Department Manager $50,000 $57,000 $60,000
Count: 40 23 74
Analyst/Project Manager $40,000 $42,500 $55,000
Count: 15 12 47
Field Support Technician $39,250 $36,500 $42,500
Count: 18 10 22
Senior Support Technician $38,000 $39,000 $42,000
Count: 35 21 74
Support Technician $28,000 $35,000 $33,280
Count: 45 26 71
Customer Service Rep $26,000 $28,500 $26,000
Count: 23 14 46

Salaries are medians. "Count" is the number of responses in each salary category or sub-category.

*Organization size: In making salary comparisons, company revenues are usually less important than the size of the support organization (which may be proportionally larger in companies that treat service as a profit center, or smaller when the company outsources a large part of its call volume). Large support organizations tend to pay premium salaries to their executives and managers, but organization size seems to make less difference for lower-level support technicians and customer service reps.
 Support Organization Size (employees)
 1 - 9 10 - 29 30+
Senior Support Executive $80,000 $80,000 $95,000
Count: 27 30 39
Department Manager $50,000 $60,000 $60,000
Count: 58 44 45
Analyst/Project Manager $43,500 $45,000 $55,000
Count: 16 21 37
Field Support Technician $39,000 $38,000 $43,000
Count: 17 13 23
Senior Support Technician $38,000 $42,000 $43,000
Count: 53 39 45
Support Technician $32,250 $32,000 $32,100
Count: 56 41 49
Customer Service Rep $25,000 $26,350 $26,130
Count: 31 26 30

Salaries are medians. "Count" is the number of responses in each salary category or sub-category.

*Product price: Publishers of consumer-level and mid-priced software titles pay support employees--especially their rank-and-file technicians and service reps--significantly less than companies that sell high-end products (priced over $1,000). Besides the greater skill levels required for support of high-end products, these companies often generate fee-based service revenues, which helps reduce the budget pressures that mass-market software support organizations feel.

Price of Company's Best-Selling Product
 [less than]$150 $150-$999 $1,000+
Senior Support Executive $87,500 $80,000 $90,000
Count: 10 17 55
Department Manager $49,000 $60,000 $60,000
Count: 24 25 75
Analyst/Project Manager * $50,000 $45,000
Count: 9 13 39
Field Support Technician * * $40,000
Count: 6 6 29
Senior Support Technician $39,000 $38,000 $43,000
Count: 17 25 71
Support Technician $31,000 $30,000 $33,203
Count: 22 25 77
Customer Service Rep $25,000 $26,000 $28,000
Count: 19 16 40

Salaries are medians. "Count" is the number of responses in each salary category or sub-category.

Asterisk (*) indicates insufficient data (fewer than 10 responses).

*Location: Not surprisingly, the cost of support pay is substantially higher in high-wage states and urban centers. Technicians and customer service reps earn 17%-22% more in California and Massachusetts than they do elsewhere in the U.S.; managerial and executive salaries are also higher in these states, usually by $5,000-$10,000 per year:

Location of Primary Support Center
 Calif. Mass. Other
Senior Support Executive $95,000 * $85,000
Count: 21 6 71
Department Manager $60,000 $62,000 $55,000
Count: 32 11 104
Analyst/Project Manager $54,500 * $44,000
Count: 12 7 57
Field Support Technician * * $38,000
Count: 6 2 45
Senior Support Technician $45,000 $45,000 $36,870
Count: 27 12 98
Support Technician $35,000 $35,000 $30,000
Count: 29 13 104
Customer Service Rep $30,000 * $25,000
Count: 23 5 62

Salaries are medians. "Count" is the number of responses in each salary category or sub-category.

Asterisk (*) indicates insufficient data (fewer than 10 responses).


This survey, our fourth annual report on tech support salaries in the PC software industry, reflects survey data supplied by 201 software support organizations with a total of 11,000 support employees. Some key characteristics of our sample universe:

Company size: 47% of our respondents report annual sales of $10 million or more; the rest fall in the $5-$10 million range (16%) or below $5 million (37%).

Organization size: Although 23 companies in our survey have more than 100 support employees, the absolute size of most PC software support organizations continues to be fairly small: Median organization size this year is 11 employees; 44% of respondents have 1-9 support employees, 27% have 10-29 employees, and 29% have 30 or more employees.

Product price: Many of the software companies in our sample serve high-end vertical or enterprise markets. The median price for our respondents' best-selling products is $2,000; 59% support products that sell for more than $1,000, another 22% support products in the $150-$999 range, and 19% support products that sell for less than $150.
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Copyright 1999, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Industry Trend or Event
Geographic Code:1USA
Date:Jan 18, 1999
Previous Article:1999 ANNUAL FINANCIAL RATIOS.

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