Salary: minus for developers, IT support does not compensate for inflation

Although wages in the German economy rose overall in 2024, some IT professions did not even manage to compensate for inflation. This is the result of an analysis of salary information in job advertisements on the job platform, Indeed. Software developers were particularly hard hit, with salaries falling by an average of 0.7 percent. For jobs in IT support and IT infrastructure, the increase was 0.8 percent – but even that is not enough to compensate for the average inflation rate of 2.2 percent in 2024.

This means that the three IT professions are among those with the weakest salary growth among the 20 most relevant occupational groups on the job platform, explained Indeed. 18 of the 20 occupational groups surveyed had recorded wage growth, with salaries in the professions surveyed rising by an average of 3.2 percent.

Austerity measures hit IT jobs

“A few years ago, many would have thought it impossible that salaries in software development would fall. However, after years of rapidly rising salary levels, many well-paid IT jobs are now particularly affected by the austerity measures implemented by many companies,” said Virginia Sondergeld, economist and labor market expert at Indeed.

However, IT jobs are still above the salary level of other professions, which have achieved an increase in the past year. In general, Sondergeld sees a slowdown in wage development for traditional office jobs.

Demand for software developers is also declining: no other profession has seen such a drastic year-on-year decline in job advertisements on Indeed. Accordingly, job security is likely to be the more important factor for developers this year than possible salary increases, according to Indeed. A general decline in job advertisements for IT specialists was also noted by the German Economic Institute (IW) in last year's MINT Autumn Report.

Sharp rise in real wages

The Federal Statistical Office (Destatis) provided slightly different figures on wage trends yesterday (Wednesday). According to the report, nominal wages in Germany will actually be around 5.4 percent higher in 2024 than in the previous year. Real wages, which are supposed to reflect real purchasing power minus the inflation rate, have thus risen by around 3.1% compared to the previous year. Inflation compensation bonuses as well as collectively agreed wage increases and one-off payments had ensured strong real wage growth. This is the strongest real wage increase since the statistics began in 2008.

However, the authority does not record real wage developments for IT employees. For the broad category of “information and communication”, Destatis sees an increase of 6.9 percent. However, in addition to software companies, this also includes publishing houses, broadcasting companies and telecommunications service providers. Destatis also goes by economic sector, not by individual occupation. The janitor at an IT service provider would therefore tend to fall into the information services category, while the software developer at an insurance company would be included in the figures for the insurance industry.

(axk)