Are you being rewarded? Bigger pay rises for tech leaders at AI-progressive businesses

Find a company that treats tech as a money maker, not money saver

What did the 10% of tech leaders who had a significant pay rise last year do differently – and how can you emulate them?

Although the technology recruitment market has cooled somewhat from the peaks of the post-pandemic recovery, strong and effective technology leaders who are attuned to the strategic agenda remain in demand. Leaders are also moving frequently, with an average expected tenure of just over three years.

Modern businesses are looking for tech leaders who can support transformation and growth as well as instil a greater focus on operational efficiency and, where needed, the ability to do more with less.

In some sectors, such as financial services, fintech, PE-backed enterprises and healthcare, we continue to see a real war for talent as organisations compete for the best CIOs and other tech leaders to help drive their technology investments forward. Other sectors are a little quieter due to market challenges in an uncertain economic environment.

Majority receive a pay rise

The resulting picture revealed in this year’s Nash Squared/Harvey Nash Digital Leadership Report is reasonably positive, if not stellar.

Just over half (53%) of technology leaders globally report having received a pay rise in the last year, while 42% say their salary has stayed the same. Over one in ten (11%) report receiving a pay rise of more than 10%, while 13% say it has increased by 15% or more.

These findings are broadly in line with what we would have expected. In a really buoyant year, perhaps 70-80% of tech leaders would have reported a rise. In today’s very mixed market, where financial performance and confidence varies not only from sector to sector but from individual organisation to individual organisation, it isn’t surprising to see more of a split.

AI and other factors driving higher rewards

Diving deeper into the data, some interesting insights emerge. When we examine those leaders who had a pay rise of over 10%, they are distinct in a number of ways, but broadly fall into three categories (although in some cases they may overlap).

The technology leader works at a business where: i) the CEO is more focused on technology making money versus saving money for the organisation (73% compared to the 66% global average); ii) they are more likely to have a large-scale implementation of AI (27% compared to 19%); iii) and they are more likely to be increasing their technology team headcount (55% compared to 41%).

What unites all these factors is that they are about growth. Where an organisation is committed to harnessing technology to help unlock business growth – whether that is through enhanced productivity, increased operational efficiency or better customer experience and engagement – technology has a more strategic profile in the business, and technology leadership is more likely to see their remuneration and reward increase as a result.

It is certainly eye-catching to see AI on the list – but perhaps not surprising, given its rapid rise up the technology agenda. To some extent, it may also be self-fulfilling: those businesses that have the financial resources to invest in a large-scale AI implementation are also likely to have the budget available to reward the CIO with the responsibility of leading it.

In our view, the greater likelihood to be advanced in AI is a facet of the wider attribute of using technology to drive productivity, innovation and value creation. It is these characteristics that are most likely to co-exist with increased rewards for technology leaders.

Advice for tech leaders

So, what conclusions can be drawn for those technology leaders who are keen to secure a higher salary and/or overall reward package?

Firstly, in terms of negotiating a raise at your current employer, there is a general recognition of the need to display sensitivity to current conditions. In many cases, rather than rock the boat now, it may be a case of waiting for a more benign - or at least stable - economic and political environment.

Listen to the mood music and time your push accordingly. Focus on hitting your performance targets and being able to demonstrate how the activities you’re leading are contributing to business value and strategic goals: this will be the strongest calling card of all.

If you’re contemplating gaining a rise by moving elsewhere, it’s obviously key to look for evidence that any business you’re thinking about applying to truly values and is prepared to invest in technology. What are the trends in terms of the size of their technology team? Are they investing in new technologies - which may not only be about AI but also automation more broadly, as well as machine learning and data? In short, what evidence is there that technology is core to their strategic and operational vision?

Beyond these factors, look for a business where the challenges and priorities align strongly to your personal strengths and skillsets. Businesses have become highly selective – and usually have the luxury of considerable choice – so being able to demonstrate a granular skillset match is critical.

Another tack is to investigate a move into a sector that generally pays more than the one you are currently in. It is hard to break into top-paying sectors like financial services and fintech without a prior track record – but perhaps more feasible to move into other sectors that have begun to pay very competitively for senior technology talent including healthcare and, lately, aerospace and defence.

Overall, it’s encouraging that nearly a quarter of technology leaders have received inflation-busting salary rises of 10% or more in the past year. If you’re looking to join those ranks, research the market carefully, gather your evidence of business value generation, be prepared to wait for the right opportunity – and partner with a market specialist who knows the industry and can help you seek out a position that’s a good fit for you.

Helen Fleming is executive director and Peter Birch is director at Harvey Nash Executive Search