IT salaries in Sacramento jumped an average of 11 percent in 2007, outpacing technology power centers like Silicon Valley and Boston, which experienced a 4 percent rise, and pushing far beyond the national average increase of 1.7 percent, according to Dice.com’s annual salary survey.

The reason may be twofold: the state of California has embarked on numerous, multi-million-dollar technology projects in the last couple of years that has generated a demand for IT labor. Furthermore, people escaping the costly San Francisco Bay area could be migrating to the cheaper nine-county Sacramento metro region.

"IT folks tend to hold on to their value. They don't expect their salaries to go down and that puts some upward pressure" on salary demands, says Dave Sanders, a managing partner with WorldBridge Partners, an executive search firm, based in Roseville, CA.

Sacramento's salary spike may be attributed to the state government. Over the last several years, the state has undertaken a number multi-million-dollar technology projects ranging from system upgrades to replacements that include departments such as the Department of Corrections and Rehabilitation; the Sacramento Municipal Utility District.

"Right now, a lot of technology skills are in demand, such as project managers, business analysts, database administrators, quality assurance and testing specialists, change management and security consultants," reports Brian Gegan, vice president of technology at Sacramento-based Eyefinity, which creates practice-management solutions for eye-care professionals.

J.D. Stack, chief executive of the nonprofit Sacramento Area Technology Alliance (SARTA), agrees. "My impression is that the state government has been increasing expenditures for IT services and, since we are the state capital, a number of companies service the government sector," he says.

According to the Dice salary survey, the average IT salary for Sacramento is less than Silicon Valley's but slightly ahead of Boston's. Sacramento respondents reported an average salary of $83,410 in 2007 compared to $75,197 in 2006. Silicon Valley's average salary was $93,876 in 2007, while Boston's was $80,400.

Technology executives say Sacramento actually has an IT talent shortage due to the state’s technology projects.

"Some large consulting firms have had to fly in people because the local workforce can’t do all the work," Gegan says. "In a couple of years, the (salary) spike may ease as these projects are completed."

Maybe so, but Eyefinity is in the midst of its own expansion project. The company, which employs 90 people - including 30 technologists - plans to increase its IT workforce by about 25 percent within the next four months. And no, it doesn't have immediate plans to outsource.

"Organizations are having mixed results with outsourcing," believes Gegan. "A number are finding the communication challenges and time zone changes are making it difficult to complete projects on time. Outsourcing has not been universally successful."

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