Salaries Catch Fire In Southeast, Top Out In California

"I think demand is rising. We're not having the people leave. People are coming here. Atlanta is going to grow to the size of Devner in the next 20 years," said Michael Kogon, CEO of Definition 6, Atlanta. "The fastest-growing counties in the country are in Georgia."

When asked if the compensation numbers matched his experience, Stephen Myers, president of Infinetwork, a systems integration firm in Naples, Fla., responded: "I wish. Ours was 14 percent."

Myers said that was because his 13-employee firm has been hiring and firing to find the "right people" to help drive its transition into managed services, and he has hired five people in the past six months. Myers also said the going billable rate he can charge in his secondary market has remained firm at $115 an hour, unlike in some more competitive markets.

Rising wages in the Southeast did not appear to be a case of catch up. The region's average salary of $104,060 was second only to California, the salary leader for several years running.

California's already sky-high average salary level of $123,100 may have had something to do with an apparent slowing in wage growth, though. Compensation grew an average 2.9 percent in the state, down from 11.2 percent the prior year and was the lowest of any region, according to the survey.

"Especially here in California, you cap out. You can't give additional base salary raises because the billable hours and what you can get in the marketplace don't justify it," said Alan McDonald, president of All Connected, a managed services solution provider in Simi Valley, Calif.

His company turned to means other than raises to compensate engineers, including providing training, company cars and new computers. "I've found in general that a lot of times motivation of engineers can be done through a lot of things," McDonald said.