The demand for top technology leadership is surging, but companies that hesitate to adjust compensation strategies could find themselves priced out of the market. A recent Wall Street Journal article highlighted that the pay gap between job switchers and job stayers has narrowed to its lowest level in a decade.
In early 2025, job switchers saw an average pay increase of just 4.8%, barely outpacing the 4.6% increase for those staying put. This shrinking gap signals that companies are tightening salary offers even as competition for senior tech leadership heats up.
Insights from The National CIO Review suggest that firms seeking to secure top CIO talent will need to rethink this strategy. With a growing talent shortage in fields like AI and cybersecurity, CIOs are becoming more selective and companies that refuse to offer competitive compensation risk limiting their pool to active job seekers rather than attracting top-performing, seated CIOs.
This could create a leadership vacuum, where only firms willing to pay premium salaries secure the strategic talent needed to stay competitive.
Why It Matters:
Companies that fail to recognize the rising value of experienced CIOs may find themselves missing out on critical leadership and falling behind competitors that are more aggressive in securing top talent.
- Shrinking Pay Gap Threatens Talent Acquisition: The pay gap between job switchers and stayers has narrowed to just 0.2%, the smallest margin in over a decade. In early 2023, job switchers could expect an average 7.7% salary bump compared to 5.5% for job stayers, a significant financial advantage that made switching jobs an attractive option. Now, the difference is almost negligible. For CIOs and other senior leaders, this signals that companies are becoming increasingly cautious with salary offers. If firms maintain this conservative approach while demand for top-level tech talent increases, they could struggle to attract high-caliber leaders, particularly those who are already seated and not actively job hunting.
- Demand for CIOs Outpaces Supply: Despite overall salary stagnation, the demand for experienced CIOs is growing as businesses rely more heavily on technology to drive growth and innovation. According to The National CIO Review, 57% of Fortune 500 CIOs are external hires, with many companies looking outside their industries for strategic leadership. However, companies that hesitate to raise compensation may find themselves limited to candidates who are actively job-seeking rather than those who are already leading successful IT transformations. This shift could create a competitive imbalance where firms offering more aggressive compensation packages secure the best talent while others are left with second-tier candidates.
- Risk of a Leadership Vacuum: If companies fail to adjust pay scales to reflect the rising strategic value of CIOs, they may face a leadership vacuum at the top. The competition for CIOs is about the ability to attract leaders who can align technology with business strategy, drive innovation, and manage complex digital ecosystems. Firms that underpay or fail to provide competitive incentives may lose out to competitors who recognize the value of strategic IT leadership. This could leave businesses with inexperienced or misaligned leadership at a time when technological disruption is accelerating.
- Strategic Pressure on Hiring and Retention: With the growing importance of digital transformation, the role of the CIO has expanded beyond traditional IT management to include broader business strategy and innovation. Yet, the average CIO tenure is holding steady at 4.7 years, slightly above the C-suite average, indicating that companies recognize the importance of stability in tech leadership. However, competitive pressure from industries like finance and tech, where compensation packages remain aggressive, could lure seasoned CIOs away from less competitive firms. Companies that fail to match these offers may struggle to retain top talent and risk losing institutional knowledge and strategic momentum.
- Diverging Trends in Tech Compensation: While overall salary increases for job switchers have slowed, certain specialized tech roles are still commanding premium pay. For example, data scientists, AI specialists, and cybersecurity experts are seeing above-average salary increases due to talent scarcity and rising demand. This creates a paradox for CIO hiring: companies expect senior tech leaders to drive innovation in these high-stakes areas but remain hesitant to increase CIO pay to reflect this added responsibility. Firms that fail to bridge this gap could find themselves at a disadvantage, as top CIO candidates may choose roles that offer more competitive compensation aligned with market realities.
Go Deeper -> Job Seekers Hit Wall of Salary Deflation – WSJ
The State of Fortune 500 CIOs: Diversity, Tenure, and Hiring Trends – The National CIO Review
