IT pay rates stabilise in 2005

The findings from the latest iProfile/ATSCo Skills Survey (quarter 3 2005) showed that IT pay rates stabilised during 2005. IT contractors saw their market value remain steady at a median of 40 per hour in 2005 whilst Permanent IT staff saw their salaries rise slightly to a median of 34,375 per annum.

Employment prospects still appear to be good and although a slightly higher percentage of IT staff reported being out of work during the third quarter of the year (9% compared with 8% in Q2.05), the percentage is still significantly below that recorded during the final quarter of 2004 (12%).

Ann Swain, CEO of the Association of Technology Staffing Companies (ATSCo), commented: After seeing a recovery in the overall pay rates of both contract and permanent IT staff during 2004, the last year has seen pay rates stabilise. In particular, contractor pay rates remained static for four consecutive quarters and they are now earning the same pay rates as they were at the start of 2002. Permanent IT staff have seen a marginal increase in pay rates over the last year and are now earning 7% more than they were at the start of 2002.ì

The longer-term trend for rates also remains positive. Swain continued: ìFeedback from ATSCo members is that the market will continue at a similar rate of growth in 2006 as it did in 2005. The great news for IT professionals in specialist skill areas, such as JAVA, C#, and .NET, is that the market will become even more candidate-driven.

The UKís leading IT recruitment companies provided the following commentary on the market:

îThe demand for IT contractors slowed in the middle of 2005, but in recent months Spring has witnessed a resurgence in demand, although not yet up to the levels seen at the end of 2004. Pay rates for contract IT professionals have remained relatively level during the year, but in certain skill sets where demand has been growing, for example business analysts, system testers and project managers, there has been some uplift. The growth in demand for these roles is being driven largely by investment in new systems.

The demand for permanent IT professionals has increased in the second half of the year, with the demand for developers leading the way, particularly those with skills in Java, .Net and networking, especially Cisco. There has been some increase in salary levels in these areas of growing demand, but overall, permanent salaries have remained relatively static throughout 2005.

In line with the Chancellorís recent downward revision to the forecast rate of economic growth over the next year, Spring expects that the demand for IT professionals will continue to be tight during 2006. Demand is also likely to vary from sector to sector, with declines in manufacturing and slight increases in demand in financial services and the public sector. The issue facing employers is that for those skills in particular demand it will increasingly become a candidate driven market.î

Simon Holt
Group Marketing Director
Spring Group plc


ìThe last quarter of 2005 has seen a strong uplift in demand for experienced permanent and contract IT staff and this is set to continue into 2006.

This growth is fuelled by an overall improvement in the economy and increased budgets for technology investments that can provide revenue growth as well as greater efficiencies.

As a result of this, the demand for project management skills is increasing, as is the need for people with the regulatory skills to ensure that organisations comply in this area. Salaries and rates have shown a modest increase in 2005, but we are not yet seeing a return to the íbidding warsí of the late 90ís.î

Louise Smith
Director
JM


ìWe saw a definite increase in employer confidence in the last year, which resulted in a marked uplift in the demand for many IT skills across both permanent and contract sectors. The most sought after skills have tended to be JAVA, C#, web logic and .NET based skills, particularly in the finance sector.

The roles that have been most in demand have, by and large, been Developers and Designers, Business Analysts, Project and Programme Managers.

The increased demand combined with a shortage of candidates has meant changes both for us and for employers. We have to be more resourceful in finding the really good candidates and clients, for their part, have had to pay higher rates and salaries but more interestingly have demonstrated greater flexibility. They are much more willing to cross-train good candidates who have the necessary business knowledge but may lack the exact technical skills.

2005 has been a good year for Volt Europe and we expect the market to continue to improve over the next year. We anticipate that the financial services market will continue developing new products and overhauling old systems so that they can maintain their competitive edge. The demand they create will in turn have a knock-on effect on other sectors.î

Stephanie Elliott
Managing Director
Volt Europe