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More jobs but no more pay say IT Directors

46% of IT departments to boost headcounts in 2010
98% of contractors had pay frozen or cut last year
Three times as many IT Directors plan to hire than fire personnel in 2010, finally bringing to an end two years of staffing cuts across the IT sector, according to research from ReThink Recruitment, the technology staffing company.

The research reveals that nearly half (46%) of IT Directors plan to boost headcounts in 2010 three times the number who plan to shed jobs (17%).

Despite more jobs IT workers are unlikely to receive immediate pay increases. 59% of IT Directors plan to freeze pay for staff in 2010, while 83% expect contractor rates to remain static.

IT workers have already suffered two years of pay austerity far worse than they had to endure following the dot com collapse. 71% of IT staff and 98% of IT contractors had their pay either frozen or actually cut in 2009!

This contrasts sharply with just 10% of all UK companies who have frozen pay during the recession.[1][1]

The research shows, however, that pressure to peg pay back is now abating. 39% of IT Directors expect to increase salaries for IT staff over the next 12 months while just 2% anticipate cutting wages further in 2010, according to ReThink Recruitment.

Only 5% of IT contractors are likely to see their hourly rates cut again in 2010 - a significant fall on the 25% of IT departments which cut rates in 2009.

Michael Bennett, a Director of ReThink Recruitment, comments: The good news is more jobs. The bad news is IT Directors intend to keep pay down. The majority of IT professionals have seen their pay decline in real terms over the last two years. While pay increases are likely to remain subdued in 2010, IT Directors are now switching from firing to hiring mode.

Despite IT Directors looking to keep a tight rein on pay, this could be difficult as the job market picks up. Hiring eventually feeds through to pay increases as the best quality candidates get snapped up.

He adds: Good quality candidates with the right skills are already difficult to find. As IT departments begin hiring again they will increasingly have to poach personnel from rival organisations, which will fuel rapid pay rises.

The research by ReThink Recruitment highlights just how much harder IT contractors have been hit by the recession than their colleagues in permanent positions. Numerous contractor rate reduction programmes were implemented last year and in many cases contract rates were slashed by 10% or more. This followed an initial round of rate cuts initiated by banks at the tail end of 2008.

Michael Bennett says: Contractors are more vulnerable to market fluctuations, so its no surprise they have been hardest hit by the recession. That said, with the job market now tightening rates for contractors should rise ahead of pay increases for permanent staff.

The research from ReThink Recruitment indicates that the market has now bottomed out and that demand for specialist skill sets is beginning to pick up. Demand for candidates with competency in C#, .Net, Java and LINUX has increased measurably over the last quarter.
Michael Bennett says: IT departments took a battering during the downturn, but the importance increasingly attached to IT as a core function suggests organisations are looking to invest in IT in order to capitalise on the recovery.

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