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IT staff pay jumps by 4.3% over the last year

IT staff pay jumps by 4.3% over the last year

•              But decline in real terms

•              Some sectors enjoying double digit pay increases

IT salaries jumped by 4.3% over the last year, easily outstripping the 2.3% rise for all UK jobs according to ReThink Recruitment, the business and technology staffing company.

According to ReThink, the average wage for staff working in IT was &pound40,140 in 2011, up from &pound38,500 in 2010.*

However ReThink explains that, with RPI inflation averaging 5.2% in 2011, this equates to a decrease in real earnings of approximately &pound360.

According to ReThink, the average UK salary in 2011 was &pound24,050, a 2.3% rise from 2010, when the average salary was &pound23,505. ReThink explains that this equates to an annual earnings loss of approximately &pound675.

Recent research from ReThink’s annual IT Directors survey has shown however that pay prospects for IT staff over the next 12 months are at their highest levels since the collapse of Lehman Brothers, with 59% of IT Directors polled expecting pay to rise within their departments over the next year. 54% of IT Directors polled had increased pay for staff in 2011.

Michael Bennett, Director at ReThink says: “Although pay for IT staff has shown positive growth over the last year, runaway inflation will have eroded take home pay. Salaries for many IT staff have actually fallen in real terms over the last year. However when compared with the average UK worker, IT staff salaries are still ahead of the game. ”

ReThink adds that over the longer term pay increases for IT staff have also outpaced pay rises for the average UK worker. The national average wage has increased by 13.7% over the last five years, from &pound21,160 in 2006 to &pound24,050 in 2011. Over the same period the average IT pay increased by 16.3%, from &pound34,500 in 2006 to &pound40,140 in 2011.

Michael Bennett says: “Pay for IT workers is now recovering well. Many IT departments had a torrid time during the downturn, with some severely pared back. Those who stayed in employment may have felt that asking for a hefty pay rise in such a volatile economic climate was just a step too far.”

“IT Directors are finding it increasingly difficult to retain and motivate staff with years of back-to-back pay freezes. Whilst recent pay awards may have been fairly paltry, there are signs that IT Directors now feel that the worst of the downturn is behind them and pay growth will really start to accelerate.”

Signs of improvement

ReThink explains that pay for IT staff within some sectors – such as retail and some areas within financial services – has rocketed over the last year.

Staff working on mobile commerce (“mCommerce”) IT platforms – which ensure that retailers’ apps for Ipads, tablets and smartphones are as optimised as possible – are paid 20% more than their contemporaries with comparable skills and experience working in ecommerce. Typical pay for an mCommerce project manager is &pound600 per day.

Michael Bennett says: “We have seen a surge in demand as retailers invest in their mobile offerings. This is now at the very top of the priority list for all major retailers, with many deeming this far more critical than more traditional areas of spend, such as store refits. Retailers see mobile commerce as a very exciting new revenue stream.”

ReThink adds that whilst overall demand for IT staff within financial services has been hit hard the downturn, there are some niche areas that are bucking this trend.

Solvency II is an EU-wide directive that overhauls capital and reporting requirements for insurance companies. Insurers have admitted that they are struggling to deal with the workload created by such complex and far reaching changes.

Insurers have to provide regulators with their Solvency II implementation plans by the middle of 2013 and many will have to invest heavily in IT systems.

Says Michael Bennett: “A shortage of candidates with Solvency II modelling skills has meant that pay has rocked over the last few years. Senior specialists are typically earning in excess of &pound150K, or &pound1,000 per day, and pay packages are showing no signs of falling.”

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