IT pay is growing

January 2007

Money changing handsComputer Economics Limited has produced IT pay surveys for the UK for the last 39 years. The most recent results of their work - covering over 55,000 IT staff in over 530 installations - are summarized in this article by managing director, Paul Campfield.

Like virtually all areas of employment in the UK, the IT profession has not been immune to the general slow-down in growth of earnings over the past five years or so.

The heady days of the lead-in to the millennium, when so many organisations feared that everything that was computer-dependent would go pear-shaped when the clock struck midnight on 31 December 1999 and were prepared to pay big money in the hopes of avoiding disaster, are now but a distant memory.

That said, maybe 2005 witnessed a turn around in the fortunes of IT staff when their pay growth showed a year-on-year increase for the first time in several years,

This upturn was confirmed in 2006 when the year-on-year pay growth showed a further increase, but only in terms of overall earnings; growth in base pay was lower than that recorded in 2005.

The evidence of the past two years is therefore inconclusive as to whether IT pay is growing significantly, but it is growing and the future remains financially bright.

Although a clear downward trend in pay movement is evident, pay is not all static in the profession, pay movement has merely slowed down, reflecting the decline in inflation both in prices and in wages across the economy as a whole. IT is still a well-paid area of employment both to enter and in which to carve out a career.

Indeed, staff at the entry level of the IT profession still consistently enjoy higher rates of year-on-year increases in the earliest years of their career (in 2006 they received increases in average earnings of 6.6% and in average salaries of 6.2% - in the case of overall earnings about 35% more and in the case of salaries about 65% more than that received by all IT staff taken as a whole).

Part of the reason for doing relatively well in the early years might have to do with starting at modest pay levels upon entry as shown by the national average salary levels recorded in our November 2006 survey:

National average salary levels (recorded in November 2006 survey)

Job level Average salary
Trainees   

£18,253

Junior Analysts

£21,687

Analysts

 £29,055

Senior Analysts 

£36,759

Project Managers

 £43,334

Consultants

 £47,869

Department Managers

 £61,218

IT Function Heads

£72,192

IT Managers

£86,800

IT Directors

 £108,610

The industry sectors currently showing the highest rates of pay growth are Hi-Tech firms, business services and consultancies and also organisations in the public and voluntary sectors, such as local authorities and charities.

In the case of public and voluntary sector employers they are perhaps starting to catch up after years of operating with pay rates that were markedly lower than those enjoyed in the private sector. They are now increasingly finding that they have to compete more directly with the private sector for staff, especially those with IT experience.

In addition to pay, IT staff enjoy a range of benefits from their employment: most could expect to commence employment with 25 days’ paid holiday per year (rising with service to 30 days) and at least 85 per cent of entry level staff could find themselves in roles that qualify for overtime payments.

Pension scheme cover will be available, costing the new employee an average of 5 per cent of salary (and - cheerful subject - life assurance cover of four times salary will usually be provided, payable in the event of the individual dying whilst in the employment of the organisation); around 50 per cent of entrant staff might enjoy private medical cover partly funded by their employer (although not in the public or voluntary sectors); but bad news for petrol heads - company cars and/or cash for car allowances are very much a minority provision at the junior levels of the IT profession: generally only around 5% gets this benefit (and then only if they need to travel to carry out their work).

IT employers still report challenges in recruitment - at least half of employers experiencing difficulties in attracting suitable candidates with the specialist skills they seek.

Whilst the evidence may point to a largely settled employment market for IT staff (stabilisation in earnings and in staff turnover, especially those voluntarily leaving their employer) IT employers still report challenges in recruitment - at least half of employers experiencing difficulties in attracting suitable candidates with the specialist skills they seek.

The key skill areas appearing to be required in order toreach the top pay levels, where pay levels are significantly above average IT pay levels, especially at junior levels, are:

  • JCL; RPG400; Visual Basic;
  • MS.NET;
  • DB2; data warehousing; MS SQL Server MS SMS;
  • DEC-VMS; Apple;
  • Cisco; Voice over IP; CICS; TCP/IP;
  • SAP; Oracle-CRM;
  • Prince2; Business Objects.

So, overall, the message seems to be that working in IT can bring worthwhile rewards in pay and benefit terms throughout a career, provided that the graduate is prepared to undergo continuous personal development.

Most employers will also wish to ensure that their IT staff remain up to speed with all technological developments as various new languages/methodologies come into vogue.

Generally the employer will be prepared to invest in training existing staff in any new technology that is critical to their operation so the graduate can reasonably expect a lifetime of technical challenge to stimulate them in the ever-developing world of IT.

The Computer Staff Salary Survey is only available to participating companies on a subscription basis. Further information: www.celre.co.uk

This article was written for the 2007-2008 edition of Inside Careers: www.insidecareers.co.uk.Inside Careers logo