Mid-level staff win higher salaries as outsourcing grows

News Analysis

Mid-level staff win higher salaries as outsourcing grows

Rebecca Thomson

The growth of outsourcing over the last decade has led to greater demand for mid-level IT staff than ever. Companies are racing to employ staff capable of overseeing and managing teams, while lower-level development jobs are increasingly outsourced to UK and international companies.

One result, as recent research has shown, is a surge in mid-level pay as demand grows and supply dries up. As India, China and others continue to provide many of the programmers and developers the UK needs, companies need more experienced staff to oversee project work and manage disparate teams.

Data provider Salary Services Limited says project managers and project leaders have seen the most dramatic the most dramatic pay increases over the last five years. In 2003, project leaders were paid an average of £38,748, compared to £47,605 this year, an increase of 18%. Project managers were paid £45,076 in 2004, which has increased by 12% to £51,368 this year.

Problems have arisen for IT directors seeking to employ these mid-level managers for two reasons. With a high proportion of entry-level jobs outsourced to other companies or countries, there are fewer developers coming up through the ranks and less competition for the more experienced roles. This has pushed up pay as companies try to attract the best staff.

George Molyneaux, research director at Salary Services Limited and jobadswatch.co.uk, says there is a shortage of UK-produced developers. "There is especially a lack of skills like C# and .Net, because there's been a lot of outsourcing. Outsourcing the jobs is a fundamental problem because there's then a lack of incentive to get into IT."

But while development jobs have been sent offshore, George Molyneaux says it has been "critical" to keep project managers in the IT department.

IT directors' have another problem with declining numbers of computing graduates. According to figures from university admissions service UCAS, the number of applicants to IT-related degrees has dropped 48% in six years, from 29,477 in 2001 to 15,258 in 2007.

Recruitment experts say it is crucial the industry works harder at attracting students if it doesn't want the current shortages to get any worse.

Ann Swain, chief executive of the Association of Technology Staffing Companies, says offshoring has removed the "bottom rung" of the IT career ladder.

Ann Swain says: "Outsourcing entry-level IT jobs has meant fewer graduate-level jobs are available in the UK.

"The shortage now is of candidates with a few years experience looking for second and third jobs. But how do you get that experience if entry-level jobs are being sent offshore?"

The answer is better PR and marketing, according to Michael Bennett, director of recruitment company Rethink Recruitment. The industry needs to tell young people there are plenty of jobs available, and change their perception of IT as a "boring" career choice.

"The industry has historically been pretty poor at selling IT as a career. Good quality graduates are getting snapped up, so we need to tell them there is a demand for IT people and that working in IT doesn't necessarily mean programming,"


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