Inflation negates growth in average IT pay

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Inflation negates growth in average IT pay

Karl Flinders

IT salaries grew by an average of 4.3% in 2011, compared with an average of 2.3% across all sectors, with the average IT salary exceeding £40,000.

But the high inflation rate meant the salaries actually dropped in real terms.

According to research from ReThink Recruitment, IT salaries jumped by 4.3% but the retail price index inflation averaged 5.2% in 2011, meaning average real earnings fell by about £360.

“Although pay for IT staff has shown positive growth over the past 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,” said Michael Bennett, director at ReThink.

Some 59% of IT directors told ReThink they expected pay to rise in the IT department in the next 12 months – the highest level since the collapse of Lehman Brothers.

“IT directors are finding it increasingly difficult to retain and motivate staff with years of back-to-back pay freezes. While 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,” said Bennett.

IT pay increases have outpaced pay rises for the average UK worker over the past five years. The national average wage has increased by 13.7% over the past five years, from £21,160 in 2006 to £24,050 in 2011, while the average IT pay increased by 16.3% in the same period, from £34,500 in 2006 to £40,140 in 2011. 

ReThink revealed that average IT pay has been boosted by increases in retail and some areas within financial services which have rocketed over the past year.

“Staff working on mobile commerce 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 e-commerce. Typical pay for an m-commerce project manager is £600 per day,” said Bennett.

 


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