IT salaries starting to move up as firms invest in new development

Pay rates for permanent and contract staff are beginning to rise as organisations step up development work after more than three...

Pay rates for permanent and contract staff are beginning to rise as organisations step up development work after more than three years of stagnant IT spending.

Demand for IT staff with development skills, specialist technical skills and business knowledge is pushing up salaries for professionals with the right mix of qualifications and experience.

During the first three quarters of 2004 contract rates rose by an average of 5%, and permanent salaries rose in 25 out of 45 roles monitored by Iprofile and the Association of Technology Staffing Companies.

Organisations have stepped up their recruitment of staff with development skills in Java and its rival .net, the Iprofile/Astco survey of 4,000 IT professionals found, reflecting growing investment in e-commerce.

"There seems to be a lot of business-to-business development work going on," said Alex Charles, business development director of recruitment firm The Skills Market. "I think we will see a steady but slow rise in .net and Java, and maybe a levelling off towards the end of the year."

Average pay rates for staff with Java skills rose over the first three quarters of 2004, with wages for Enterprise Java Beans experts up 14%, J2EE up 10% and Java Swing up 13%. Demand for Oracle, DB2 and SQL Server development and security-related skills, such as Cisco Firewall expertise, is also strong, recruitment specialists said.

"Security is a big issue, particularly in consumer portals and business-to-business. A lot of it is in secure network design and firewall implementation, driven by companies going online," said Charles.

Jason Power, UK recruitment manager at IT staffing firm Glotel, said demand for staff with project skills such as system development, migration and integration is increasing as organisations begin new IT projects.

Specialised skills are commanding the highest premiums, the survey revealed. Average salaries for professionals with experience on the Liffe financial platform have reached £76,500, reflecting the small pool of specialists with this skill. Professionals with Oracle HR skills are also at a premium, with salaries averaging £61,500, as many companies consider moving to Oracle HR systems following the company's takeover of rival Peoplesoft.

Other high-paying skills include Super Project, a legacy project planning tool with a limited pool of practitioners, and the Corba programming language.

IT professionals working in the consumer goods industry were the biggest winners, where average salaries rose by 23% to £45,000 during the first three months of the year. Average pay rates for IT professionals in property and real estate rose by 19% to £28,000.

"Some businesses are making extraordinarily good profits. They have got the money to invest. As organisations such as Tesco consolidate, they are going to be looking to consolidate their supply chains. I can see huge potential for IT projects in those organisations," said Charles.

Salaries are highest in London, averaging £35,000, followed by the South East at £32,000, the East of England at £31,000, the North West and Humberside at £25,000.

Pay rates rose fastest in the East Midlands and the South West, but rates fell in the North West and North East.

Support roles, however, are continuing to decline, with average rates for helpdesk support down 28%, and second- and third-line support roles down 9% and 7%, reflecting the transfer of these skills offshore.

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