Offshoring widens pay gap between IT professionals

The wage gap between senior and junior IT professionals is widening as businesses continue to outsource basic IT development and support overseas.

The wage gap between senior and junior IT professionals is widening as businesses continue to outsource basic IT development and support overseas.

The latest Computer Weekly/SSL Quarterly Survey of Appointments Data and Trends shows that salaries for business-focused IT professionals are rising at a faster rate than salaries for technical specialists in both permanent and contract work.

The survey provides further evidence that a two-speed job market is developing in which junior programmers and support specialists are seeing their salaries eroded.

"If you are looking at infrastructure designers, infrastructure planners, project planners and line managers, they are an integral part of business, whereas the code crunchers are not. Software development has increasingly been outsourced," said George Molyneaux, director of SSL, which conducted the survey.

Over the past 12 months, pay rates for senior staff have risen by an average of 1.4%, compared with rises of 0.3% for junior staff. And pay rates for senior contractors have grown by 6.2% - more than three times the rise for junior contractors.

During the same period, the number of job vacancies advertised for junior contract IT staff fell by nearly 10%, as more basic programming jobs are transferred overseas.

However, demand for senior permanent posts rose by 12%, highlighting the growing need for businesses to hire experienced staff to manage outsourcing agreements with suppliers and provide strategic advice.

The trend has accelerated as software houses continue to outsource a growing proportion of their work offshore.

This has led to a decline of 7% in the number of vacancies advertised by software houses over the past 12 months, compared to a 20% rise in advertised vacancies overall.

Another notable development is that graduates from Eastern European countries are beginning to undercut Indian programmers, said Molyneaux.

"On large-scale systems, particularly in finance and government, the pay gap is going to accelerate for two reasons: availability and costs. Asia seems to have an abundance of graduates with experience in developing .net and C#," he said.

Overall, demand for senior systems staff, particularly consultants, has risen most strongly over the course of the year, up by 30% over the past 12 months. But demand for junior staff has fallen by 8%.

Read article: Offshoring transforms the market

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