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Dutch businesses may be risking their digital future by failing to reward their existing IT staff with sufficient pay rises.
Demand for IT professionals is high, with almost all companies undergoing a digital transformation and needing the personnel to drive it.
But according to a survey by management consultancy Berenschot, carried out on behalf of Dutch IT trade magazine AG Connect, IT salaries for long-serving IT workers in the Netherlands increased by only 2.3% last year, whereas IT professionals who have changed jobs recently are receiving pay rises of up to 15%.
Hans van der Spek, manager of the human capital management (HCM) knowledge centre at Berenschot, said he expects the battle for IT professionals to erupt on the Dutch labour market. “This shows that people who change jobs can make substantial financial gains,” he said. “On the other hand, we see companies do not yet automatically include their loyal IT professionals in this remuneration correction.”
Van der Spek said this is because employers often have to deal with collective bargaining agreements. “If, for example, a hospital wants to increase the salaries of its IT staff, this means there may be complaints from, for example, nursing staff, who in principle fall under the same collective labour agreement,” he said. “This will have a restraining effect on salary increases.”
Berenschot’s survey was expected to reveal significant pay increases, said Van der Spek. “But it didn’t happen again – which surprised me.”
The average salaries of Dutch IT professionals have increased slightly over the past two years, but given the glaring shortage of IT professionals, the rise has been disappointing, said Van der Spek. “It almost seems as if employers don’t want to take their wallets out, and when they do, it’s to attract new people. The IT professionals who continue to do a job faithfully are not rewarded for their loyalty. If this continues, the Netherlands will soon see a huge exodus of IT personnel from companies.”
This year’s salary survey was the 20th conducted by Berenschot for AG Connect. Improving employment conditions other than salary can be a way to retain desirable IT professionals, but the study showed that this is not happening, despite increasing demand for IT talent.
In the survey, 79% of respondents said their terms of employment had remained the same in the past year, and only 14% said they had improved. A total of 2,682 Dutch IT professionals were interviewed, of whom 1,688 were employed.
Almost half of those questioned said they do not see a bright future with their current employer when it comes to improving terms of employment and salary. Strikingly, the positivity among IT professionals who are employed by an IT company is higher than that of IT professionals employed by a non-IT company.
Read more about digital transformation in the Netherlands
- A programme in the Netherlands is creating a smart neighbourhood as a pilot for how people could live in the future.
- Authorities are trying out blockchain to automate many of the processes related to waste transportation in the EU.
- The use of chatbots by Dutch organisations is on the up, with KLM’s chatbot a pioneering example.
Higher salaries appear to be the biggest motivation for IT professionals to change jobs, according to the survey. Van der Spek said: “Salary has almost always been one of the top three reasons for changing jobs, but this year it has been ranked number one. IT professionals who changed jobs last year increased their salaries by 10% to 15%.
“Companies run the risk of IT professionals and their knowledge leaving the organisation, at a time when companies face an enormous challenge to digitise the business.”
The survey also found that 34% of Dutch IT professionals feel they do not earn the market rate. “In the media, IT professionals read about the growing IT labour market and the enormous demand for IT professionals – so they are wringing their hands waiting for this huge pay jump,” said Van der Spek.
New IT professionals in particular can demand high pay levels, he said. “But I think it is important that Dutch companies do not forget their existing employees and reward them in the same way.”
Nearly two-thirds of the IT professionals surveyed who are not actively seeking a new job said they could do so if a good opportunity comes along. “Only 11% of IT professionals are actively looking for a new challenge, according to our research,” said Van der Spek. “That’s not surprising when you consider that, for most of them, jobs offers often come along.”
According to the survey, nearly 80% of respondents said they had been approached for a job in the past year and a quarter said receive a job offer every week – some even every day.
Van der Spek warned of the risks if Dutch organisations forget their loyal IT staff. “Throughout our economy, you can see that IT is an extremely important component,” he said. “It is wise for an organisation to ensure that it has sufficient capacity to cope with digital developments.”
When IT staff leave to earn more elsewhere, Dutch companies are left with the cost and inconvenience of having to acquire new knowledge and expertise, said Van der Spek. Or an organisation could be delayed in realising its business strategies, which will ultimately be at the expense of its competitive advantage.
“It is essential for Dutch organisations to ensure they attract the right IT professionals, but also to keep them and keep updating their knowledge so that they continue to retain their value for the company in the future,” he said.