War for talent hotting up in the IT sector, research finds

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Salaries and rates for IT professionals are continuing to rise, two different surveys of the sector have found.

Skills gaps and concerns about retention are driving pay rises in the sector, and a gap exists between resourcing capacity and expected activity, the ReThink Recruitment IT directors’ survey of more than 1,500 professionals has found.

The seventh annual ReThink survey highlights that salaries have continued their upward trend after a challenging period during the global recession. The majority of directors (65%)  reported salaries grew in the last twelve months, with a further 95% reporting contractor rates had either increased or remained stable during this time.

This rise in pay looks set to continue throughout 2014, with 27% of those surveyed predicting contractor rate rises and 69% expecting to increase permanent salaries. With staff retention remaining a critical concern – 66% of respondents stated this was a significant concern – salary increases look set to continue over the coming months.

Separate research carried out by umbrella services company giant group found that 71% of the professionals it surveyed believe rates for IT contractors will increase over the next year, up 6% on last year’s predictions. A further 52% expect contracting opportunities to increase over the next year. In particular, financial services and the public sector remain two of the biggest areas using IT contractors.

The ReThink report also identified a clear gap between predicted workload over the next year and the capacity of current resources. Seventy seven per cent of respondents expect to see an increase in workload over the next year, but only 47% expecting a rise in budgets. The report claims it’s unsurprising that 52% of directors do not feel they have the capacity to increase output with current staffing levels. 

“In an industry where talented specialists are always in high demand, it will certainly prove challenging for many directors to keep their top performers and, indeed, attract new experts,” said Michael Bennett, managing director at ReThink Recruitment.

“While the UK economy continues to show signs of positivity, it seems the IT arena still has a number of challenges to contend with. The next year, then, looks set to be extremely busy for IT professionals.”

Managing Director of giant group, Matthew Brown, added: “It’s extremely encouraging to note so many contractors are feeling optimistic about their pay prospects and future work opportunities. With the ever-present gap between demand and talent supply, such niche experts will understandably be highly sought-after. And with ongoing investment in areas such as big data and mobile, the need for professional contractors will only continue to intensify.”