22 November 2002 Salary growth among the UK’s IT professionals has slowed to its lowest level for a decade, new research has found.
Total salaries have grown by an average of 3.7% during 2002, down from 4.9% last year, according to a study by the National Computing Centre (NCC), an IT industry body.
The NCC report says it is the smallest increase since the UK economy was in recession in the early-1990s. “There are striking similarities between some of the figures presented in this year’s survey and those reported during the recession,” it says.
Worst hit generally were staff working in the IT and manufacturing sectors, which reported salary increases of 2.3%. But some organisations reported no salary increase at all.
Looking ahead, the NCC’s overall outlook remains cautious. “With fewer organisations predicting [staff] shortages in the next two years, we don’t expect to see a return to the rapid increase in salary levels or the IT staffing difficulties of the late-1990s just yet,” says the report.
Nevertheless, the NCC predicts that demand for IT staff will grow by 7% over the next two years. That remains in stark contrast to the skills shortage of the late-1990s, however, when demand increased at a level of up to 15% a year.
The study also found that more organisations are retaining permanent staff, rather than bringing in outside contractors. The proportion of respondents that employ contractors fell slightly, from 31% in 2001 to 29% in 2002.
But, despite the report’s generally gloomy tone, some sectors of the economy are reporting unprecedented demand for IT staff.
In particular, the health and education sectors will see growth rates of 18.4% over the next two years, according to the NCC. Government organisations surveyed reported the greatest difficulty in sourcing skills at present – with almost one-in-three facing recruitment challenges.