Skills shortages to push up techology salaries

Appeared in: The Australian
Author: Jennifer Foreshew
Date: February 16, 2010

THE economic rebound will lift new hires and put upward pressure on technology salaries by mid-year, resulting in across-the-board rises of up to 5 per cent, on an annualised basis, data shows.

The country’s largest IT&T recruiter, Peoplebank, has predicted a skills shortage could return as early as mid-year, along with a jump in staff turnover as employees pursue contract work and higher pay.

In its review of salaries and contract rates, released today, Peoplebank says increases will be higher in jobs where there is strong demand, such as business analysts with banking experience in NSW and Victoria.

These roles could attract rises of 8-10 per cent annually.

In Canberra, market forces, including the federal election, are expected to push salary and contract rates down, but in Victoria and NSW, the choices available to candidates may mean some companies may have to pay above market rates to get good staff.

It notes the slower growth states of South Australia and Queensland and the ACT are expecting a steadier rise in demand as conditions improve.

The report finds salaries are yet to shift much on last year’s rates, but there is strong growth in the number of appointments.

It reveals contract roles rose by 20 per cent in NSW, by about 60 per cent in Western Australia and by more than 200 per cent in Victoria, compared with January last year. Demand for permanent roles was up by 20 per cent or more in those states.

In NSW, demand was being driven by the banking sector, with all four major banks investing in core systems upgrades and new projects designed to build competitive advantage.

In Victoria, demand was strongest in banking and the utilities sector, which was investing in smart metering.

In WA, major resources projects were generating both direct demand and flow-on demand from banks and businesses supplying the resources sector.

Many of these projects favoured contract rather than permanent contracts, the report says.

Peoplebank’s January review of salaries and contract roles involved more than 50 IT job categories. The recruiter reported 40 of its top 50 clients — Australia’s largest banking, government and enterprise IT users — hired in January, and flagged their intentions to do so in coming months.

Peoplebank chief operating officer Peter Acheson said the upward pressure on salaries and contract rates could result in more turnover.

“As the employment market strengthens, many employees will look at moving, and part of the reason is that some companies handled the downturn and all the issues around that really well, and some others didn’t,” Mr Acheson said.

“So 2010 will probably be a year when there is considerable employee churn as well.”

Based on current demand, a skills shortage would be evident by mid-year, he said, especially for contract workers with business analysis, project management, Web 2.0 skills and experience in the banking, utilities and resources sectors.