Salary slowdown only temporary: recruiter

Pay rates are likely to rise again soon, Hudson predicts

Despite the ongoing skills shortage, growth in IT salaries has levelled out in the past year, after rising 2-5% in 2006.

That’s one of the findings of the 2007 Hudson IT&T Remuneration Guide, which was released last month.

Hudson IT&T practice leader Campbell Hepburn says the brake on growth has occured because organisations are no longer viewing IT as a specialist discipline that commands a premium over other functions.

“Talking to employers about what’s going on, it appears that from their point of view, IT is mainstream — it’s just another job and isn’t driving salaries the way it used to.

“It’s not a specialised area and is more integrated into the business.”

The writing has been on the wall for a slowdown: 12 to 18 months ago, employers were saying they couldn’t sustain the growth in IT pay, Hepburn says.

However, some IT professionals, such as .Net developers, network architects and enterprise architects, are still experiencing significant pay growth, due to high demand from employers, he says.

Network architects are also in high demand and are commanding increasing pay rates because there’s a lot of investment in networks and infrastructure going on, especially in the public sector.

“Organisations will pay for those skills,” Hepburn says.

Another trend picked up by the survey is an increase in contracting.

“Typically, someone will go contracting after four or five years’ experience working fulltime, but now people are doing after 12-18 months,” he says.

“Demand is driving it — the demand for the resource is there and younger people are jumping into it.

“It’s that Generation Y attitude, where younger people aren’t so concerned with job security — it’s about the project and the technology.”

The shortage of local candidates suggests employers should be looking overseas for skilled labour, but that isn’t necessarily the case — as the Remuneration Guide notes, “many employers continue to demand that candidates already be present in the local market. As this is not always realistic, our advice is for employers to take a long-term approach, ideally working with a recruitment partner.”

Hepburn says restricting hiring to candidates with New Zealand experience is unrealistic in light of the current and projected skills shortages.

“The government is forecasting 35,000 unfilled jobs in the ICT market over the next 10 years, so you’ve got to look at alternative talent pools.”

Seeking out staff by advertising overseas and then bringing them through the immigration process is difficult, he acknowledges, but with a thorough recruitment process in which new overseas hires are inducted properly, it can work well, he says.

“Everyone should be prepared and willing to do it, instead of looking to the government to create solutions.”

Hepburn believes the slow-down in IT pay rates is only temporary, and that salaries and contract rates will start moving upwards again in the future.

“According to the Department of Labour’s Job Vacancy Index, IT job ads in the public domain are up 22% on last year.”

That figure, combined with ICT’s continued topping of another regular survey by Hudson, that measures hiring intentions across all sectors, means that “if we’ve seen salaries stablise, we’ll see them jump again.

“The pressure will come on.”

The Salary Guide also notes “There appears to be no single factor driving activity in the Information Technology and Telecommunications sectors.Government commitment to growth and innovation, sustained investment in local infrastructure, the development of people and the increased number of technology upgrades all combine to drive demand”, and that “Candidates are choosy, basing their employment choices as much on the interactions they have with prospective employers as on the brand or nature of work and technology they offer.”

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