In praise of stability

Annual IT salary surveys used to be awaited with some eagerness, as disturbing wage trends upward or downward make for startling headlines. The J-curve of skyrocketing IT salaries has dipped somewhat, as has the news value of salary surveys.

Annual IT salary surveys used to be awaited with some eagerness, as disturbing wage trends upward or downward make for startling headlines.

The J-curve of skyrocketing IT salaries has dipped somewhat, as has the news value of salary surveys. But as a yardstick, a guide of what we ourselves are worth and what we should be paying our staff, surveys remain as important as ever.

The New Zealand IT jobs market appears to be something like a ship, not so much steaming ahead or drifting, but charting a steady course, mostly avoiding the choppy waters and violent economic storms being experienced abroad.

Just as we avoided the boom, so we too appear to be avoiding the bust. Both employers and recruiters tell me that New Zealand has avoided the excesses of our colleagues in Australia, Europe and the US.

Indeed, such volatility can only be bad news as it makes planning long-term projects more difficult and uncertain. And uncertainty is the enemy of progress. Just how do you cost and justify a scheme if you don't know whether those contractors will have to be paid $50 an hour or $100 an hour?

In addition, reasonable pay stability makes for a happier workplace. Auckland software development firm StayinFront says in recent years it has held off from paying excess wages to get new recruits, preferring to leave posts unfilled if staff could not be had for a "reasonable" salary.

Its argument was that higher-paid newcomers would upset the established pay scales at the company, existing staff becoming upset unless the firm went through a costly catch-up process. Similarly, if a depressed market means paying newcomers significantly less -- StayinFront told me that while a slack job market means job seekers are more willing to work for less, it tries not to take too much advantage of it -- they would be not be happy to discover their colleagues were earning more for the same work. And neither would existing staff be too happy if this signalled where their pay would be heading.

This and New Zealand employment law, which forbids the cutting of agreed salaries for permanent staff, explains much about why Kiwi salary rates are relatively stable compared to the fast moving and flexible contracting market.

When Computerworld wrote about aspects of this over the summer, it led to comments from some contractors about falling rates and complaints about immigrants pushing rates down.

In Australia these issues have again come to the fore in an IT jobs shake-out that seems far worse than anything here. Computerworld in Australia reports that despite a boom in construction and consumer industries, the corporate world there is suffering, IT taking a major hit. Thousands are being laid off, IT workers are having to take non-IT roles and contracting rates are dropping down close to full-time rates.

The Australian newspaper last month reported that some contracting rates have dropped by two-thirds, fulltime permanent rates are also dropping for new recruits and the IT industry as a whole is reporting its wages growing at a slower rate than the rest of the economy -- another first.

If nothing else, our more stable market means employers are more likely to find truer values of what they need to pay and workers more likely to find what they are truly worth.

TMP uses this argument in changing the format of its six-monthly IT Renumeration Survey, formerly the Lampen Salary Survey, from producing an average income figure for a job role to a salary range. TMP argues that a range more accurately reflects the level of skills an experience a candidate possesses. Thus a lesser skilled person will be at the lower end, a more skilled person at the upper end.

Robert Walters agrees and it too produces a range of figures for salary survey, the latest of which was issued in June and is posted on the Robert Walters website.

There is some divergence between salary estimates it produces and TMP (whose survey will also go online this week), but I guess a range of ranges still helps.

Greenwood is Computerworld's human resources reporter. Send letters for publication to Computerworld Letters.

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