IT salary increases have slowed to a crawl, with a significant number of companies freezing pay levels over the last 12 months.
Increases in salary, staff turnover and demand for technology contractors have all slowed to levels similar to those reported in the early 1990s, according to the latest Salaries and Staff Issues in IT survey from the National Computing Centre (NCC).
On average, total IT salary levels increased by 3.7 per cent in the UK during 2001, compared with a 4.9 per cent increase in the previous year. IT professionals in the UK now earn an average salary of £29,217.
But pay increases have been far from uniform: a significant number of respondents reported no pay increase in the last year and, at 2.3 per cent, the IT and manufacturing sectors reported the lowest salary increases.
Regional variations were also marked. Employers in Greater London reported the highest average salary increases at 4.4 per cent - to £34,785 - compared with a disappointing 2.9 per cent increase in south-west Wales.
And while most of the 470 respondent organisations expect the demand for IT staff to grow seven per cent over the next two years, this is much lower than the 10 to 15 per cent growth rate typically predicted in the past.
But the survey also highlights pockets of high demand for IT staff across the health and education sectors, where 18.4 per cent of employers anticipate taking on new staff over the next two years.
Internet and intranet skills dominate new skills requirements for the third year running. And while Java and XML top the web skills wishlist, .Net skills are also starting to make their mark.
Companies still favour training existing staff to buying in new skills, but less so than last year. Most respondents - 69 per cent - plan to train existing staff in new web skills, compared with 75 per cent last year, and 38 per cent said they would recruit the staff - 10 per cent more respondents than in 2001.
Christine Jack, research manager at the NCC, told vnunet.com: "Looking at the trends there are striking similarities between some of the figures presented in this year's survey to those reported during the recession of the early 1990s.
"With fewer organisations predicting shortages in the next two years we don't expect to see a return to the rapid increases in salary levels or the IT staffing difficulties that were seen in the late 1990s just yet.
The government, health and education sectors were among those most likely to report recruitment and retention problems for specific IT skills. The NCC warns that they will need to increase the salaries they offer to both existing staff and new recruits to compete more readily with other industry sectors.
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