Management Toolkit

IT salaries on the rise in 2007

Graeme Wearden ZDNet.co.uk

Published: 24 Jan 2007 14:30 GMT

IT professionals can look forward to a prosperous 2007, according to the latest indications from the labour market, which suggest companies are still struggling to find the right skills but will pay well if they find them.

LogicaCMG reported on Tuesday that its growth had been hampered by staff shortages in 2006. The shortages forced it to hire more sub-contractors, the company claimed. The situation was most severe in France, where the company hired extra people towards the end of 2006 to address the issue. Last September, LogicaCMG admitted it was struggling to hire qualified people in the UK.

While this is bad news for LogicaCMG shareholders, it indicates that the market for IT professionals is still buoyant, with the company explaining that it is finding it hard to recruit enough people to carry out all the work available to it.

"In the third quarter, capacity constraints had a dampening effect on revenue growth in a number of our key territories," LogicaCMG said in its trading statement, adding that the situation was now showing signs of improvement.

Earlier this week, recruitment company JSA published a survey which indicated that companies using freelance IT staff may find themselves under pressure to pay more.

The survey found that the IT contractors expect their pay to rise by an average of 10 percent in 2007. Around 40 percent of those surveyed believed that the IT contractor market would grow in 2007, with 50 percent predicting no change.

Contractor UK, a website aimed at IT freelancers, claimed on Wednesday that the daily rates on offer in the private sector have jumped by 4 percent this year, with the public sector not far behind at 3.1 percent.

But IT professionals will need to offer the skills employers need. Recruitment firm Hudson told Contractor UK that the skills most in demand are Java J2EE, VB.Net, C#, LAMP Technologies and data-warehousing.

LogicaCMG's shares fell by almost 6 percent following its skills shortage news, even though the company said it expected to deliver improved profitability.

In its trading statement for 2006, the telecoms and IT services company said that its core IT services business had grown its revenue by just under 5 percent, which is less than analysts had expected.