Salaries are up again, but the increases are slowing, Meanwhile .Net skills are appearing on the 'must have' list alongside Java and XML

The IT labour market is slowing down according to research from the latest survey by the National Computing Centre in Manchester, based on salary and employment details for over 11,000 staff.

The rate of salary increase over the past year reached an average of 3.7 percent for IT staff compared to 4.9 percent reported 12 months ago. Increases in salary scales were higher in London compared to the average.

Forty seven percent of respondents to the survey expect demand for IT staff to increase over the next two years, with 14 percent expecting a decrease and the remaining 39 percent expecting no change. This creates an aggregate 6.9 percent growth over the next two years and is significantly down on last year's growth rate of 11.9 percent.

The fastest expected staff growth rate is in network support with 12 percent growth over the next two years. Second is technical support at 10.1 percent and User support in third place at 9.8 percent. Systems developers as a group experienced the biggest change since last year when there was a growth rate of 18.1 percent compared to only 8.4 percent this year. Management showed a minuscule growth of 0.5 percent and Operations came last with a 4.3 percent drop in numbers predicted.

Although 29 percent of respondents reported employing some contractors -- only marginally fewer than last year -- systems development contractors as a proportion of permanently employed systems developers has fallen again to 7.5 percent (compared with 9 percent in 2001, 16 percent in 2000, and over 20 percent in 1999).

Based on the replies, contractor rates have fallen since last year. The average rate reported for systems developers (the largest group) has decreased from £386 to £346 per day, and the average for consultants (the second largest group) has fallen from £551 to £512 per day.

The demand for Internet and intranet skills continues to dominate the new skills requirements, as it has for the past three years. This year just under half of the respondents indicated that they would be seeking Internet/intranet skills. Both Java and XML continue to feature strongly, while .NET skills have made a significant appearance in this year's survey.

Looking at all the new skills required, respondents expect to attain these skills by training existing staff in 69 percent of cases, while 38 percent indicated that they would recruit the staff and 22 percent said they would use contractors.

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 the NCC do not 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.

For the health, education and other services sectors to fulfil their expected high growth in IT staff and to resolve some of the issues concerned with recruitment and retention of the right IT skills, they will probably have to be more competitive with other industry sectors, including increasing the salaries offered to staff in-post and new staff.

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