No need to swap careers - contractors' salaries are back to pre-recession levels
I ran into a mate at the weekend who has just switched jobs. Or rather, picked up another contract within days of the previous one expiring.
"What's the rate?" I asked, as you do if you are a nosy journalist for whom the sums paid in IT make good fantasy material.
"It's $100 an hour," he said, with a slightly embarrassed shrug. No need to be embarrassed, really. I know he was contractless for nine months at the start of the recession.
That was a time many people with IT skills would have reassessed their careers, perhaps got extra training or moved into another line of work. But they're needed now, and the pay rates are moving up in response.
AbsoluteIT's latest salary report shows the median contracting rate has increased $10 an hour in the past six months, from $70 to $80, returning it to the pre-recession level.
The report is drawn from 14,000 anonymous contributions to the recruiter's website, amounting to an estimated third of the New Zealand IT workforce. It also shows the median total salary package for permanent employees rising a more modest 3.3 per cent to $78,000.
"The classic recovery from a slow market is that contracting picks up first and then permanent positions open up six months or so later," says AbsoluteIT director Martin Barry.
He says the brakes started to come off in mid-February, as stalled projects finally got the go-ahead. "It's getting harder to find good business analysts, with testers also in demand and even some work now for project managers," Barry says.
The $200-an-hour high-level strategic consultants are still waiting for the phone to ring, possibly because much of that work is done in-house by CIOs.
For permanent staff, there has in effect been a wage freeze across the sector for the past 18 months. But while the base median salary has stayed at about $75,000, performance-based incentives have added another $3000 to the total median package.
Barry says that's a sign of a market starting to move, and firms need to think about how they can retain their staff.
There could be room to move in benefits and allowances. Some 38 per cent of respondents receive a mobile phone or phone allowance as part of the package, the highest percentage recorded since the survey started.
Rather than being an act of generosity, this could point to an increased requirement for employees to be more accessible to their employers and clients during and outside of normal business hours. Only 7 per cent of contractors got a phone allowance.
The number of permanent staff getting flexible working hours went up 3 per cent to 28 per cent, indicating some employers are seeing the benefit of offering more flexibility for their employees.
Company-paid training is a common expectation in the sector with 26 per cent getting some, down 3 per cent on a year ago but up 1 per cent on six months ago. Paid carparks went down 2 per cent to 22 per cent, which may indicate further cost-cutting by employers or fewer new employees being offered this benefit. Only 11 per cent of permanent employees get overtime, and 1 per cent get an employer contribution to child care.
In January, an AbsoluteIT employee intentions survey found more than two-thirds of respondents were keen to move roles this year, with a third of them actively looking.
Based on that pressure, the latest survey estimates IT professions could command salary rises of 2 to 7 per cent over the next year to stay in their jobs, depending on skill level and experience.
As confidence returns, permanent headcount is likely to increase, easing the load on overworked staff or replacing contractors.
In individual skill areas, the amount paid for web and multimedia designers is up over 7 per cent, making up some of the 11 per cent drop in the last survey.
"This could well be a direct reflection of businesses taking the time to review their web and multimedia functions to ensure they are not being left behind their competitors as the market begins to turn," the survey says.
Barry says there could be severe skill shortages in some areas, because of internal as well as external activity. "We're a bit nervous about what's happening in Australia.
"There is the $43 billion that's going to be spent on the national broadband network, compared with the $1.5 billion we're spending here ... It won't be long before our people start looking over there. "
