IT skills shortage pushes salaries north

Despite a drop of 2.8 percent in ICT vacancies in July 2006, the Department of Employment and Workplace Relations (DEWR) reports a steady demand for IT professionals in the workforce.

The 22,262 ICT vacancies recorded last month resulted in an index of 289.4, which means that there are nearly three times the number of advertised ICT vacancies now as in November 2002.

Although the ICT vacancies index is still 56 percent lower than its peak during the Y2K period, the demand for ICT skills has grown over the past year, increasing 17.7 percent since July 2005. Most of the current ICT vacancies are based in New South Wales (52.3 percent), with 25.3 percent in Victoria.

Michael Gray of the DEWR is quick to warn against using the index as a sole indication of job prospects in ICT. The index, he said, is calculated on the number of advertisements for IT positions that appear online. It does not account for listings that appear multiple times, or advertisements for positions that have already been filled.

"This is not reflecting an increase in demand; it is reflecting the number of [online advertised] vacancies," he said.

But that is not to say that prospects for IT professionals are not, in fact, very good. In fact, the national skills shortage has been driving up average salaries quite nicely.

The 2006 Australian Computer Society (ACS) Remuneration Survey, conducted by APESMA (Association of Professional Engineers, Scientists and Managers, Australia) on members of the ACS, revealed a 4.3 percent increase in the average salary for IT professionals over the last year to a national average of $85,610. An IT graduate fresh into the workforce can expect to receive remuneration of around $43,384, a 7.7 percent increase on the 2005 average.

IT professionals with scarce skills, such as high-level application development specialists, database managers, architects, security specialists and testers are attracting greater pay rises, with average salaries increasing up to 20 percent. Meanwhile, professionals with business and people skills to complement their technical abilities are enjoying very rewarding packages, particularly in finance companies.

"There's not enough of senior people around, and they're the ones who are pushing up the salaries," said Margaret Bozik, APESMA's labour market analyst.

"Over the past 18 months, money has been thrown at various IT projects. So, for a lot of graduates, they're likely to find work in the government sector and government-funded projects."

There has indeed been a significant rise in corporate and government investment in IT over the past two years. The federal government in May budgeted $2.7 billion for ICT projects, including $755 million in IT security.

The Australian government is awarding extra points and priority processing of visas to potential migrants with relevant IT skills and experience. There has also been an increase in the number of temporary work visas granted to IT professionals sponsored by Australian businesses.

IT work that has previously been outsourced in a number of large banks is now being brought back in-house. Commonwealth Bank and ANZ are among such organizations that "cite a desire to retain skills and control internally and observe that the cost-savings of outsourcing were not as high as previously", Bozik reports.

Other large organizations including state and federal departments are choosing to outsource major IT contracts to global companies such as IBM, Accenture and EDS. However, Bozik notes that while low-end IT occupations such as programmers, coders and support specialists may be at risk of offshoring, jobs that require advanced degrees as well as management and business skills show no signs of decline.

APESMA expects continued expansion in the labour market for IT professionals over the next two to three years.