Management at IT staff agencies (ITSAs) and leading IT services companies operating in the UK must feel somewhat bemused by the article in today’s FT which declares that ‘Salaries across the UK technology sector rose as much as a quarter during 2012, as rocketing demand for skilled web designers and app developers stoked wage increases.’ The source of the data was cited as Clapham-based classified ad start-up, Adzuna.
In the article, my learned colleague (and TechMarketView chairman) Richard Holway rightly poured a dash of cold water on this view: “I doubt there will be significant wage inflation”. If you (or indeed Adzuna) would care to look through our long-running UKHotViews commentary on the leading UK ITSAs – who after all supply the vast majority of IT skills to the UK market – you might draw quite a different conclusion.
For example, UK IT recruitment gross profit at SThree fell by 2% yoy (see here). Harvey Nash saw UK permanent recruitment fall by 4% (see here). And veteran ITSA, Triad, trundled back into loss due to pricing pressure (see here). Most other players (e.g. Hays, Michael Page, Parity) were similar; the only major recruitment firm that reported growth in its UK ITSA business was Adecco, where IT revenues grew by 6% (see here).
Readers should be aware that the vast majority of jobs in the UK technology sector are involved in the crucial task of keeping existing (some might say ‘legacy’) systems going. In most cases tech staff have seen several years of ‘salary restraint’. We have seen no evidence from any of our many clients that salaries in those roles are rising by anything like 25%. Now, it is always the case that niche ‘hot’ skills cost more – in bad times as well as good – just as there is also a difference between ‘asking price’ (i.e. job ads) and ‘selling price’ (i.e. fee paid). So, if it is indeed the case that Adzuna ‘feeds its data directly into the Downing Street Dashboard’ as the FT article suggests, then Mr Cameron and Mr Osborne might do well to plug UKHotViews into the Dashboard too, in order to get the bigger – and unfortunately far less rosy – picture!