IT jobs and salaries up: APESMA

Stan Beer
Thursday, 16 February 2006 06:42

IT People - Enterprise

The labour market for IT professionals strengthened in 2005 from its post-2000 lows of recent years, according to a survey by professionals union, the Association of Professional Engineers, Scientists and Managers Australia (APESMA).
IT Jobs We specialise in IT and telecommunications positions

The APESMA/ACS Remuneration survey of late 2005 indicated that the average salaries of IT professionals had increase by 3.8% in 2005 compared with an average increase of 3.4% in 2004.

Employment in the sector has also picked up with some employers reporting skill shortages. These shortages are driving up salaries by 10-12% in the skill shortage areas.

According to APESMA, the Australian government has identified shortages and is offering potential migrants with sufficient skills and experience in certain computing specialties (CISSP, E-Commerce Security, Network Security, SAP and SIEBEL) extra points on the general skilled migration points test and priority processing of visas.

APESMA believes the trend is expected to continue at least for the next 2-3 years with Australia's economic development increasingly being reliant on IT infrastructure and a growing government recognition of the importance of world class IT infrastructure in all facets of the nation's activities.

The development of the global economy is also reflected in the development of the global labour market for IT professionals. Large numbers of recent IT graduates seek employment opportunities overseas at least early in their careers. This has the effect of reducing the supply of recent graduates to fill employment opportunities in the IT sector in Australia.

When coupled with the decline in university enrolments in IT in recent years - some universities have experienced declines of up to 50% in first year enrolments - the supply of IT graduates in 2007 and beyond will be significantly less that in previous years and is likely to result in a significant shortage of IT graduates. This will in turn force up the remuneration as employers compete for scarce skills. As such APPESMA expects the labour market for IT professionals to strengthen significantly over the next 2-3 years and beyond.

In the areas of strong demand the following employment benefits have emerged for IT professionals:

* Increased annual leave - some members elect to receive extra annual leave in lieu of some of their salary increase - one week's extra leave is equivalent to 2 percent increase in salary (it could be argued that it is less than 2 percent as it does not incur "on-costs" which are generally in the order of 25% of salary).

* Retention payment - such a payment is often made if an employee remains with the employer for the duration of a project or for an agreed period of time. The payment could be in the range of 15-30% of salary.

* Part-time employment - the skills shortage means that employers will "get what they can".  Thus if some IT professionals are only willing or able to work part-time, many employers will accommodate these arrangements to acquire/retain them. Similarly arrangements that enable the professional to work from home for part or all of the week are becoming more accepted by employers.

* Overseas exchange - many professionals are keen to work overseas and in most instances this means that they resign from their employer to travel overseas for work. Professionals working for organizations with overseas links may be able to arrange an exchange with an overseas counterpart as employers try to avoid losing staff permanently.

* Payment of course fees - while APESMA expects that employers will meet the cost of courses relevant to the skill development needs of their professionals, the current labour market means that employers are likely to be more agreeable to meeting such requests as a means of retaining staff.
.
Other possible benefits in relation to their remuneration identified by APESMA include:

* Remuneration packaging - while the reduced personal tax rates that come in on 1 July 2006 may appear to make packaging (also known as salary sacrifice) less attractive for persons below the top marginal tax rate, remuneration packaging of laptop computers, mobile phones and superannuation are tax-effective for most employees.  Packaging of motor vehicles through a novated lease or associate lease is also effective for most people if structured correctly.  Those on lower marginal tax rates may still benefit from packaging a motor vehicle but making a contribution from after-tax income will be more important than ever. (More information is available in the members-only section of the APESMA web site)

* Superannuation contribution splitting - this enables an employee to split part of their super contribution with their spouse. This effectively enables many employees and their spouses to access increased tax-free benefits from their superannuation savings at retirement.