ICT salaries grow at twice CPI

This growth is expected to continue through the next year.

The 2007 Australian Computer Society Remuneration Survey, conducted by the Association of Professional Engineers, Scientists and Managers, Australia, shows that average salaries paid to employee ICT professionals rose by an average of 4.5 per cent over the 12 months to May 2007:

Increases in remuneration paid to those employed in the private sector were 4.6 per cent, compared to a 4.1 per cent increase for those ICT professionals employed in the public sector. Education sector employees reported an average increase of 4.7 per cent.

In real terms, the salaries of most ICT professionals have increased faster than general cost of living increases. The Australian Bureau of Statistics reported an increase in the Consumer Price Index (CPI) of 2.4 per cent over much the same period.

Table 1 - median salaries by job function JOB FUNCTION MEDIAN TOTAL PACKAGE General Management $180,474 Sales & Marketing $143,915 Consulting $122,098 Project Management $121,980 IT Management $118,087 Network Security $107,481 Project Leader $101,827 Research & Development $95,969 Systems Management $95,839 Research & Teaching $95,758 Business Analyst $94,644 Database Administrator $91,391 Analysis & Testing $82,840 Software Engineer $80,230 Programmer/Analyst $78,589 Teaching/Training only $78,342 LAN Manager $74,520 Computer Support $62,897

In relative terms, the incomes of ICT professionals were keeping pace with most other technical professional employees who reported increases over a corresponding period in the order of 4-5 per cent. However, increases for ICT employees generally lagged behind those for professional employees in the boom resources sector where average salary increases were in the order of 5-10 per cent over the last year.

In the year to February 2007, the Australian Bureau of Statistics reported Australian Average Weekly Earnings increasing by 3.4 per cent.

General management was reported to be the most lucrative position based on the median value of total remuneration packages, where a total package is defined as comprising the sum of the value of base salary, bonuses, superannuation and the value of fringe benefits such as motor vehicles.

Demand increases Survey respondents again reported a discernible improvement in the perception of levels of demand for employer goods and services, continuing a trend apparent over the last five years.

Demand levels compared to the preceding year were described as being much stronger or stronger by 51.6 per cent of respondents. This was a similar result to that obtained in recent surveys which had indicated much stronger or stronger demand in excess of 40 per cent of cases.

The strongest level of demand was reported by those working in the consulting industry where 67 per cent of respondents reported levels of demand being substantially higher than a year earlier. Levels of demand, whilst still solid, were comparatively lower in the education, retail and manufacturing sectors.

The underlying trend of these results suggests overall performance of the ICT sector remains solid. The rate of increase in salaries between industries is reflective of industry performance and the competitive pressures brought to bear upon them.

As shown by Graph 4, the rate of salary increase was greatest within the consulting and related non-manufacturing industries, the same industries where respondents reported the greatest increase in demand for employer goods or services.

It should be noted however, that even within these high-demand industries, salary outcomes were barely keeping pace with increases being achieved by professionally qualified employees in many fields of engineering and science other than ICT.

One possible explanation may lay in the comparative ease with which some ICT services are able to be outsourced overseas. Most engineering and science (particularly geoscience) jobs cannot be outsourced to an overseas supplier.

Independent contractors Rates charged by independent contractors varied considerably, though generally fell in a range of $65 to $110 per hour, depending on nature of work undertaken.

Among independent contractors, 5.5 per cent reported a decrease in rates charged compared to rates being charged a year earlier, 47 per cent had held their rates steady and 47.5 per cent of independent contractor respondents had increased rates during the course of the year.

The pattern of difference in rates charged by independent contractors compared to a year earlier further supports the view that the IT sector has continued to rebound over the course of the year.

Future expectations Demand for IT professionals is now at its highest level since July 2001, according to statistics from the Department of Employment and Workplace Relations.

The labour market has strengthened considerably over the past few years, with specialist recruitment agencies warning of looming ICT skill shortages. This in turn is pushing up the remuneration of experienced IT professionals, as employers compete for increasingly scarce skills, while IT graduates are experiencing their best employment market for the past five years.

Average salaries have increased for most ICT employees by around 4 to 5 per cent over the past year.

Over the last year, whilst some ICT professionals with scarce skills have enjoyed salary increases of up to 10-15 per cent, over the same period 1 in 10 employees received little or no increase.

Salaries for ICT professionals are likely to continue to increase by an average of 4-5 per cent over the next 12 months as a result of the increasing demand for IT professionals and the declining supply of graduates due to falling enrolments and the ageing of the workforce.

Demand is being driven by multi-billion dollar federal and state government infrastructure projects and considerable private sector investment as organisations aim to increase their security, service levels and international competitiveness following the fallout from the lows of post-Y2K.

This remuneration survey has been conducted annually by APESMA since 1995. This year's 112pp report can be ordered online at www.apesma.asn.au/surveys/acs

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