Local IT professionals are taking home less money each month as wage increases are not generally filtering through, apart from higher salaries being granted to business analysts and software developers.
Salary increases, if any, are around inflation levels, with few exceptions in areas where there are scarce skills, according to recruitment specialists. Inflation was 4.1% in March, the latest available figure from Statistics SA.
One of the reasons for a lack of wage increases is the recent recession, which led to companies cutting costs and staff accepting lower increases. The global recession resulted in the demise of several companies, including US banking giant Lehman Brothers, at the end of 2008.
Despite improving economic conditions, wages will remain under pressure as supply outweighs demand, which will allow companies to pick and choose, and offer lower increases.
Holding pattern
CareerJunction's executive director for jobs, Paul Byrne, says wages were under pressure last year. Although salaries fluctuated across different skills, there was little evidence of increases, apart from “lucrative” gains for business analysts and software developers, says Byrne.
According to the research, salaries for skilled database administrators dropped 11.38% over the last year. Wages for skilled software developers, however, showed a small, but steady, increase year-on-year, improving 3.03%.
The most significant increase in remuneration packages was for business analysts, with wages improving an average of 13.44% since March last year. This, explains Byrne, is because business analysts are scarce.
“The willingness for businesses to up their salary offerings for business analysts and software developers is, without a doubt, correlated to the deficit of these skills sets in SA.”
Byrne says some IT professionals didn't get any increases last year, and have little opportunity to change jobs to increase their earnings as demand for IT professionals dropped “significantly” in the last year.
Fewer jobs
Vacancies in the IT field fell 22% year-on-year, according to the latest CareerJunction Index, says Byrne. “There is no area within the IT sector which shows a significant increase in demand over the past year.”
Byrne points out the demand for systems and network administrators, as well as database administrators, dropped by almost a third in the past year.
The shortage of jobs is bad news for IT professionals, because it will put salaries under pressure in the future as the number of job hunters is picking up, causing an oversupply in the industry, notes Byrne.
Byrne explains more people are looking for new employment as SA moves out of the recession, with the number of job hunters leaping in March. Last year, the fear of being retrenched prevented many people from changing jobs because of the “last in, first out” principle, he explains.
Limited spare cash
Paracon CEO Mark Jurgens says demand for IT professionals overall is down, although not dramatically, and some areas are seeing higher demand, he says. Jurgens says clients are being more selective, and demand is lower for older technologies, while SAP and new technologies continue to be popular.
The reasons for lower demand could be cost-cutting by companies such as Standard Bank, notes Jurgens. He adds government is spending less, and some companies are pondering offshoring. “I think market conditions are going to remain challenging for a while.”
As a result, comments Jurgens, salaries have more or less stayed the same, with some professionals being given inflation-related increases and others not seeing any growth in their salaries.
Motse Mfuleni, Black IT Forum secretary general, says the lack of increases in the sector is affecting disposable income, because other costs such as petrol continue to rise. However, adds Mfuleni, less free cash to spend is preferable to companies being forced to close their doors because they are unable to trim costs.
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