Recruitment crisis looms for UK tech industry

Resignations are on the increase in the UK tech sector as bonus payments fall and pay rises drop below the national average.

The 2007 National Management Salary Survey by the Chartered Management Institute (CMI) and Remuneration Economics shows an average salary increase of 5.3 per cent across all industry sectors - down from 5.7 per cent in 2006.

Those working in the IT sector fared particularly badly, coming second bottom of the pay-rise league table with an average earnings increase of just 3.1 per cent. Only the transport and logistics sector came in lower with an average of 2.6 per cent. The survey covers 42,205 employees from trainee level to senior management.

Bonuses are also down in the IT industry. Across the sector 34.7 per cent of executives were awarded bonuses, down from 59.5 per cent in 2006. The average bonus payment in the IT industry was £5,189.

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Managers in the IT sector are among the highest earners, however. They are the fifth highest compared to other industry sectors with an average annual salary of £47,108. The national average for managers is £47,449.

Recruitment and retention of staff remains a big issue for employers in the IT industry. The survey shows resignations in the sector have increased from 4.4 per cent last year to 5.9 per cent.

Recruitment problems were reported by 81 per cent of employers and a third said they now offer "golden hellos" or signing bonuses to attract the right calibre of staff. A shortage of qualified candidates was cited as the main reason for recruitment difficulties.

Jo Causon, director of marketing and corporate affairs at the CMI, said in the report: "The steep climb in organisations reporting recruitment difficulties, mixed with an increasing number of resignations should be ringing alarm bells for employers. The marketplace is clearly tipping in favour of the employee, so if they are serious about retaining the best talent organisations urgently need to meet the needs and expectations of their staff."