Wage gap opens
Jan 8 2009 by Andrew Mernin, The Journal
IT professionals in the North of England have seen a slump in wages at the hands of the economic downturn as their Southern counterparts have enjoyed a pay increase, a survey has found.
Research by ReThink Recruitment found Northern IT workers’ pay has declined by 1.7% on average in the last year, widening the pay gap between the North and London for the first time in two years.
The data, supplied by E-Skills, showed average IT salaries in the North to have fallen to £29,380 while those in London have climbed 1.2% to £45,240 in the last year. ReThink also said IT workers in the North now earn 65% of London wages, compared to 67% of London wages in 2007.
ReThink director Michael Bennett said: “London’s financial sector has taken the brunt of the fallout from the credit crunch, but the capital’s IT staff, many of whom work for financial institutions, are proving more resilient to the downturn than their counterparts in the North.
“London IT staff tend to be concentrated in front and middle office roles, which are seen as value-creating by delivering productivity gains through more efficient systems, whereas IT staff in the North are more likely to be in support functions, which are usually regarded as an overhead, making them more susceptible to cut backs.
“IT staff in financial services in London may be developing electronic trading systems, for example, which generate cost savings. There is also increased demand for front and middle office IT staff in London with experience of compliance and risk management systems.
“In the past couple of years we have seen a narrowing of the North-South pay gap in the IT sector, fuelled by regeneration in Northern cities which attracted more skilled professionals and corporates to the region, and spiralling costs in London. Unfortunately the credit crunch has reversed that trend.”
The stats by E-skills also show that the overall wage growth for IT professionals in the UK, at 3.4%, is lagging behind the UK’s overall wage growth which is 6%.
