The reason tech salaries are on the rise in 2014? Demand’s outstripping supply

The year 2014 marks the fifth year since the global recession was officially recognised by the IMF, although technically this economically restrictive period started in the US back in 2007 with the liquidity crisis. And although the signs are good that this year will mark the start of the eagerly awaited turnaround, it will require strong leadership to break through to this organic plateau.

Attract and retain
Apart from technology investments themselves, CEOs and HR departments are grappling with precisely how to attract and retain the key technological skills that will be required to nurture the opportunities expected of 2014.

These companies have examined the forecasts and recognise that IT innovation is crucial to strong growth in 2014 and beyond. They are willing to inflate their payrolls to ensure they are poised to ride this new wave.

Explains Payscale, a global leader in workforce salary data, in its 2014 Compensation Best Practices Report; “In 2014 companies expect growth and increased hiring. Competition for key talent is heating up. Growth and hiring surges are causing big concerns about retention as employees leave for greener pastures.”

In the depths of the recession, in 2010, only 20% of respondents cited being worried about skills retention. By 2013 this number had skyrocketed to 59%, and the trend shows no sign of abating in the year ahead.

Skills requirement shift: from technology to business

New roles are being created as IT moves towards an increasingly hybrid composition, with both existing and new staff being refocused on better serving the objectives of the business as a whole and not merely maintaining the existing operations.

These sought-after skills do not necessarily track the core technological trends for the year. BI/Big Data skills for instance, while a top priority for IT managers, have not grown and are not expected to increase dramatically for 2014. This is partially attributed to a shift towards Managed Services as well as Cloud.

In an emerging markets country like South Africa, social media continues to have more of an impact on how business is being conducted than expected, so these salaries are on the rise as businesses look to position themselves as leaders in this strongly emerging field.

In that country, staffing specialist Career Junction predicts significant IT salary growth this year on the whole, but when focussed down into regions show that the majority of this growth will be taking place in the economic hub of Gauteng. The Western Cape region is expected to see IT salaries continue to stagnate, while KwaZulu-Natal could see salaries falling as demand tails off.

This forecast represents an opportunity for companies to invest in more IT staff in the regions where these skills are cheaper to enable them to capitalise on the opportunities technology offers without exposing themselves to excessive overhead creep. The same would most likely be true of any country with these kinds of regional differences.

Unlocking advantage through alignment

These skills challenges make it more imperative than ever that local small to medium enterprises continue to invest in their IT staff. Technology investment, including IT payroll composition, remains the key to unlocking the growth necessary to break free of the recessionary cycle. Provided that these decisions are made in alignment with business objectives for the year ahead and not merely in following compelling technology trends.