The UK tech sector now employs around 1.46m people (7.5% of the British workforce) and is growing fast and this growth is starting to fuel salary increases as businesses start to compete with each other for a limited number of tech professionals.
According to figures from the IT Job Board the majority (81%) of permanent IT staff and 60% of contract staff expected to receive a salary increase in 2015. This follows a year in which over three quarters of the permanent staff (77%) and over half of contractors (55%) surveyed already experienced a salary increase.
For a change the salary increases are not just something that’s happening in London. According to the survey, those working outside London are the ones most likely to have seen a pay raise in 2014. According to the survey results, on average 78% of permanent tech staff employed outside of London experienced a salary increase last year compared to 74% of those working within the capital.
A possible explanation for the regional uplift lies in the fact that salary levels outside of London have been historically significantly lower to those earned in London. For example, based on data compiled by The IT Job Board from IT Jobs Watch, those regions that have seen the greatest growth in tech salaries over the last two years – most notably Scotland (up 9%), the North East (up 7%), and the North West, East Midlands and South West (each up 6%) were between £12,791-£17,904 lower than the average tech salary of £53,596 in London at the end of 2012.
In 2014, whilst the average tech salary in London remained at a significant premium to the rest of the country, standing some 30% higher at £55,377 in Q4 2014 compared to £42,455 for the rest of the country, the average tech salary in London had only increased by 3% over the two year period, with minimal growth recorded (0.15%) in the last twelve months.
And according to The IT Job Board analysis, a similar picture appears over the last two years for IT contractors, where hourly rates have increased by 21%, 14% and 10%, respectively, in the North East, Scotland and North West, compared to just 2% in London. Hourly contractor rates in London, however, remain at a healthy premium - some 18% higher to the rest of the country in Q4 2014. In Q4 2012, the London contractor premium over the rest of the country stood at 23%.
Jamie Bowler, Marketing Director of The IT Job Board in the UK, commented: “It is highly encouraging to see buoyant growth for tech specialists now starting to emerge across the country as business and tech hubs across Britain start to buzz. Whilst London’s Tech City will continue to attract much of the media spotlight, what we are seeing on the employment front is growth across the country at all levels - no doubt helped by lower living and business costs in centres outside of London and the emergence of vibrant new-start businesses around university cities.”