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Pay rates for IT consultants have soared 17% over the past 12 months on the back of runaway demand in both Public and Finance sectors. The Association of Staffing Technology Companies says the “twin booms” have increased average pay for IT consultants from £41,500 in 2005 - to £48,383 last year. Many IT consultants in the finance industry are earning “considerably more,” after the most merger and acquisitions activity seen in the UK since 2000, ATSCo said yesterday. At the same time, management consultants have benefited from a 33% rise in spending by the public sector, which has been tasked to generate savings by cutting internal headcount. The complex and large-scale nature of state projects also sees consultants as the preferred staffing option, as they allow clients to outsource the risk by using suitably skilled experts. However competition from public and finance consultancies to secure new talent is fierce, prompting one IT supplier to warn it will start rejecting contracts if it can’t secure new recruits. ATSCo said the shortage of candidates is forcing an upward pressure on pay rates, particularly for those consultants whose job is to smooth post-merger integration of IT systems. Ann Swain, its chief executive, said: “Consultancies have embarked on aggressive recruitment drives in recent months to cope with the volume of M&A business, but skills are now in very short supply. “Rival consultancies are locked in a bidding war for skills, which is creating a wage spiral.” Last year, a grand sum of $339billion (£173bn) was spent acquiring companies in the UK – the highest level since the dot com boom, according to figures from Thomson Financial. Meanwhile Kable has reported the government spent £1.86billion on external consultants in 2005, compared with £2.8bn last year. “The public sector outsourcing market continues to grow despite recent concerns about how much is being spent on consultants,” Ms Swain said. “The primary driver of this growth is the scale and complexity of public sector IT programmes, which cannot be managed in-house, and often involve multiple consultancies working on the same project.” She added: “Consultants usually have a technological advantage over in-house managers, acquired from a successful track record on similar projects. “Bringing in external consultants means risk is being outsourced, but companies have to be careful not to hollow out too much of their IT skills base.” Mar 21, 2007 Email this article Printer friendly page Previous Page
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