Credit crunch bites IT pay in the North

Hopes among IT workers that regions north of the City will provide some ballast to the jobs market in the recession have been dashed by the latest wage report.



Annual pay for IT staff in the north of the country has dropped by 1.7% to £29,380 in the last 12 months, reversing their fattening pay packets for the first time in two years.



Yearly take-home pay for IT staff in London, in contrast, has notched up by 1.2% to £45,240 over the same period, widening the north-south IT pay gap even more.



A heavier concentration of lower-skilled IT roles, such as support and data processing, in the north than in London was blamed for the wage erosion in the north.



In a downturn, such roles are particularly vulnerable to being cut, outsourced or offshored, as organisation strive to cut costs, said ReThink Recruitment, report author.



But there was another reason why the capital's IT staff, most of whom work for jittery financers, are more resilient to the downturn than their colleagues in the north.



For being easier to layoff, contractors, who are more populous in London than in the north, would have curbed their clients' needs to cut costs by eliminating employees.



But switching to direct employment, a growing temptation for some contractors, would hurt freelancers' pockets, says the report, based on statistics from E-skills.



It states that the overall wage growth for IT professionals in the UK stood at 3.5% during the last year, lagging behind the UK's overall wage growth of 6%.



Hinting the disparity is even worse in the north, and growing, ReThink's director Michael Bennett said IT staff in the north now earn just 65% of London wages.



"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," he said.



"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 demand in London were those developing e-trading systems, designed to generate savings, and those skilled in front or middle-office compliance and risk management