IT 2013 Salary Survey

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PSD Group IT & Business Change - 2013 Salary Survey & Employment Trends Report. For more information go to:
http://www.psdgroup.com/IT_Business_Change_Salary_Survey_Employment_Trends.aspx

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IT 2013 Salary Survey

  1. 1. PSD 2013 IT & Business Change Employment Trends Report
  2. 2. 02 03Employment Trends 2013 PSD Employment Trends 2013 Financial Services & Banking Within Retail Banking we have seen a high demand for Business Analysts, Project Managers and Architects with strong integration and migration experience as a result of several high profile mergers and acquisitions. There has also been a demand for candidates with experience of working on regulatory and compliance related projects due to a raft of new legislation across the industry (See Investment Banking and Asset Management below). Mobile and Payments is in the forefront of many of the banks’ plans and they are investing heavily into the digital technology and individuals with these skills in order to stay ahead of the competition. Within the Cards and Payments arena we continue to see a constant demand for resources as the major players such as Visa, MasterCard and American Express position themselves to be the best option in offering innovative and easy ways of cashless transactions. Key areas of development include near field communication, M Wallets, contactless and smart phones. The services in the public domain are PayPass/Wallet and PayWave, which offer a consistent shopping experience regardless of how and where consumers shop and makes it easy for developers to integrate into existing checkout systems. The market is poised to see an explosion of devices on the market as Smart Phones become increasingly popular. Contactless payments have reached a critical inflexion point with more than 19 million transactions conducted across Europe in March 2013. Contactless momentum in the UK has grown significantly in 2013 with 1.5 million Visa contactless transactions being made on London Buses since December, M&S processing over 230,000 contactless transactions every week and the Post Office installing contactless payment terminals in all of its 11,500 branches. The market is still fiercely competitive and we see this as being a strong area of growth for PSD over the next twelve months. Within Investment Banking and Asset Management we have seen selective hiring for new technology projects with greater demand for resources on projects to address regulatory requirements including FATCA, DODD Frank, EMIR, AiFMD, AML and to streamline operations. Specifically within Asset Management, the continued trend in outsourcing back and middle office functions continues to drive demand for resources with experience of working on these projects. Contractor rates remained steady and in some areas saw an increase particularly within the niche skill sets. Sector Overview The market remains difficult to predict but the demand for IT and Business Change skills across many of our clients has remained stable. Foreword Welcome to PSD’s IT & Business Change 2013 Employment Trends & Salary Survey, an essential guide to pay and reward across all industry sectors. Over the years of producing this survey we have always striven to produce a concise, accurate survey that reflects the salary changes in our ever-changing economy. This year is the broadest survey that we have ever completed, asking not only our candidates, but also hiring managers and HR managers to supply their feedback. Contents 02 Foreword 03 Sector Overview 06 Industry Sectors 07 Contractor Trends 08 Contractor Rates 10 Permanent Summary 12 Role Attraction 14 Social Media 15 Hiring Methods 16 Candidate Search Methods 17 Summary 2013 has been a challenging year economically, however the UK IT market is faring well with demand remaining consistent when viewed at a high level. Naturally, there are winners and losers on scrutinising the detail. Retail, Software, Insurance and Travel & Leisure are among the stronger markets, with the Investment Banking sector remaining slower, however at the time of writing we are seeing conditions improve. When looking at the overarching trends, we see both permanent and contract demand stable with the interim market slipping backwards over the period. Salaries and day rates are increasing overall, with some skill sets and niche applications such as BI and Analytics being paid a premium. Business Architecture, Transformation & Change and Programme Management remain in demand as businesses look to address their operating models to match the economic climate. When we look ahead to the coming 12 months it is difficult to begin predicting where the growth will come from. My personal thoughts are in the area of analytics and visualisation, allowing businesses to get to the true value of their data and using their findings to identify growth opportunities not before seen. I hope you enjoy reviewing the IT & Business Change 2013 Employment Trends & Salary Survey; as always we welcome your feedback and thoughts for future improvements. A final thank you to all of those of you who took the time to answer our questionnaire and provide the data on which we built this report, we appreciate your support and hope you find the output of interest. Chris Eldridge Managing Director The Survey focuses purely on IT and Business Change roles.
  3. 3. 05Employment Trends 2013 PSD 04 Employment Trends 2013 Across many areas of Financial Services & Banking there is a strong focus on data management and projects to introduce vendor solutions or develop in-house technology in order to address requirements in this area. Many of these requirements are being driven by the impact of new regulations within the sector and organisations needing to access and report on a broader range of data. Despite the challenging market conditions PSD’s IT & Business Change practice within Financial Services and Banking sectors has performed well and continues to hire for growth. This is largely due to our broad coverage across the sector and testament to many of the long-standing client relationships that we have in place. During the next twelve months we anticipate that the market will continue to be challenging with the main areas of demand being around projects to address regulatory requirements, data management, operational streamlining, integration, outsourcing and payment technologies. Commerce & Industry The last twelve months have seen a slight re-focussing in the UK markets, with many clients having improved confidence in the economy and therefore looking to enhance or increase their permanent workforce. This could have had some effect on our contract businesses but as part of the drive towards more senior recruitment, the C&I teams have focussed on utilising our high-level contacts by starting an interim level business, covering the Technology, HR, Finance and Marketing divisions. Although the Interim market has been slower than in previous years we have had some significant business wins in both Technology and HR with the last six months spent in building up a focussed group of senior interim candidates and working with C-Level executives to fulfil interim requirements. Our business has also benefited from increased activity and growth in our proportion of overseas revenue; so whilst some segments of the British market have been depressed there have been greater opportunities in counterpart segments in Europe and the Middle East. Although there are certain issues to overcome in dealing with these markets there are a number of viable and cost- effective solutions that we have been able to utilise. The C&I team has seen growth in a number of areas, including Business Services, Leisure and Travel, Retail and Software Services. However there have also been some sector contractions, which are detailed in the report, primarily driven by the increased use of low margin agreements within highly commoditised sectors and a general reduction in recruitment spend. Our C&I teams have therefore focussed on delivering a high value service at the more senior levels or within the SME space, where agreements are more relationship-driven. This tactic has been successful in mitigating the loss of most of the higher-volume but low margin business. 69% of responses were from applicants in the £60,000+ salary bracket Generally the market has been driven by an increase in projects that have come on-line due to new business or legislation requirements, such as Business Intelligence, Management Information and Big Data or the recognised need for greater data security, where we are seeing more requirements within Information Security specialists, especially at CISO level. We have also seen an increase in recruitment at more senior levels where we have had significant levels of business wins around the Director and CxO level, especially within our permanent and Interim businesses. Other trends we have noticed have been an increase in Projects to migrate from Windows XP to Windows 7 (as XP ceases to be supported by Microsoft in 2014) or across all the sectors an increase in requirements around mobile and e-commerce, including Product Management, Android and Mobile projects and an increase in skills and roles involving User Experience and Information Analysis. In summary the first half of 2013 has not been without macro-economic challenges for the C&I team but our increased focus on new and emerging technologies and a stronger focus on more senior level appointments and the delivery of more tailored recruitment services to SME sized organisations has set us up for an improved H2 in 2013. IT Employment Trends & Salary Survey 2013 This year the PSD Group IT & Business Change Employment Trends & Salary Survey has been split into two parts: a standard salary and rate survey for permanent, interim and contract roles and a report focussing on some of our own statistics for trends in recruitment. We see a number of interesting trends in our survey, around Social Media and Company Benefits which will be discussed later in the body of the report. As per our executive search branding we found that 69% of responses were from applicants in the £60,000+ salary bracket, or of a similar level in contracting. A number of the statistics have a positive focus, indicating an IT employment market that is in good health, with 75.1% of all respondents currently either in salaried employment or contracting and 86% having had less than three months out of work in the last year. Also encouraging is that only 3.2% of respondents have had a period of six months or more without work, which is significantly better than the 7.9% overall unemployment figure, taken from UK Government figures in March 2013. However, it seems that many are still interested in hearing about job offers, with 89.7% being open to talking about other positions. For the future, 44.9% of respondents are responsible for hiring and of those over 70% are looking to recruit, either to replace leavers or as a growth plan. According to our results, 65.1% of secured assignments were through preferred recruitment partners and 28.6% are through referrals and personal networks, whilst 4.8% applied direct to organisations. However this doesn’t directly tally with the numbers of applicants who apply direct to companies which will be discussed later in the report.
  4. 4. 07Employment Trends 2013 PSD 06 Employment Trends 2013 Industry Sectors The three most common sectors that respondees were employed in were Software & IT Services, Investment and Asset Management and Leisure or Travel industries. These accounted for 51% of all responses. There has been a solid upturn in the Financial Services market, which now accounts for 34.7% of responses, as opposed to 31.8% in 2012 and there was also significant growth for Leisure and Travel and Professional services. The table below details the response numbers in order of change. Industry Sector for current employment 2013 response% 2012 response% Change Media 4.1% N/A N/A Digital & E-Commerce 1.0% N/A N/A Consumer Electronics and hardware 1.0% N/A N/A Leisure & Travel 10.2% 3.1% +7.1% Professional Services 9.2% 5.2% +4.0% Software & IT Services 22.4% 18.7% +3.7% Retail Banking 4.1% Under FS 31.8% +2.9% Other Financial Services 6.1% Under FS 31.8% +2.9% Investment and Asset Management 18.4% Under FS 31.8% +2.9% Insurance 4.1% Under FS 31.8% +2.9% Card & Payments 2.0% Under FS 31.8% +2.9% Not for Profit (Government, Charities, etc.) 5.1% 3.1% +2.0% Property and Construction 2.0% 0.5% +1.5% Pharmaceuticals & Healthcare 2.0% 0.5% +1.5% Manufacturing 1.0% 1.0% 0.0% Engineering 1.0% 1.6% -0.6% FMCG 2.0% 3.6% -1.6% Telecoms/Communications 1.0% 4.7% -3.7% Retail 2.0% 7.3% -5.3% Energy and Utilities 2.0% 7.3% -5.3% Business Services 4.1% 11.5% -7.4% The figures indicate a solid upturn in the Financial Services market Contractor Trends We asked a number of contractors to answer questions on their reasons for contracting, what they expect from contracting and also to ascertain whether there was any impact on the contract or interim markets due to changes in regulations. By far the biggest reason given for being a contractor should come as little surprise as being the financial rewards, as 44.4% cite that as being their main reason for contracting. Following this, 41.3% contract due to lifestyle balance and flexibility of role and a significant proportion of the rest, 11.1%, are contracting due to a lack, or perceived lack, of permanent opportunities. Others cited the “Autonomy of working for themselves” and “Having their career in their own hands” as reasons for pursuing the contract and interim route. The impact of a number of legislations on these markets has been well documented and we have seen a trend away from PAYE based contract: this accounts for about 6% of the contracts in the market. As a company PSD does not have any PAYE contracts on our books, which reflects both this market trend and the levels of seniority that we operate at. The majority of contractors, 76.6%, now operate under their own limited company. Although there are about 17% operating through umbrella companies there does seem to be a trend of people moving away from these to limited companies. Whether this is due to AWR regulations it is impossible to say, although there are a number of end user clients, such as Barclays, who will no longer allow contractors on site if they are using umbrella companies. This may be one way to end the wrangling around Swedish Derogation, but would probably warrant some further research. Encouragingly, especially in a difficult economic climate, most contractors (86%) have been in their present contract for over three months and over 26.6% of contractors we surveyed have had their present contract for over twelve months. This is the second largest group, behind 3-6 months, which does indicate a certain amount of stability. 76.6% of responding contractors now operate under their own limited company
  5. 5. 08 09Employment Trends 2013 PSD Employment Trends 2013 Contractor Rates In our survey we saw that 47% of contractors we surveyed were on a day rate of between £400 - £599 per day, which is a reflection on the level at which PSD IT Contracts operate. This is virtually the same proportion as in 2012. For other contractors there is also some good news (although this may not be so for clients), in that the next largest rate group, which in 2012 was £300-£399, is now the £600 - £699 bracket, which has increased from 13.5% in 2012 to 17% in 2013. It therefore seems that there is plenty of activity in the senior levels of the contract market and rates are stable and, in some cases, increasing. Interestingly, the one area that appears to be less successful recently is the Interim sector, where rates have fallen a little. This is broadly in line with expectations, as we have seen a tightening in that marketplace in the last 12 months. According to our poll, this year only 1.6% of the senior interims we contacted were on rates over £1,000 per day, which is down from 1.9% from last year. There is much anecdotal evidence from our Interim teams that candidates are taking longer to find suitable roles and clients are being more aggressive both on delivery timescales and rates at this level. Of the contractors surveyed, 76% (2012: 75%) were between £300-£699 per day, so it seems rates are still very healthy. Rate Band Response % £100 - £199 1.6% £200 - £299 6.3% £300 - £399 12.5% £400 - £499 23.4% £500 - £599 23.4% £600 - £699 17.2% £700 - £799 4.7% £800 - £899 4.7% £900 - £999 4.7% It would appear that contractor day rates are stable and in some cases increasing There does, however, appear to be a slowing in the numbers gaining an increase of rates in the last twelve months with around only 43.8% of contractors reporting an increase in rate, which is a fall from 64% or respondees in 2012. This may be a knock on effect from a trend we saw in 2010, where a number of companies in the Banking and Energy sectors reduced contractor day rates across the board. As a juxtaposition, 17.2% received a decrease, although for the rest there has been little or no change in their rate. What is most encouraging is that only 1.6% of respondees expect their rate to decrease in the coming year. A full breakdown is shown below. Contractor Rates 17.2% received a decrease in day rates, although only 1.6% expect their rate to decrease in the coming year.
  6. 6. 11 PSD 10 Employment Trends 2013 Employment Trends 2013 Permanent Summary Similar to Contracting, the market is looking positive for Permanent employees with pay, salary reviews and benefits all having positive outlooks. For the 75.7% of respondees who have had a pay review in the last twelve months and the 12.1% who have had to wait 18 months+ for a review, there is some good news with 51.5% having had a pay increase. At the other end of the scale 9.1% have had a decrease and 39.4% are unchanged. For those who have had a change the majority (around 58.8%) have had a change of up to £4,000. Interestingly, no-one had had a salary change either between £6,000-£6,999 or £8,000-£8,999 (which may warrant further investigation); whilst 11.8% had a change of £10,000+. It could be that a proportion of those who had a pay decrease may have moved roles or now work in organisations with different salary bands. 51.5% of permanent respondees have received a pay increase in the last twelve months Permanent Summary In our survey the three most commonly offered benefits are: Private Medical Insurance (62.1%), Life Assurance (48.3%) and Flexible Working hours (44.8%). In other cases there were group discounts for the products of the company, especially around Financial Services and Retail. Interestingly, 10.3% of employed respondees had none of the benefits that we listed. The full table is shown below. Nearly 45% of respondees enjoy flexible working hours
  7. 7. 12 13Employment Trends 2013 PSD Employment Trends 2013 We wanted to get some insight into whether organisations were offering the right incentives to candidates and employees in order to attract and keep their best assets. We broke down the response into line managers, HR and candidates. There is some correlation between what line managers believe that candidates look for and what candidates are looking for, but there are some interesting differences. Managers believe that, when hiring, the three most important enticements to the best candidates are: Remuneration, Company Leadership and Recognition for Performance with 84%, 82% and 80% of hiring managers strongly agreeing that candidates will look for these aspects when looking for a new role. To retain those employees, the same applies, although with a higher figure, (89%, 86%, 86%). For those with an HR remit the following were seen as the main reasons people selected employers: Company Leadership, Remuneration and Employee Engagement. In the view of hiring managers the least important attraction for candidates is an open style management culture, with only 54% seeing it as important. For candidates the top three reasons to join a company are: Remuneration (81%), Challenging Work (71%) and Company Leadership (70%); the least important reason they felt was ongoing training (27%). What did surprise us was that whilst hiring managers feel that career development planning and employee engagement are very important (76% & 79%) to the attraction and retention of candidates; candidates told us that these were far less important for them (32% and 55%). This could possibly be due to the fact that our survey went to both permanent and contract/interim candidates and you would imagine that these aspects of company culture are far less important to those who are not looking for a permanent role. From our perspective the fact that Remuneration figures most highly in all instances is not overly surprising but the fact that neither Line managers nor HR thought that an open style management culture was as important as the candidates themselves did could explain why some look elsewhere. Role Attraction What attracts candidates to organisations: their views and the client perspective? 81% of respondees cited remuneration as the key attraction only 27% cited training As we have seen, Remuneration is one of the most significant aspects in an employment package and this also includes, of course, bonuses. We found that the most common bonuses, which made up over 25% of respondees’ bonuses, were 15% and 20%. Interestingly no-one who filled in the questionnaire was laying claim to more than 30% bonus and by far the majority of respondents(36%) had no bonus at all. Where there were bonuses on offer the majority were dependent on company performance (62%) and/or individual performance (48%). Some other bonuses are dependent on a number of factors, which also included Regional, Team and discretionary bonuses.
  8. 8. 15 PSD 14 Employment Trends 2013 Employment Trends 2013 Social Media The impact of Social Media on recruiting and recruitment. There have been a number of surveys on the impact of Social Media on recruitment. Various methods, including Bullhorn Reach, have been developed to make use of this trend. Around 15.6% of the workforce we polled were actively engaged in looking for a new role and it seems that for most people, in IT, recruitment consultancies are still the most likely route to securing a new position: over 65%. However, there is an increase in people using their own and social media networks with nearly 29% securing their last role via this method. Interestingly, despite a number of organisations using their own recruitment teams (such as ITV, BBC, Jones Lang LaSalle and Emirates), this will still only account for 4.8% of secured roles, even though 45% of workers will apply directly to a company’s websites as part of their job-seeking process. Although some organisations have internal recruitment teams there is anecdotal evidence that they still use recruitment experts to help them with hard to fill or volume roles, or where they feel there would be such a high volume response that it is more cost effective to focus themselves elsewhere and let a recruitment consultant deal with the applicant sifting. <5% of employees secured their current role directly with their employer Hiring Methods As discussed at the beginning of the report, Line Managers and HR teams still have a high reliance on recruiters, with over 50% of HR Managers utilising a Recruitment Process Outsource (RPO) or recruitment PSL model and 78% of Line Managers working more directly with Recruitment partners. At least 62%, however, are now also spending a significant amount of time and effort utilising social media networks. The most quoted site, LinkedIn, ranks almost as high as the leading job boards when it comes to preferred methods for end users advertising roles. One aspect that did come to light was that Line Managers seem to recruit less from their own networks than HR believe and RPOs appear less utilised by hiring managers than HR teams, with the bulk of recruitment still being completed by specialist recruitment partners. Our survey shows that LinkedIn is almost as important as traditional job boards when it comes to sourcing candidates for roles
  9. 9. 17 PSD Employment Trends 2013 16 Employment Trends 2013 Candidate Search Methods What is perhaps most interesting is that when applicants are looking for new roles they still tend to focus mainly on 3 main areas: traditional Job boards, Social Media and company websites. There are still also a sizeable number who will also use recruitment consultancies’ websites to apply for roles (26.7%). However the greatest trend is that over 60% will also use a social media site to look for their next position, the most common tool being LinkedIn with 70% of applicants using this regularly. Surprisingly, even though nearly a quarter of HR teams use Twitter to advertise roles, no respondees we asked listed Twitter as a route to securing a new position. This could be a reflection on this market segment, or candidates may use job aggregators, such as twitjobsearch.com. However it could merely be that Twitter directs them to the roles on other sites and these are listed instead. There were also differences between HR and Line managers when looking to use platforms, with Line managers utilising their own company’s website more than HR and social media sites less. Also they were more likely to use a greater variety of job boards but have less focus on each one. While nearly a quarter of HR teams use Twitter to advertise roles none of the applicants we asked listed Twitter as a route to securing a new position There is still a significant place for recruitment organisations in the recruitment plans of our clients and the majority of candidates do still tend to work via recruitment organisations. However both clients and agencies still seem to face a number of challenges around a more effective use of social media as the number of applicants placed versus the social media activity, seems to lack correlation. Perhaps the most interesting piece of information we have gleaned from this study is that there is variance between what candidates tell us they look for in their next employer and what those employers believe are the biggest inducements. This would be an area that would warrant further evaluation. We hope you have enjoyed reading the report and would welcome any feedback on the issues we have raised. Summary From a recruitment perspective it seems that the IT market is still slightly affected due to overlying economic trends, but both contract and permanent recruitment needs appear strong heading into the next twelve months.
  10. 10. Employment Trends 2013 Contacts PSD Should you have any queries regarding the survey, please contact either Antony Gascoyne or Laura Fox on the contact details below: The SURVEY team focus Antony Gascoyne Director antony.gascoyne@psdgroup.com http://uk.linkedin.com/in/ antonygasoyne Commerce & Industry Contracts with particular expertise in Broadcast, Newspaper, Publishing and Digital Sector Laura Fox Associate Director laura.fox@psdgroup.com http://uk.linkedin.com/in/laura-fox Financial Services & Banking Contracts with particular expertise in Retail Banking. SENIOR IT MANAGEMENT team focus Cyr Cornberg Director cyr.cornberg@psdgroup.com http://uk.linkedin.com/in/cyr- cornberg Commerce & Industry - Contract & Interim Geoff Eaton Director geoff.eaton@psdgroup.com http://uk.linkedin.com/in/geoff- eaton Financial Services & Banking - Contract & Interim Chris Borgars Director chris.borgars@psdgroup.com http://uk.linkedin.com/in/chris- borgars Commerce & Industry and Financial Services & Banking - Permanent Chris Eldridge Managing Director, IT & Technology chris.eldridge@psdgroup.com http://uk.linkedin.com/in/ christophereldridge IT & Technology

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