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1 IT Monitor Q Latest salary and vacancy trends across the IT industry in the UK.co.uk

2 Pay rates boosted while businesses play it safe Q2 was borne of the uncertainty that a General Election brings, and this was reflected in vacancy decreases across both the contract and permanent IT employment markets, quarter on quarter. However, while demand slowed and clients adopted a wait and see approach, pay for both disciplines markedly increased. This most clearly demonstrates the scale of the skills shortage in the UK, especially within the tech sector. Despite the decline in the number of roles available, skilled candidates remain scarce, and so the war for talent has continued to drive salaries well above the national average. As with Q1 2015, London continued to lead the demand for IT staffing throughout Q2. A spike in vacancies, however, was also seen in the North West, an area fast transforming into a technical hot spot outside the capital. The ongoing evolution of the UK IT industry to higher-skilled global centre was reflected in increased requirements for Architects and, ERP and IT Security specialists continues to look stronger than 2014, with salaries and demand up year on year but don t expect a smooth ride. While Q2 delivered an expected dip, what lies in store for Q3 is difficult to predict. The traditional summer slowdown combined with uncertainty within European and Chinese markets could be offset by renewed UK government stability, and a cautiously optimistic view of the national economy. What isn t in question is the gap between the skills and experience in the market, and needs of UK IT businesses. Good news for those hunting better jobs, but an undeniable challenge for those looking to hire. Regards, Roy Dungworth Managing Director Summary Expected second quarter slowdown occurs 11% Permanent 12% Perm market is driving growth 16% Permanent Contract 3% Contract Network Engineer and Technical Architect both showing strong demand growth IT security booming in the Perm market Unusually high number of demand spikes in NW could be driven by political policies of Northern Powerhouse Using market intelligence from major job boards, data from all brands within the Adecco Group UK & Ireland, company websites, social networking sites, Innovantage, the UK s leading provider of prospect and market intelligence to the recruitment sector and we have provided detailed salary trend information to back up our observations on the recruitment market..co.uk

3 IT Market overview As predicted, businesses trod carefully following the General Election leading to a second quarter slowdown. While permanent vacancies dropped 11% and contract requirements slumped by 12% compared to Q1, the market remains healthier year on year. Vacancy growth across regions: June 14 vs June 15 Companies appear to be seeking longer-term talent, opting for permanent hires (up 16% ) over contract quick wins (up a more modest 3%). But while opportunity knocks particularly for Network Engineers, and Technical Architecture professionals a lack of skilled, available candidates is driving pay rates beyond some companies reach. London remains the long-established hub of the IT tech sector, but could developing economies in Manchester, Liverpool and other Northern cities shift focus from the capital? Unprecedented demand spikes in the North West over the last quarter hint of a reversal of fortune, bringing investment in technology back in balance. As politicians throw their weight - and the nation s wallet - behind the Northern Powerhouse, the geography of UK IT may well be set to change. West Midlands 32.29% North West 24.22% North East 23.32% South West 20.11% East Midlands 18.19% London 10.57% South East 9.39% East 9.09%.co.uk

4 Permanent market Q % 0.9% MoM salaries 16.37% 3.01% Salaries The data clearly illustrates that employment growth is being driven by permanent jobs rather than temporary ones, with a 16% rise in permanent roles during Q compared to the same period last year. Only two sectors of the IT market have fewer vacancies than a year ago and ERP, despite Database Development roles showing spikes in three parts of the country during July. The regional blips suggest demand for this discipline is cornered in certain geographical areas. While advertised permanent salaries are not growing as fast as contract rates, they are still outstripping average wage growth, which is now at its highest for more than five years..co.uk

5 Salaries Sector Q2 MoM (Apr - Jun) (Jun 14 - Jun 15) MoM (Apr - Jun) (Jun 14 - Jun 15) Application Analyst 9, % 3.58% Business Analyst 2, % 10.10% , % 29.43% Database Administration 14, % 16.07% , % -0.38% Senior Management 1, % -5.11% ERP 8, % % , % 51.39% Middle Management 17, % 20.59% Network Engineer 12, % 30.41% Project Management 6, % 10.49% Software Engineering 175, % 19.04% Software Testing 10, % 13.01% Technical Architecture 14, % 27.83% Technical Support 51, % 6.93% Web Development 35, % 17.63% co.uk

6 Contract market Q % 2.34% MoM salaries 3.29% 3.9% Salaries Rising 3.29% year on year, contract roles have failed to keep pace with their permanent counterparts. While the demand for contract staff we witnessed during the recession, as companies juggled short-term needs and lack of long-term confidence, appears to be dropping off, the IT sector continues to use flexible, contract employment to fill immediate gaps in strategic skills. Further proof of this comes from the steady growth of daily rates, which are currently outperforming advertised permanent salaries..co.uk

7 Salaries Sector Q2 MoM (Apr - Jun) (Jun 14 - Jun 15) MoM (Apr - Jun) (Jun 14 - Jun 15) Application Analyst 1, % 9.66% Business Analyst 1, % % , % 4.03% Database Administration 5, % -1.34% , % 21.11% Senior Management % -7.14% ERP 5, % % , % 3.85% Middle Management 4, % 12.61% Network Engineer 4, % 22.95% Project Management 3, % -3.63% Software Engineering 40, % 2.40% Software Testing 4, % -3.48% Technical Architecture 7, % 37.81% Technical Support 12, % -6.38% Web Development 5, % 2.58% co.uk

8 Interesting demand spikes within regions Scotland Software Testing Director North East Business Analysis North West Software Testing Web Development Business Analysis West Midlands Project Management Wales Manager Yorkshire & Humberside Director East Midlands Web Development East of England Director Technical Support South West South East Technical Support Network Engineer London Senior Management Application Analyst Technical Architect.co.uk

9 Job demand spikes The largest spikes were Demand spikes occur when there is unusually high regional demand for a specific job set with a month. In this situation, employers may end up paying a premium on standard salary expectations due to the increased opportunities for candidates in the market. Business Analysis Application Analyst ERP London generally displays a number of demand spikes in both highly skilled and niche areas. This trend continued through Q2, despite a slight dip on the previous quarter. What was surprising, however, was an unexpected surge in the North West, perhaps due to political moves made following May s General Election. Discussions of the Northern Powerhouse and more control on spending to local authorities may have done their bit to boost economies in Manchester and Liverpool. The recruitment year got off to a predictably busy start, with many strategic and central roles being filled in line with the release of new budgets. Likewise, the quarter saw more demand spikes than normal, with most markets following London s lead in terms of steady job growth. Accounting for two thirds of the IT market, the Software Engineering, Technical Support and Web Development sectors are generally a reliable indicator of regional performance. We saw a number of Software Engineering regional demand spikes in 2014, but these have been limited to London during the first half of Conversely, both Technical Support and Web Development experienced downward spikes in the capital, while Technical Support was higher in the East and South East. Meanwhile, Web Development demand was more evenly spread, spiking across the East Midlands, North West and Yorkshire Techincal Architect Computer People, All right reserved. The information contained in this publication is intended for general purposes or guidance only. It does not purport to constitute professional advice. Computer People accepts no liability for the accuracy of the contents or any opinions expressed herein..co.uk 8312 v1

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