Network: IT Salary Survey - Permies are the industry's poor relations

More programmers and analysts are forsaking the security of staff jobs to reap the lucrative rewards being paid to freelance contractors. Lynne Curry reports.

Freelance information technology specialists are streaking ahead of their permanent colleagues in the pay stakes. End-of-year salary surveys by bodies such as the National Computing Centre and the leading freelancers' publication, Freelance Informer, point to a growing gulf in affluence.

Fragmentation in pay rates is reinforced by differences in pay scales for the regions of the country - with the South-east showing marked advantages - and in the rates for the same jobs in different sectors. A systems development manager at a bank is likely to receive about 50 per cent more than his or her counterpart at the local council office, and some of the lowest rates are at computer companies themselves.

The head of management services at an electricity company, or heading a department with up to 50 staff, is likely to earn no more than a freelance PC developer, based on contract rates quoted by the agency Prime Selection. A senior systems developer on staff would potentially be offered between pounds 22,000 and pounds 27,000, much less than the pounds 40-pounds 45 an hour negotiable on contract. That works out at more than pounds 65,000 a year for a 35-hour week, even taking eight weeks off.

Karen Spurr, director of the contracts division of one of the leading agencies, Harvey Nash, says that specialists can literally double their earnings overnight by leaving their staff jobs and working on contract.

"If a skill becomes rare, it pushes the prices up, and it's obviously led by market conditions, such as Year 2000, which calls for legacy system skills," she says. "A Cobol analyst programmer could earn pounds 25,000 to pounds 30,000 on staff. The expectations on a contract basis would be between pounds 1,300 and pounds 1,600 a week.''

The gap in earnings between "permies'' and contractors, most of whom work through their own limited companies, is underscored by the respective rise in salaries last year. Whereas staff salaries rose by just above the rate of inflation, at 4 per cent, contractors' incomes rose by double that. Agencies put the rate increase higher, at between 12 and 20 per cent, and some agencies say that IBM mainframe rates have gone up by 22- 30 per cent, to pounds 1,300 to pounds 1,400 a week.

Predictions for 1998 are that freelancers' pockets will have even more buying power, as they are predicted to swell once more by well over the inflation rate. With the millennium problem looming, and companies needing extra IT staff to ensure that their systems recognise the new century, there are no prospects of a dive in demand or in earnings.

One of the most comprehensive examinations of freelancers' earnings, the annual survey by Freelance Informer, discovered that the average turnover for contractors' companies in 1997 was pounds 58,104, 8 per cent up on the pounds 53,750 reported in 1996. A small elite of companies netted more than pounds 90,000 and 1 per cent raked in pounds 150,000 or more. Only 5 per cent of the sample earned less than pounds 20,000, and 3 per cent less than pounds 10,000. The income of the company virtually equates with the salary of its one employee. About 60 per cent of respondents expect their rates to rise again this year.

Not surprisingly, the prospect of earning more money is now mentioned more often than it used to be when freelancers are asked what made them give up the perceived security of a regular workplace. Whereas in 1996, 23 per cent of the Freelance Informer sample said they had left permanent jobs because they were made redundant or sacked, this figure has gone down to 19 per cent - while the number of people attracted to self-employment by the money has gone up year on year, from 31 per cent in 1995 to 42 per cent in 1997.

By contrast, the National Computing Centre found that although nearly two-thirds of the companies they surveyed expected to increase their employment of IT systems and support staff over the next two years - as they have done over the past year - wage rises were nothing like as volatile. The average increase on overall salary levels in 1997 was 5 per cent.

Dominic Cornford, an information analyst and associate consultant with the NCC, said contract rates were more affected by economic climates and in the recession had plunged when salaries had remained stable.

"We have been steadily emerging from the recession for the last three years, although there are regional differences," he says. "But one of the features we noticed was companies looking for more skills in Internet and intranet development, although not necessarily recruiting, but training internally."

Regional variations in salaries, Mr Cornford says, are the most significant factor for non-management posts and, even with management posts, can make enormous differences to pay levels. Higher rates for all jobs in Greater London have not only remained, but have grown. A communications manager paid pounds 36,600 in London would earn pounds 27,500 in the South-west or Wales. Technical support managers would earn pounds 35,000 and pounds 30,000 respectively, and senior systems developers pounds 27,500 and pounds 23,500.

Salary differences between sectors emerge most starkly between the public services and finance and business. Even IT trainees, earning pounds 14,000 in finance, are about pounds 3,000 a year better off than in the public services. A member of technical support staff moving from public services into finance or business services could expect a pay hike of pounds 5,000 on a salary of pounds 18,500, and the differences are more marked higher up the promotion ladder.

Have you tried new the Independent Digital Edition apps?
Arts and Entertainment

ebooksNow available in paperback
Arts and Entertainment

ebooks
Arts and Entertainment
Feeling all at sea: Barbara's 18-year-old son came under the influence of a Canadian libertarian preacher – and she had to fight to win him back
TV review
Arts and Entertainment
Living the high life: Anne Robinson enjoys some skip-surfed soup
TV review
Arts and Entertainment

Great British Bake Off
Arts and Entertainment
Doctor Who and Missy in the Doctor Who series 8 finale

TV
Arts and Entertainment

film
Arts and Entertainment
Chvrches lead singer Lauren Mayberry in the band's new video 'Leave a Trace'

music
Arts and Entertainment

music
Arts and Entertainment
Home on the raunch: George Bisset (Aneurin Barnard), Lady Seymour Worsley (Natalie Dormer) and Richard Worsley (Shaun Evans)

TV review
Arts and Entertainment

TV
Arts and Entertainment
Strictly Come Dancing was watched by 6.9m viewers

Strictly
Arts and Entertainment
NWA biopic Straight Outta Compton

film
Arts and Entertainment
Natalie Dormer as Margaery Tyrell and Lena Headey as Cersei Lannister in Game of Thrones

Game of Thrones
Arts and Entertainment
New book 'The Rabbit Who Wants To Fall Asleep' by Carl-Johan Forssen Ehrlin

books
Arts and Entertainment
Calvi is not afraid of exploring the deep stuff: loneliness, anxiety, identity, reinvention
music
Arts and Entertainment
Edinburgh solo performers Neil James and Jessica Sherr
comedy
Arts and Entertainment
If a deal to buy tBeats, founded by hip-hop star Dr Dre (pictured) and music producer Jimmy Iovine went through, it would be Apple’s biggest ever acquisition

album review
Arts and Entertainment
Paloma Faith is joining The Voice as a new coach

TV
Arts and Entertainment
Dowton Abbey has been pulling in 'telly tourists', who are visiting Highclere House in Berkshire

TV
Arts and Entertainment

TV
Arts and Entertainment
Patriot games: Vic Reeves featured in ‘Very British Problems’
TV review
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES

ES Rentals

    Independent Dating
    and  

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

    Cameron lowered the flag for the dead king of Saudi Arabia...

    But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Humanity must be at the heart of politics, says Jeremy Corbyn
    Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

    Joe Biden's 'tease tour'

    Could the US Vice-President be testing the water for a presidential run?
    Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

    Britain's 24-hour culture

    With the 'leisured society' a distant dream we're working longer and less regular hours than ever
    Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

    The addictive nature of Diplomacy

    Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
    Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

    Fashion: Ooh, Lady Chatterley!

    Take inspiration from DH Lawrence's racy tome with equally racy underwear
    8 best children's clocks

    Tick-tock: 8 best children's clocks

    Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
    Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

    Charlie Austin: ‘If the move is not right, I’m not going’

    After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
    Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

    How Isis profits from destruction of antiquities

    Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
    Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

    'If we lose touch we’ll end up with two decades of the Tories'

    In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
    Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

    The Arab Spring reversed

    Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
    King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

    Academic claims King Arthur was real - and reveals where he lived

    Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
    Who is Oliver Bonas and how has he captured middle-class hearts?

    Who is Oliver Bonas?

    It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
    Earth has 'lost more than half its trees' since humans first started cutting them down

    Axe-wielding Man fells half the world’s trees – leaving us just 422 each

    However, the number of trees may be eight times higher than previously thought
    60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

    60 years of Scalextric

    Model cars are now stuffed with as much tech as real ones