IT staff shortages worsen

Admiral, the fast growing IT services group, joined a lengthening list of IT companies warning of staff shortages and soaring salaries in the computing industry.

The problem, which recently led Logica, the highly rated IT group, to post a profits warning, is a result of surging demand for programmers to adapt computers for the millennium and the single European currency. Clay Brendish, Admiral's chairman said that he was having to award graduates salary increases of around 10 per cent, more than twice average wage inflation.

Richard Holway who compiles the Holway Report, the bible of the IT industry, said that a chronic shortage of IT staff meant average graduate salaries were rising by over 20 per cent. "Everyone is chasing graduates. If you are a graduate in this industry you are in clover. I'm surprised that Admiral has only had to pay 10 per cent more. Mr Brendish is doing very well. "

Mr Holway also warned that staff turnover in the computing industry was a serious problem. "Back in the early 1990s, no one left their jobs. Now staff turnover is around 20 per cent. Companies are having to award huge loyalty bonuses to keep staff until the year 2000."

Speaking at Admiral's half year results where the company reported operating profits 39 per cent ahead to a record pounds 7.2m, Mr Brendish said the downside to the buoyant market was the rise in staff costs and staff shortages. "We always have trouble recruiting people, especially as we want the best." Despite growing costs, the amount of new work meant that Admiral was able to raise margins.

Comment, page 17