Financial skills shortage boosts middle managers' pay packets

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Middle managers in the financial, accountancy, construction and IT sectors are enjoying salary rises of up to 15 per cent because of increased company budgets and staff vacancies, according to search and recruitment group MRI.

Companies limited pay rises across the board for mid-level managers last year by between 1 and 2 per cent, while most executive pay was frozen in 2002 after the downturn.

But thanks to a shortage of professionals in these booming sectors, recruitment executives say that, since April, companies have been forced to offer pay increases of up to 15 per cent to attract and retain staff.

Steve Mills, chief operating officer of MRI, which finds jobs for middle managers, said: "We are starting to see salary pressure in some areas. It's a bit early to start talking about trends. But we are pretty much at full employment for our clients."

Mid-tier managers in other sectors are experiencing lower wage inflation, of around 4 per cent, he added.

Mr Mills said job hunters were becoming more confident when negotiating pay packages. He said he was seeing a return to signing-on bonuses, which almost disappeared during the slowdown years of 2001 and 2002.

One MRI client, a company in the banking sector, had recently been looking for a chief architect for its IT Systems department, having made a key acquisition. The salary envisaged for the position had been between £54,000 and £65,000. But the successful candidate was eventually hired on £80,000 a year, plus relocation costs and benefits. The salary was higher than that of the individual's immediate manager.

A report published last week from the City recruitment company Morgan McKinley found that newly qualified chartered accountants can expect an increase of up to 10 per cent on starting salaries this year.

Figures from the Office of National Statistics last month also showed that underlying earnings across the board were rising at their fastest rate in two years.