IT employers are paying over the odds to hang on to qualified IT staff as the skills shortage reaches massive proportions.

Frenzied demand for Java, Visual Basic and C++ skills has produced a boom in IT salaries over the last 12 months, fuelling calls for a focus on training to keep up with demand.

A survey conducted by Basda, the trade association for the business software industry, among its members found that salaries in all sectors of the software industry compare favourably with other industry sectors. On average IT sales managers now earn base salaries of £46,600 and graduate trainees stand to earn starting salaries of up to £25,000.

One company, which already pays above average salaries, said it recently lost one of its senior programmers when he was offered an extra £13,000 a year to move on.

The survey also highlights huge geographic variations. Programmers in Wales earn on average just £14,000 basic salary, compared with those in London, Thames Valley and other hi-tech hot spots earning up to £35,000 with a £15,000 car allowance.

Basda members blame the redundancies from the Big Five consultancies, which released a lot of high-salaried staff into an already over-hyped market, and the effects of the government's IR35 legislation for high salary levels, particularly in the contract market.

Basda chairman Dennis Keeling said the salaries were high even though the quality of many IT job applicants was "unsatisfactory".

"We are way behind on courses geared towards what the industry wants. Universities are still teaching coding in Cobol and Pascal - they need to update their curricula."

Keeling also called for a greater focus on short, intensive courses to retrain existing IT staff.

• The detailed Basda Salary Survey is available in spreadsheet format for £200 plus VAT, or £100 plus VAT for Basda members.

• The number of companies which provide company cars for IT executives has declined sharply over the last year, according to a survey from Computer Economics. A study of more than 500 companies found that more companies were offering car allowances as part of flexible benefits packages.

First published in Computing