IT salary north-south divide narrows

London deserters fuel higher salaries

IT staff leaving London are helping to close the salary gap between the capital and rest of the country, according to a leading recruiter.

The pay gap shrank by three percent in 2006, suggests new data from E-Skills, a government-licensed not-for-profit advisory group on IT and telecoms skills development. The average salary outside London is now £35,000 compared to £43,000 in the capital.

Jon Butterfield, managing director of ReThink Recruitment, believes that London deserters and the increasing mobility of IT roles are driving the change.

“The price of living in London will continue to drive people out,” he said. “The anecdotal evidence is that a lot of IT staff are moving out of town now IT can be run from anywhere.”

Also, there remains strong demand for UK IT skills in the regions as companies get to grips with Windows Vista and reverse previous strategic staffing decisions.

“Public-sector organisations are trying to back-fill roles that were given to consulting contractors at £1,000 a day, and a lot of work given to offshorers is coming back,” Butterfield said.

Manchester, in particular, is benefiting from the movement, he suggested, with companies such as the BBC and Royal Bank of Scotland expanding in the north-west. The south-west is also benefiting from technology research in the area.

“You can live in Manchester and be 20 minutes from the countryside, whereas if you move just outside of London you’re still paying stupid prices,” Butterfield said.
Richard Nott, website director at recruitment site CWJobs, agreed that the delta is reducing, albeit slowly.

“The overall gap is closing but there are still disparities”, Nott said. “The best salaries are in the City of London, then the rest of London. If you want to earn top dollar, the finance sector in the City is where it’s at with the Merrills [Merrill Lynch] and the Goldmans [Goldman Sachs]. A Java developer in London will still earn more than a Java developer in Birmingham or Manchester, but contractor rates tend to be closer than permanent rates.”

However, Nott disagreed with the idea that there is a significant drift away from London among IT staff.

“You get the odd person who drops out and goes off to run a pub in Somerset but I don’t hear about people moving out of London to work in IT.”