IT professionals’ shortage fuels wage inflation – by Joanna Ripard

Wage inflation in Malta’s information and communications technology sector has been fuelled by supply of IT professionals increasingly falling short of demand, a report has found.

 

The shortage is expected to continue to plague the industry over the next 12 months, and will be acutely felt as igaming companies – offering above-average packages – develop their presence on the island. Wage inflation will continue to feature over the next year, but its momentum will weaken. More than 60 per cent of companies which responded to Misco’s 2012 report on the salaries and benefits in the ICT sector confirmed that recruiting IT talent is becoming even more difficult locally. More than 85 per cent of companies believe recruiting constraints will remain unchanged or worsen.

 

The report covers 700 remuneration packages gathered from local ICT companies. Just over 55 per cent of participating firms employ up to 50 people; 34.5 per cent between 51 and 150 people, and 10.3 per cent more than 150. Compiled using information gathered between February and April, the study found that firms have had to enhance salaries and benefits to retain key team members. Some remuneration packages have seen increases of up to 19 per cent.

 

The report covers 22 posts in several ICT companies based in Malta ranging from managers and engineers to analysts and developers. The ICT companies included in the sample ranged from IT service firms, software houses, web developers, IT departments in the financial services sectors, mobile telephony operators, and organisations involved in satellite technology. “Wage inflation could be very damaging to the sector’s competitiveness,” Misco’s business development director Morgan Parnis and head of the business advisory unit Ritienne Bondin said.

 

“The need for further training and education is, as such essential, to retain competitiveness. Meanwhile, non-Maltese are potentially being recruited for highly specialised jobs. However, there is still a great deal of poaching going on.” Information technology managers saw their remuneration packages increase by four per cent this year, with other managerial posts seeing rises of between one and two per cent. But the highest increases have been enjoyed by people occupying posts like software testers (19 per cent), senior software developers (12 per cent), systems and IT engineers (nine per cent), and systems analysts (eight per cent). The salaries of quality analysts and systems analysts remained stable, but those of junior software developers and of web developers dropped by two per cent over the past year.

 

Misco’s research has found that, on average, IT personnel engaged with online gaming companies are paid a total remuneration package that is five per cent higher than that paid to people occupying similar roles elsewhere in the IT industry. This has made recruitment and retention even more challenging for other players. The growing financial services industry has also been a remuneration game-changer for the IT sector, particularly as heavy investment in cutting edge technology infrastructure has created significant demand for professionals. Besides above-average remuneration, financial services players have also had to resort to offering special conditions like reduced summer hours, and recruiting non-Maltese.

 

Fringe benefits – including company cars, health and life insurance, club memberships and other allowances – make up to 17.5 per cent of the total packages attached to some roles like managers, technical specialists and software developers. The report does not delve into the taxability or otherwise of the perks. Almost one in four companies use performance as a yardstick to determine increases or revisions in remuneration packages. Twenty-two per cent of firms determine increases and revisions according to pre-established salary scales, 22 per cent use market changes, 11 per cent company profitability, and just six per cent individual negotiation.

 

Meanwhile, 89 per cent of firms use a performance management system throughout their organisation, while the rest said they did not have one in place. In 56 per cent of the participating companies, all employees below management grade are entitled to overtime. Three in four companies offer a flexible hour scheme to their teams, while 25 per cent offer employees shorter working days in the summer. At the opposite side of the spectrum, the talent pool seems fully aware of its market value.

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