Higher IT salaries in Australia and New Zealand amid talent crunch

The demand for IT manpower is set to increase over the next few years in Australia and New Zealand (ANZ), with the digital economy expected to contribute more to the gross domestic product (GDP) of both countries.

By 2020, the IT sector is expected to make up 7% of Australia’s GDP. In New Zealand, it already accounts for 8% of the country’s GDP, and contributes more than NZ$6.3bn in exports.

This has already pushed up wages of IT professionals in ANZ, going by an annual IT salary survey conducted by TechTarget, which found that average IT salaries in both countries has grown from between A$80,000 and A$150,000 in 2016, to between A$100,000 and A$150,000 this year.

As expected, IT salaries commensurate with work experience. Those in senior management roles with an average of 21 years of experience are drawing nearly A$250,000, an increase from around A$170,000 in 2016. Developers also saw their salaries grow from an average of nearly A$130,000 in 2016 to about $149,000 in 2017.

Some 44% of 336 survey respondents said they received salary increments in the past year, while 21% were given a bonus. The upside in remuneration is expected to continue, with more than 46% of respondents anticipating a bigger pay package next year.

Despite higher salaries, and the fact that IT is Australia’s fastest-growing sector, growing at a rate of 2% compared to 1.4% per annum growth for the workforce as a whole, the country is still losing skilled workers to a globally competitive market.

For years, Australian companies have been relying on skilled overseas workers through the 457 visa programme, which the government is replacing with a new scheme called the Temporary Skill Shortage visa by 2018.

In response to concerns that the new scheme could make it harder to recruit skilled IT professionals from outside Australia, the government said it will increase the visa tenure for many IT and senior management roles from two to four years.

New Zealand faces a similar talent crunch, though its technology industry association NZTech has said that relying on immigration to plug the skills gap is no silver bullet. Instead, it plans to introduce digital technologies to New Zealand schools from 2018 for all ages, according to NZTech chief executive Graeme Muller.

The tight IT labour market in ANZ, however, has not led to widespread job movements in the technology sector. According to the TechTarget study, only 14% of respondents are actively looking for a new role at another company.

About 29% are happy in their current jobs and plan to stay with their employers in the immediate future. Nearly half (48%), however, are open to new opportunities although they are not actively looking out.

When it comes to training, roughly half of the survey respondents said they received formal training – but only when it was needed or justified. Of those who did not receive training, 70% felt that their career progression could be an issue.

ANZ’s IT industry also lacks gender diversity. Although women make up 46.2% of Australia’s workforce, only 31% of 435,000 people in IT listed on LinkedIn Australia were women. In New Zealand, only 21% of IT workers are women.

Efforts are underway to improve the gender mix. Some 43% of ANZ respondents in TechTarget’s survey said their companies have a plan in place to improve the women-to-men balance in IT teams. About half believe recruiting more women could help to alleviate the skills shortage.