Pay for IT consultants jumps 17 per cent

IT consultants' wages have soared 17 per cent in the past year on the back of record mergers and acquisitions and a boom in public sector outsourcing, according to research by the Association of Technology Staffing Companies (ATSCo) and SkillsMarket.

The average pay for freelancing IT workers rose from 41,500 in 2005 to 48,383 last year, as mergers and acquisitions hit the highest level since the dot com boom in 2000, said ATSCo. A total of $339 billion was spent on UK companies in 2006, pushing up demand for consultants.

"Post-merger integration of IT systems can be a hugely complex task, and companies rarely have the resources to manage the process internally," said Ann Swain, chief executive of ATSCo.

Massive public sector IT projects - such as the multi-billion pound NHS IT programme and the 2.3 billion Ministry of Defence Information Infrastructure Future project - has driven spending on external consultants up 33 per cent to 2.8bn in 2006.

"The public sector outsourcing market continues to grow despite recent concerns about how much is being spent on consultants," said Swain. "The primary driver of this growth is the scale and complexity of public sector IT programmes, which cannot be managed in-house, and often involve multiple consultancies working on the same project."

The increasing use of external IT consultants means workers with the right skills are in high demand which drives up wages, said Swain. "Consultancies have embarked on aggressive recruitment drives in recent months to cope with the volume of M&A business, but skills are now in very short supply," she said. "Consultancies like LogicaCMG have told the market that if they cannot get the staff they will have to turn work away."