5.5% Wage Inflation In Private Sector

[doogie]

Pay Rising At Double Inflation

If this is true, it is well above the level that the BoE considers inflationary and is definitely a point for the interest rate hawks.

[verolution]

Pay Rising At Double Inflation

If this is true, it is well above the level that the BoE considers inflationary and is definitely a point for the interest rate hawks.

i think the only thing rising at inflation these days is private sector pay and dvd players

[Pink Flamingo]

Not in my experience - the only people I know who get pay rises work in public sector administrative roles. The private sector people I know are earning less now than they were 5 years ago and are lucky to have jobs - esp in manuafacturing where redundancies are being made daily.

[Justice]

Anyone here got a 5% plus pay rise whilst doing the same job they were doing a few years ago or have you been forced to take a McJob and compete against all the immigrants now taking these low paid jobs. I call that deflation not inflations don’t you !

Now what was that a few years ago about a shortage of people with IT Skills. Strange we now have so many highly skilled individuals now out of work in this sector.

Public sector jobs and MP’s wages on the other hand have gone up so maybe if their wages were linked to private sector pay rises and the state of the economy then we would be in a better position than we find ourselves today.

Edited December 9, 2005 by Justice

[doogie]

For what it's worth, my firm (a private sector consulting firm employing about 3,000 people in the UK) has just agreed a UK salary budget of 6.3% for 2006.

[MarkG]

Good news: obviously the end of MEW-ing has forced people to look hard at what they're earning and how rising taxes and the real rate of inflation have outpaced their incomes. Unless Brown goes completely mad, I think it's safe to say interest rates are going up soon.

[Levy process]

Now what was that a few years ago about a shortage of people with IT Skills. Strange we now have so many highly skilled individuals now out of work in this sector.

Over-simplification I'm afraid, arising from the rather ridiculous notion of an "IT Sector". There's no such thing in my opinion; IT covers a massive range of things. Talking about the "IT Sector" is like talking about the "people-who-work-at-a-desk Sector", or the "people-who-work-outdoors Sector" - it covers a huge range of things.

In my (direct) experience, there is currently upward wage pressure, and difficulty finding suitably skilled candidates in many software creation and financial industry software support roles. There are the often-talked about moving overseas of "IT departments" and "IT jobs" within many companies too. That just goes to show that some things are on the up here, and other things are becoming less employable and are moving abroad.

As for the highly skilled individuals you talk about who are out of work (I can only take your word for it since I don't know any out of work myself), I'd say this: What proportion of the total work force are you talking about, given that there will ALWAYS be a few individuals who are out of work for whatever reason. Also, what are they highly skilled in? Is it yesterday's technology? Have they priced themselves out of the market by doing a highly niche job for which the niche has been made obsolete? The thing about many IT related jobs is that the technology changes very quickly compared to industries of the past, and you can't expect to do the same thing for your whole career.

[Casual Observer]

Now what was that a few years ago about a shortage of people with IT Skills. Strange we now have so many highly skilled individuals now out of work in this sector.

Do we? My 2 lads (IT graduates) keep getting calls from agencies they registered with 2 years ago, offering them interviews in the city.

[Gtr London FTB]

Yep, software development and consulting IT skills are definitely in more demand now than they have been for quite a few years.

Just because a few COBOL or VB coders can't find work doesn't mean anything imo.

[MarkyB]

5% here... with decent bonus's representing a good percentage...

so over 5% here... and we aim to be middle of the pack when it comes to rises.

Has the minimum wage only gone up by 2% recently?... to be honest working a 40hour week... youd have trouble renting a room, owning a car, and buying fuel. Let along other expenditure!

shame really...

[Mushroom]

Just the sort of headlines the Public Sector Unions' leaders will love when negoiating with the employers under instruction from GB to hold pay increases to official inflation levels.

[Justice]

no i am not talking about people who only know MS-Access and that.

C#, Javascript, ASP.Net, SQL-Server 2005

In 1999 you only need to know where the escape key was but today even with supposable marketable skills and a wealth of business knowledge you can only expect the same or even less in the pay packet than you got back in 1999 and unlike then, expect a period of being unemployed each year.

Whilst true the £20k jobs are still being created for now but you can earn much more as a tradesman on the tools and unlike in ‘IT’ these jobs can not be exported so easily so Blair is importing foreign labour to do these jobs too.

‘IT’ is going the same way as hosiery and engineering has gone in the past and now is the time to get out before everyone else jumps.

We all need the same protection as offered by the bar council to lawyers but these very lawyers are passing laws to make that illegal so figure that one out for yourselves.

[Casual Observer]

no i am not talking about people who only know MS-Access and that.

C#, Javascript, ASP.Net, SQL-Server 2005

In 1999 you only need to know where the escape key was but today even with supposable marketable skills and a wealth of business knowledge you can only expect the same or even less in the pay packet than you got back in 1999 and unlike then, expect a period of being unemployed each year.

Whilst true the £20k jobs are still being created for now but you can earn much more as a tradesman on the tools and unlike in ‘IT’ these jobs can not be exported so easily so Blair is importing foreign labour to do these jobs too.

‘IT’ is going the same way as hosiery and engineering has gone in the past and now is the time to get out before everyone else jumps.

We all need the same protection as offered by the bar council to lawyers but these very lawyers are passing laws to make that illegal so figure that one out for yourselves.

I keep hearing this kind of story, however, my son was in a 44k pa job 2 years after graduating and they're taking new people on. His colleague has just left for a higher paid job, also in the City. The IT magazine he gets has a table indicating how wages have/are rising due to skills shortage and, as I said earlier, agencies are ringing both sons because they can't fill jobs. The same magazine also reports that the number of IT grads has fallen over the last 3-4 years (from about 10% to 6% of all grads, I recollect)

Things look buoyant in their part of the IT industry at the moment.

[Justice]

I keep hearing this kind of story

Might not be a story then

agencies are ringing both sons because they can't fill jobs

Agents are the scum of the earth and often call whilst pretending they have a job so they can get contact names of previous employers so they can cold call and pester team leaders or project mangers into passing business their way. I’ve often been on the receiving end of these calls and it pi$$es me off. JobServe.com back in 2001 had millions of so called vacancies

number of IT grads has fallen over the last 3-4 years

yes so has the number of grads in coal mining, I wonder why that is.

Hopefully your sons need to physically be at work like network engineers else you may find they fail on hard times as jobs continue to go to India.

[Casual Observer]

number of IT grads has fallen over the last 3-4 years

yes so has the number of grads in coal mining, I wonder why that is.

And now IT salaries are rising due to skill shortages

[

agencies are ringing both sons because they can't fill jobs

Agents are the scum of the earth and often call whilst pretending they have a job so they can get contact names of previous employers so they can cold call and pester team leaders or project mangers into passing business their way. I’ve often been on the receiving end of these calls and it pi$$es me off. JobServe.com back in 2001 had millions of so called vacancies

Well, the interviews seemed real, by all accounts!

I keep hearing this kind of story

Might not be a story then

Smart-ass!

Hopefully your sons need to physically be at work like network engineers else you may find they fail on hard times as jobs continue to go to India.

Analysts/Programmers and Project Manager?

Edited December 9, 2005 by Casual Observer

[frugalista]

number of IT grads has fallen over the last 3-4 years

yes so has the number of grads in coal mining, I wonder why that is.

I have a good friend who is a computer science lecturer at a good uni and he is also in charge of admissions for his department. What he tells me about what happened over the last few years in UK computing higher education has been astonishing.

During the boom years (1999 - 2001 say) there was an expansion of courses and a lot of kids who would not "normally" have done computing degrees did them, presumably encouraged by all the hype. When the crash came there was of course a couple of years of hard times in the job market as we all know. However, the interesting thing is that demand for computing degrees from school leavers dropped *massively*. My friend explains this by saying that many potential students' parents have basically decided there is no money in it and have encouraged their kids not to do anything computer related. The reaction against computing degrees in his opinion was completely over the top.

UK higher education funding is not based directly on job market need, but rather on student numbers. If a department cannot fill the places, its funding gets cut. Many many computer science / computing departments have been massively cut back because of the falling numbers of students applying. Many experienced lecturers have been laid off and numbers of places have been drastically reduced.

So, I would guess that the fall in IT grads that we are seeing now has more to do with the *reaction* to the dot-com bust of prospective students than any downturn in jobs.

frugalista

[BuyingBear]

Pay Rising At Double Inflation

If this is true, it is well above the level that the BoE considers inflationary and is definitely a point for the interest rate hawks.

That's gonna annoy the public sector unions with their 2% peg, there was reports this morning of court service staff voting on strike action because of their "below inflation" ~2.7% rise, ironically this includes county court bailiffs IIRC.

[Casual Observer]

I have a good friend who is a computer science lecturer at a good uni and he is also in charge of admissions for his department. What he tells me about what happened over the last few years in UK computing higher education has been astonishing.

During the boom years (1999 - 2001 say) there was an expansion of courses and a lot of kids who would not "normally" have done computing degrees did them, presumably encouraged by all the hype. When the crash came there was of course a couple of years of hard times in the job market as we all know. However, the interesting thing is that demand for computing degrees from school leavers dropped *massively*. My friend explains this by saying that many potential students' parents have basically decided there is no money in it and have encouraged their kids not to do anything computer related. The reaction against computing degrees in his opinion was completely over the top.

UK higher education funding is not based directly on job market need, but rather on student numbers. If a department cannot fill the places, its funding gets cut. Many many computer science / computing departments have been massively cut back because of the falling numbers of students applying. Many experienced lecturers have been laid off and numbers of places have been drastically reduced.

So, I would guess that the fall in IT grads that we are seeing now has more to do with the *reaction* to the dot-com bust of prospective students than any downturn in jobs.

frugalista

..... all of which concurs with the experience of my sons, which I've related, above.

[BuyingBear]

Not in my experience - the only people I know who get pay rises work in public sector administrative roles. The private sector people I know are earning less now than they were 5 years ago and are lucky to have jobs - esp in manuafacturing where redundancies are being made daily.

Where about are you in the country PF? I know in the North East the public sector settlements have caused real market distortions.

[Justice]

"Well, the interviews seemed real, by all accounts!"

Yes but the number of applicants is well up on what it was and they demand more and more skills and this is not reflected in the pay.

“And now IT salaries are rising due to skill shortages”

wrong I’m sorry to say and having been at the coal face for such a long time I don’t need to read conflicting reports to know what’s happening.

You continue to think things are getting better and I’ll continue to know it’s not .

Why not start a new thread. you will find many here work in IT

[BuyingBear]

For what it's worth, my firm (a private sector consulting firm employing about 3,000 people in the UK) has just agreed a UK salary budget of 6.3% for 2006.

That's great and lets hope it's widespread and the unions force similar settlements on the public sector, to get secondary effects and real inflation (not just supply side) we need these sorts of settlements and a nice wage-price spiral, this will really let the inflation gene out of the bottle as far as the BoE are concerned and will leave the MPC unable to cut rates and looking to raise them to choke things off, just the sort of trigger a HPC needs.

You can see why Brown doesn't want this to happen and is wishing 2% on everyone, but just like job cuts and public sector reform he knows it's totally unachievable. First raw materials and energy roar ahead, secondary effects are felt by industry then finally the wage demands start kicking in, rinse and repeat. Guess what stage of the cycle we're in?

[Casual Observer]

"Well, the interviews seemed real, by all accounts!"

Yes but the number of applicants is well up on what it was and they demand more and more skills and this is not reflected in the pay.

“And now IT salaries are rising due to skill shortages”

wrong I’m sorry to say and having been at the coal face for such a long time I don’t need to read conflicting reports to know what’s happening.

You continue to think things are getting better and I’ll continue to know it’s not .

Why not start a new thread. you will find many here work in IT

I can only refer you to Frugalista's, Levy Proicess and GTR Londonon FTB's points above, my sons' experience and the comments I read in their industry journal, which all say the same thing.

Which part of the UK do you work in?

Edited December 9, 2005 by Casual Observer

[Justice]

Which part of the UK do you work in?

contractor so i get to see all over the UK and europe

[Casual Observer]

Which part of the UK do you work in?

contractor so i get to see all over the UK and europe

I know someone who just left a secure 60k IT job to become a contractor, and he's earning more still.

[oracle]

Pay Rising At Double Inflation

If this is true, it is well above the level that the BoE considers inflationary and is definitely a point for the interest rate hawks.

where did you get this????

if it's true then we are looking at the final nail in the coffin being hammered in quite soon(namely an IR hike when the VI's are expecting a cut)

for what it's worth most people I know who are employees are getting 3.5%ish......which is being totally swallowed up by rising council tax+utility bills.