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JM Digital Index – Q4 2012

JM Digital Index – Q4 2012

Introduction

Welcome to the JM Digital Index. As one of the UK’s leading digital and creative recruiters, our aim is to provide you with a snapshot of rates and salaries within the digital sector. The information within this report is based upon our recruiters’ qualification of candidates’ rates and salaries over the last three months.

Market Overview

The UK digital market continues to thrive - its importance to the UK economy is highlighted not only by Government initiatives, such as East London’s Tech City, but also by the Olympics opening ceremony. In fact, Britain’s digital economy is already shown to take the biggest share of national GDP in the G20 and according to a recent report that share looks set to increase by a third by 20161. In contrast to other industry sectors, demand for digital skills continues to outstrip supply and we are finding that it is becoming an increasing issue for employers. Policy Exchange, a UK think-tank, recently highlighted this problem and raised concerns over how immigration rules are stopping the UK's digital start-ups from attracting the best- qualified staff2. This is in contrast to the likes of Silicon Valley where companies can tap into the global talent pool. Over the last six months we have seen the demand for permanent IT workers with digital skills increase by around 25%. The demand for IT contractors also remains strong, despite a slight dip in contract vacancies during the summer months. Both salaries and contract rates have, however, remained static over the last six months.

Video-on-Demand (VOD) sector booming

Those skills that are most sought after include mobile, tablet, e-commerce and social media experience. There is, however, another area that is causing the demand for digital skills to escalate - Video-on-Demand (VOD). This is a booming industry that has grown out of virtually nowhere within a relatively short timescale. Just five years ago the online TV and movie market was worth £11m, next year it is expected to increase to a phenomenal £379m according to Screen Digest3. The demand for IT workers within this area is being fuelled by new market entrants and the expansion of existing organisations, especially as it is now a race to pick up as many subscribers as possible to their services. In the last 12 months alone, Netflix and YouView entered the UK market to compete against the likes of BlinkBox (a Tesco Company), LoveFilm (an Amazon company) and BSkyB. Demand is being fuelled further by the emergence of an increasing number of VOD consultancies that need IT workers to sustain their rapid growth. The rising demand for VOD skills is also supported by statistics on IT Jobs Watch4. It showed that the salaries and contract rates advertised for IT workers with VOD experience across UK recruitment websites increased by 12.94% and 4.16% respectively over the last 12 months.

VOD workers can charge a premium

With a lack of IT workers available to fulfill supply we are finding that individuals with VOD experience can charge a premium for their services, especially those with UX capabilities. For example, UX designers in this area can earn as much as £500 a day / £70k p.a. whilst project managers can demand up to £500 a day / £80k p.a. Similarly, visual designers can ask for up to £400 a day / £60k p.a. Those individuals who have experience in VOD along with multi-platform, e-commerce and responsive design experience are in even greater demand - they can cherry pick who they want to work for. The combination of these skills is highly desirable due to the nature of VOD services - being able to make the experience as intuitive as possible across multiple platforms whilst also making it a commercial success. We do not expect to see any let up in the demand for VOD skills any time soon as this sector looks set to grow. If you are an IT worker, this is a great area to be in at the moment.

Mobile banking revolution

The popularity of smartphones, evolving consumer expectations and the emergence of competitors from outside the financial industry has also started a mobile banking revolution. This has triggered a rising demand for individuals with mobile banking skills. To reflect the increasing significance of this area, we have added a salary and contract rates table to specifically cover skills in this area. You will find that the majority of large financial institutions already offer basic mobile functions such as account access, ATM/branch locators and bill payment. We believe the 2012 plan for these financial institutions will most likely focus on mobile RDC (remote deposit capture), P2P (person-to-person) payments and actionable alerts. We are, however, finding that mobile point-of-sale payments are not currently on the radar for most firms. Financial institutions have a good understanding of what it will take to promote mobile POS systems but they are currently dubious about investing in products that have unknown consumer demand and merchant interest.

Mobile banking is maturing rapidly

Nine out of ten financial institutions have a mobile banking application that provides basic account access, and almost all provide ATM and branch locators, transfers between accounts and bill payment. The larger financial institutions with assets of $100 billion or more are the market leaders for adoption of new technologies, such as contactless/point-of sale (POS) payments, person-to-person (P2P) payments and remote deposit capture. None of the financial institutions as of yet offer remote payments, in which a mobile device is used to make a purchase from a non-physical location, such as online shopping via mobile browser, or trading securities as an element of mobile banking.

Skills in highest demand

Those skills/roles that are in high demand are broadly the same across both permanent and contract roles. Their demand is, as previously mentioned, influenced by the area in which they are applied, such as within the VOD or mobile sector. Those roles that we have are seeing a significant demand for include: • Mobile Developers • User Interface (UI) Developers • Mobile Interface Developers • Digital Project Manager • Responsive Design • VOD Product Managers • E-commerce Project and Programme Managers • E-commerce Business analysts

Contract Market Overview

Demand

Demand for IT contractors in the digital sector still remains extremely high when compared to any other industry sector. There was, however, a slight dip in the demand for these skills during the summer months of August and September. In particular, we saw the demand for UX and project managers drop by around 10% during these months. This dip did not last long though as demand was seen to return in October to the same levels seen earlier this year.. Those skills that were an exception to this trend included Video-on-Demand (VOD), mobile, tablet and e-commerce.

Supply

IT contractors in the digital sector still remain in short supply and as a result continue to be able to cherry pick what they want to do. This is especially the case for contractors who possess VOD, mobile, ecommerce and social media experience. Those individuals who are skilled to work across multiple platforms are in particularly short supply. Similar to earlier this year, contractors do not tend to be on the market for more than a two week gap before being snapped up.

Rates

Overall contractor rates have remained the same over the last six months. There was a slight drop during the summer months of August and September as demand was seen to drop but rates have since recovered.

Contract Rates

 

Permanent Market Overview

Demand

We have seen the demand for permanent IT workers in the digital sector increase by around 25% over the last six months. We are still finding that most companies prefer to take on a permanent employee rather than a contractor, simply because they are considered more cost effective.

Supply

The supply of digital IT staff still remains a problem with demand continuing to outstrip supply. The trend we observed earlier in the year in which some contractors were being tempted towards taking permanent roles for job security has dwindled out. We are now finding that less and less contractors will consider permanent roles unless the role and conditions are particularly right for them.

Salaries

We have found that salaries have, in the main, remained the same since the beginning of the year.

Source of Data

Permanent Market Statistics

The figures quoted are base salaries and do not include bonuses and benefits. To avoid generic bracketing we have taken the mid-range of salaries of candidates we have qualified over the last 3 months. There will be variables with specific roles and clients may place different emphasis on certain skills. Bandings may also vary, but the levels are designed to give an indication of seniority and experience.

Contract Market Statistics

The figures quoted are based on placements, budgets and what contractors have been willing to accept over the last three months. These rates are rounded off to the nearest £50 increment. Similar to permanent there will be variables with specific roles and certain clients may place different emphasis on certain skills.