Contract worker wages inflate prices study

Contract workers in the technology industry are earning excessive amounts and putting undue pressure on market prices, according to a new survey. In the last 12 months alone the costs for "legacy" application languages, like COBOL, have increased by 20 to 25 per cent.

IT marketing consultants, Paul Mac Donnell & Associates, has published the first index of costs for a combination of computer skills, sponsored by Computer People Ireland. Based on daily rates charged by IT contractors, it tracks market trends in the sector.

Two major events affecting the market for IT skills are the millennium date change and the euro. The current high level of shortterm demand is driving rates upward, but once the Year 2000 problem and the euro are dealt with, it appears likely these rates will fall. Compounding the problem is the shortage of skilled personnel to handle these issues, and many companies have been forced to look abroad for personnel.

Commanding the highest daily rates are experienced professionals in languages like C, Java and OOD, earning as much as £2,000 per week. Rates for Java are £335 and £425 per day for programmer and team leader/analyst positions respectively. Internet skills will remain at a premium for a longer period, as an increased understanding of the Internet's contribution to future success is driving demand in this sector.

The results of the first index show that mainframe languages such as COBOL and PL/1 are generating daily rates of about £285 for a programmer with three or more years experience, and £368 for a team leader with similar experience. An Oracle programmer with three or more years experience will typically cost £274 per day and a team leader with the same experience £471. The skills shortage has also resulted in an increase in contract length. Contracts were normally for 18 weeks but now offers of 12- and 18month terms are common. Commenting on the figures, Ms Grainne Martin, branch manager of Computer People Ireland, said: "There is some evidence that contractors are driving rates to a level that will do them and the industry long-term harm. Both contractors and employers should start considering the benefits of longer term relationships in terms of training, career development and employment prospects."