For those who know their way around bits and bytes, it's a boom time for employees. For those doing the hiring, though, the job market is turning into a major headache. Seventy per cent of companies surveyed say they are having difficulties recruiting staff with a background in information technology (IT), according to job agency Computer Staff Recruitment's annual technology salaries and skills survey.

At the same time, 80 per cent say they plan to increase their IT workforce over the next year. That shortage is driving salaries up - programmers, analysts, systems managers and technical support have seen average increases ranging from 10 to 30 per cent over 1996. IT people are needed across just about every business sector these days, but the real pressure in Ireland is coming from the intense demand from the IT industry itself, according to the employment agencies that work to source employees for IT firms.

The IDA's vigorous and successful campaign to lure international technology companies to Ireland has packed the country with companies drawn by official claims that IT employees are plentiful and cheap.

But that's no longer the case, a fact which has been officially acknowledged at least at some level, says DCU lecturer in communications, Mr Brian Trench, who is also a member of the Government's Science, Technology and Innovation Council. "The IDA is now, and as of quite some time ago, singing a different tune - at least for internal consumption, if not for external consumption," he says. "We'll not be seen as such an attractive location unless we do something."

Some multinational IT firms have privately and publicly expressed concern. Speaking to a group at the new SAP Service and Support Centre in Dublin, managing director of the centre Mr Stefan Blaschke said the giant German software firm had been led to believe that it was much easier to source employees. Instead, it's a constant scramble. "There are many companies competing for the same employees," he said. "Here, you have to be attractive [as an employer] all the time." However, like many multinational employers, he notes that it's still much easier to find employees here than in his home market.

"There is a skills shortage in Ireland, but it's not as acute as elsewhere," says Ms Liz Neligan, managing director of Computer Staff Recruitment (CSR). But, she notes: "Ireland should be sold as a source of a quality, highlyeducated, flexible workforce, rather than a cheap workforce."

IBM, which has a long track record in Ireland, claims the company is having few difficulties in finding employees in most areas, but then, they know the Irish job market well and where to come in terms of salary and prerequisites. IBM has a massive appetite for employees: its new Mulhuddart campus has opened with 250 employees, which will double over the next few months and within two years will employ 2,850.

Ms Ann Keenan, IBM's director of human resources, says that IBM's approach to a difficult job market is to offer a "career path" - there's scope to move vertically within the company, from call centre positions on up. IBM will also train employees into new jobs. "You look after people the best you can," she says.

Digital Equipment Corporation takes a similar approach, but business development manager Mr Philip Maguire adds that companies do have to pay well for employees with the right skills. He searches for people in both the Irish and British markets, plus he gets a smaller number of applications from further afield.

"It's getting more difficult," he says. He oversees Digital's contracting division; when he started the division three years ago, he had 20 contractors. Since then, the demand from corporations for contract employees has grown so precipitously that Digital maintains 350 contractors on its payroll - 1,000 per cent growth.

And hiring potential contractors can be difficult. "A lot of graduates have four, five, six job offers," says Mr Maguire. "A lot of graduates wouldn't even show for the interviews. They would call us and say, `I've got four job offers. Will you pay me X?' Certainly, with that attitude, we wouldn't hire them anyway."

But someone else inevitably will. "At the moment it's an employees' market," says Ms Ursula Sherlock, careers officer at Dundalk RTC . "Certainly at the diploma level there would be a big demand for technicians. It far exceeds the number of graduates." She says the RTCs now figure on the corporate "milk rounds", where in the past those companies would only have gone to the universities.

In some areas, entire classes will have finalised job offers well before the ink has dried on their diplomas. The big technology firms like Intel have a liaison officer who deals with individual colleges, for example. "Last year, Intel gave everyone in the relevant classes a guaranteed interview. Students didn't even have to submit a CV," says Ms Sherlock. This year, demand is even higher. "It's going to be a good year for our students," she says with satisfaction.

However, the appetite of companies for IT graduates worries some in the Government, industry, and third level educational system. The fear is that if supply cannot meet demand, many companies will just go somewhere else. A long delay in the publication of a White Paper addressing the relationship between industry needs and educational output prompted the establishment of an interim skills group last summer to study the situation and make recommendations.

Chaired by Trinity economics professor Ms Frances Ruane, the group identified a critical need for technicians for the electronics industry, software people, and languages for teleservices. The Government has responded by increasing places in colleges: an extra 1,000 software graduate places, 750 technician places, 1,000 language training places at the RTC and post Leaving Certificate level, and an increase to 1,250 in advanced technical skills (ATS) intensive learning places. By the year 2000, the universities should have an extra 5,000 students in software and electronics.

Prof Ruane is quick to point out that demand for employees does not mean a serious shortage: "In the Irish economy the labour supply side is flexible" due to returning emigrants and an influx of foreign workers. She says of the group: "We were responding not to shortages but the possibility of shortages."

Similarly, Mr Trench does not believe the current tight market translates yet into a fullblown crisis. He thinks that while the Government shouldn't sell what it doesn't have - an unending supply of low-cost IT labour - neither does it have the responsibility to tailor graduates for industry.

"This expectation that universities will ratchet up the system to produce graduates is unrealistic," he says. "The skills issue is an issue for the industry."

CSR's Ms Neligan agrees. "I don't think it's solely the responsibility of the Government to produce results for companies. They already are offered huge grants and tax breaks," she says. "Certainly it's partly their responsibility to go part of the way towards skilling people."