Corporate spending is up, salaries are rising and the local technology job market is staging a comeback, but skills shortages will continue in some areas, young ICT professionals will continue to leave our shores and employers, especially government, may find it hard to attract and retain top talent, according to recent reports.

A Greythorn Salary Index released this month predicts a 5 percent rise in corporate spending on IT in the next year and an average salary rise of 3 to 4 percent across the board. These findings are echoed in the Ambition Winter report released this week which predicts marginal rises in IT salaries but 10 to 20 percent salary rises for high-calibre application development specialists, development team leaders, database managers, architects, security specialists and testers.

Ambition technology managing director Paul Lyons said companies are generally keeping a close eye on the market to ensure they are offering competitive but sensible salaries.

There will be shortage of skills in niche areas, specific industry sectors and across geographic regions, according to the Greythorn Index. It predicts skill shortages will continue to be acute in areas like ERP (SAP), J2EE and enterprise application integration. It also forecasts a new interest in open source technologies.

The Ambition report found there has been strong growth in the investment banking sector with equity derivatives, FIX (Financial Information eXchange), Seats (Stock Exchange Automated Trading System), Clicks, client connectivity, Exchange connectivity, algorithmic and automated trading platforms development skills driving recruitment demand.

The commerce and industry sector is seeing particularly high demand for ERP and EDI skills whilst in the vendor market, storage and security specialists are highly sought after along with Java, VB.Net, Unix and Windows skills for upgrade projects, according to the report. It also found that the government sector has seen an increase in demand for IT security and storage specialists, testers and business analysts.

"Storage and security professionals are in demand across every sector, but especially in our vendor and government clients and often as a result of governance and privacy legislation as well as improving capability of data storage and access systems," Lyons said.

Lyons said that although the overall ICT recruitment picture was looking healthy, there are some worrying aspects as well.

"One significant trend is that we are increasingly losing a lot of young people - particularly to the UK, but also to the US and Asia. We see Aussies going abroad and not coming back, which is a worry in the bigger picture," he said.

The UK is also expecting a significant demand for IT professionals in 2008 through to 2010 in the leadup to the next general election as there will be demand for professionals to work on the National Health Service and ID card initiatives, and then more demand for IT professionals again to prepare for the 2012 Olympics, Lyons said.

"The opportunity to work on large-scale IT projects is not as great [here] as overseas and an ICT brain drain remains a very real threat to the growth of the sector in Australia," he said.

Dennis Furini, chief executive officer of the Australian computer society, said that while he agrees that Australia's young ICT professionals are increasingly going overseas, he does not necessarily believe it is a bad thing.

"However, we must make sure that they come back with the experience and skills. On the other hand, we also expect young talented people from overseas to come to Australia to work as well," he said.

Furini believes that employers need to put into place measures to actively retain people though retraining programs to ensure their skills are up to date and in areas that will meet future needs.

"Retraining has not been happening, because there has until recently always been a ready pool of people available -a spill-and-fill mentality rather than a skills foresight and development approach. Migration is not the answer to skill shortages. We must retrain and retain our local workers," he said.

Government shortage

The skills shortage looks set to hit the government sector harder than the private sector, according to both the Ambition and the Greythorn reports.

"One noticeable impact of the skills shortage is that companies still insisting on multiple interviews and lengthy recruitment procedures are losing high-calibre candidates who will accept offers from faster moving companies that will be perceived as dynamic workplaces. Recruiters within government departments are often losing candidates to other sectors as procedures and due diligence slow the process down," the Ambition report found.

Both reports also say that many government departments are showing a willingness to engage IT professionals with attractive, family-friendly packages and market rates like those on offer in the private sector so they can effectively compete in the job market.