Griffin on Tech: Where the money is in tech right now
If you want to maximise the financial return on the IT skills you have acquired, contracting has long been the obvious path to take.
I know senior business analysts and project managers who have had contracts with government departments rolled over numerous times amounting to a decade or more of continuous work. They have become part of the furniture at the organisations they work for but unlike their public servant colleagues, are paid a daily rate rather than a salary.
In most cases, that suits them just fine. Sure, they don't get paid sick leave, annual leave and paid public holidays and have to organise ther business side of things themselves.
But for those willing to live with the uncertainty of not having a guaranteed full-time position, it can mean earning a 30% premium or more over an annual salary. A few years of that can put a serious dent in a house mortgage.
In a booming market where "digital transformation" is the new mantra and closed borders have led to a severe tech talent shortage, contracting rates are looking very healthy indeed.
Recruitment company Hays Technology, which in any given week manages around 3,000 IT contractors placed with organisations across New Zealand and Australia, has just published a daily contractor rates guide.
Here are some of the highest day rates for IT roles:
The top earners - daily contractor rates (before tax)
Cybersecurity architect $1,200 - $1,600
IDAM architect $1,200 - $1,600
Data architect $1,120 - $1,320
ERP/CRM architect $1,120 - $1,400
Cloud architect $960 - $1,440
Software architect $960 - $1,240
Enterprise architect $1,200 - $1,600
Program manager $1,200 - $1,440
Programme director $1,300 - $1,600
You can still earn decent money as a business analyst, a tester or managing IT infrastructure. But the list above shows where the really valued roles are in the tech world these days. They are in architecting identity management and access solutions, cloud platforms, cybersecurity, the business software that organisations run on and the management roles that keep these projects on track.
Hays hasn't published a rates guide since well before Covid struck in 2020, so its hard to gauge exactly what sort of inflation we've seen in IT contracting rates over the last two years. But when it comes to permanent staff and contractors alike, I regularly hear IT managers in the private and public sector tell me they are paying 10 - 20% more than they were a year ago for the types of roles listed above.
New benchmarking from the Government that aims to track spending on public servant contractors shows that IT contractors are at the top of the pack when it comes to par rates.
"Nine out of 10 IT jobs usually pay more than $100 an hour," RNZ reported last month.
Whatever talent we could find
Those with in-demand IT skills are in the midst of a golden era when it comes to their earning potential as organisations scramble to find the people to run their IT infrastructure, move them to the cloud and develop their applications.
"We were filling spots with whatever talent we could find at the time - fixed term, contractors, bringing on vendors… literally whatever we could do to fill the need," Mathew Tavendale, service portfolio - national digital services at the Ministry of Health, explains in the Hays contractor rates guide.
"The effect of that rapid hiring is that we now have a significantly larger workforce predominantly made up of contractors and fixed-term staff," he adds.
The borders opening are a double-edged sword for our tech workforce. Migrants can once again refresh the ranks, but many who hunkered down here during Covid will leave to reconnect with family or pursue even higher salaries and contract rates in Australia and elsewhere.
We may see further inflation in rates for some specialist IT roles this year. But every organisation has a limit to how high rates can do, says Robert Beckley, Hays Technology's regional director.
They are now "exploring levers beyond dollars" to attract talent, including flexible working arrangements and training opportunities.
Know your worth, Beckley advises contractors negotiating hour or day rates, but don't burn bridges or risk pricing yourself out of consideration. More importantly, consider, the "broader value exchange on offer".
It's not all about the money. There's no point pocketing $4,800 a week before tax as a contract cloud architect if you burn out after six months.
A career hedge against inflation
Beckey urges you to ask yourself: "Will you be treated as part of the wider team? Will you be working with new technology platforms? Does the work on offer match with your personal values? Will you widen your professional network?"
One thing is for sure - choosing IT as a career is looking like the smartest move you could make right now. If you are on that career journey you are helping insulate yourself from the rapidly increasing cost of living and high housing prices while picking up experience and skills that will be highly sought after for many years to come.
We need more Kiwis in high-paying knowledge economy jobs. That is part of how we build a more prosperous nation.
Now is your opportunity to make hay while the sun shines.
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