North East now one of the most expensive cities for tech talent in the UK

Demand for IT skills has seen tech professionals receive a 22% pay bump over five years.

Tech professionals in the North East are among the highest paid in the country, with salaries soaring by 22% over the last five years.

In 2012 IT professionals working in Newcastle and the surrounding region were the lowest paid in the country with a median salary of £33,225.

But the rise of the North East’s technology sector has driven up pay so that the average IT professional now earns £40,559.

According to the figures, which were analysed by SJD Accountancy, North East IT workers are now the fourth highest paid in the country, after those in London, the South East, and the East of England.

The North East’s 22% pay increase is also far higher than that of London’s, which grew by 8.9% from £45,930 to £50,000.

Derek Kelly, chief executive officer of SJD Accountancy, said: “The continuing success of the North East over the last five years has made it one of the most expensive regions for tech talent in the entire country. Finding the right tech talent in Newcastle is becoming increasingly difficult, forcing businesses to offer more money and other benefits.

“As permanent vacancies become harder to fill, the use of contractors to plug skills gaps is increasing. Many IT professionals prefer to work as contractors, and in a candidate tight market, they have more bargaining power to turn permanent jobs into contractor roles.

“When people think of the tech sector in the North, Manchester is usually the first city that comes to mind, but in many respects the rise of Newcastle has been more impressive. IT professionals in the North East earned £3,000 per annum less than their counterparts in the North West in 2012. On average they now earn £2,000 more, which is a stunning reversal in such a short period of time.”

The increase in pay has highlighted the region’s growing skills gap in the technology sector, with pay rising as firms continue to fight to attract the best talent.

According to accountancy firm RSM the number of new tech companies being set up in the North East rose by 78% in 2017.

Last year 173 software development and programming business launched in the region last year, compared with 97 companies in 2016.

Nationally, there were 10,016 technology businesses incorporated in 2017, with year-on-year rises recorded in every region in the UK, figures which validate the Chancellor’s recent claim during the Spring Statement that a new tech firm is set up in the UK every hour.

Mr Kelly added: “The long-term presence of Sage in Newcastle gave start-ups a ready-made skills base to tap into. As demand for tech skills has increased, the local talent pool has dried up, which is pushing up pay.

South West, £38,226

North West, £38,044

East Midlands, £35,944

 

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