Tech firms feeling fine and may boost pay this year

Cross-sector Barclays Bank survey hints at potential wage increase in IT industry

The IT sector has emerged as one of the most optimistic in the country in an annual Barclays poll, with seventy-one per cent of IT firms saying they plan to increase their employees' pay in 2014.

The Barclays Employers Survey 2014 polled 684 businesses from a range of industry sectors, including 32 technology companies.

Sam Kemp, corporate director for the technology, media and telecoms team at Barclays, said: "This is a very optimistic sentiment and a shift from the wage freeze environment of the last few years, which can only be a positive for employee morale."

Telecoms companies are even more likely to offer raises, according to Barclays, with 77 per cent of respondents indicating they plan to boost wages in 2014. The travel industry was the only other sector ahead of IT when it came to confidence.

Interestingly, 65 per cent of employers in IT also said that it wasn't because employees were putting pressure on them to increase salaries despite the statistics indicating rising living costs for many in the UK.

Sixteen per cent indicated that wage pressure from staff was a major concern.

Twenty-one per cent of survey respondents thought employment would rise enough to trigger interest rate rises this year -- but that was before last week's news that unemployment had fallen to 7.1 per cent or by 167,000.

That is reportedly the largest quarterly fall in unemployment levels -- in numerical terms -- since autumn 1997.

Twenty-five per cent of tech companies -- before the unemployment announcement -- thought interest rates wouldn't rise until 2016 or even later.

"While businesses have quickly got used to a period of historically low rates, they should avoid complacency. It would be prudent for firms to model rate raises in their business plans to ensure they have sufficient cash flow to absorb any increase when it comes," Kemp warned.

"[But] many technology companies are thriving, with ambitious growth plans and we continue to see this sector as central to the recovery and growth of UK Plc."

Thirty-four per cent of tech firm respondents said they'd taken on apprentices in 2013, more than in 2012, and 40 per cent said they planned to hire at least one in 2014.

Again, this put the industry ahead of many others in the UK when it comes to promoting apprenticeships, Barclays indicated.

Across all industries, fewer than last year thought that boosting one's sales results in job creation, rather than believing that job creation can actually drive sales. This was a continuing trend, according to Barclays.