Devil's Advocate: Are IT pros well paid?

There's in an assumption that there are national shortages of IT professionals and that they do difficult jobs - so they are well rewarded. Martin Brampton questions this logic...

I'm confused. Government rules allowing foreigners to come here to compete for IT jobs have outraged contractors. Others are saying sniffily that they are getting their just deserts for being overpaid in the past. But how do we decide whether there are skill shortages, how much people should be paid or whether foreigners should be allowed to compete?

The IT skills shortage has been a perennial topic. It seems to melt away the minute there is the slightest economic downturn. While it is being touted, I always wonder how real it is. If employers were to offer higher salaries, would they be able to hire the people they want? Isn't that the way scarce resources are supposed to be allocated in a market economy? With higher pay, more people are attracted to work in IT and the problem is easily solved.

In the world of top executives, the argument usually runs something like that. We are told there is a global market for executive talent and so remuneration must climb to dizzy heights for us to attract the most talented.

Curiously, it is assumed the best talent must come from the richest countries, notably the US, thus driving executive salaries to American levels. The idea there might be equally talented people in poorer countries, willing to apply their skills for much lower remuneration, is never mentioned.

When it comes to a shortage of talented IT people, quite the contrary seems to apply. It is immediately assumed that by relaxing visa restrictions we can bring in skilled people from poorer countries at rates that will drastically undercut our own highly paid contractors. (In fact, the issue really applies to all kinds of worker, employees just as much as contractors.) This seems in flat contradiction to the principle that applies to executives - that would imply that for world class IT systems, you also have to hire world class people on top salaries.

It brings us to the question of why there should be restrictions on people moving around the world at all. We have more or less done away with restrictions within the European Union. In fact, only quite small numbers of people have actually moved. I noticed that there was a French guard on one of GNER's White Rose Train services. But they used rolling stock leased from Eurostar, so perhaps he came along with the train.

Restrictions on people from outside Europe are much stricter. Why is this? The way politicians talk, poor countries have only themselves to blame and, in particular, they probably have bad governments. If that is the explanation, then we could introduce global competition among governments by allowing free movement of people. The best governments would attract people, while the worst governments would lose people. That way, bad governments would be forced to improve or eventually find themselves without anyone to govern.

How do we decide how much money people should be paid? It seems obvious that the market theory is not being put into practice, otherwise there would not be any shortages at all, unless there was a global shortage of all types of worker. Any other shortage would be purely temporary while people adapted their skills to match the demand, driven by financial inducements. But in most organisations salaries are assessed at least as much by reference to comparisons that involve fairness as by market factors. Only in a few sectors such as pop stars and professional footballers does the market seem dominant.

If the idea of a market for skilled workers is a fiction, that leaves us free to start asking some interesting questions. If there is no hidden hand, then who has decided that IT specialists should be paid less than pop stars? Oh, and the need for elections plainly implies that for politicians there are more qualified candidates than jobs, so it seems inevitable that they should all be paid less. What do you think?

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** Martin Brampton is a director and founder of Black Sheep Research (www.black-sheep-research.co.uk ), an independent consultancy providing research, writing and speaking services on a wide range of business and technology subjects. Martin was previously a director at Bloor Research, and has worked with IT as a user and analyst for over 20 years. He is a frequent contributor to silicon.com's Behind the Headlines TV programme and can be contacted at silicon@black-sheep-research.co.uk .