New Zealand's tech sector grew 12 per cent last year and is not expected to slow down soon. That's putting upward pressure on the job market and on wages.
Recruitment firm Talent puts the growth down to "digital transformation". Bianca Jones, its Wellington-based country manager, says government and large private sector organisations are shedding outdated processes and legacy technology.
"The key issue for a lot of those organisations is having enough people to be able to get in and overhaul what needs to be done. There is demand for new kinds of developers and Agile project managers, says Jones.
Inland Revenue's billion-dollar rewrite of tax software and the Education Ministry moving schools to cloud computing are examples of projects.
The project nature of the work is reflected in the number of people hired as contractors or as salaried positions being about even.
"Permanent rates are increasing but it's not just dollars people are looking for," says Jones.
"They are looking for that work-life balance and they are looking for the ability to work from home. A lot of businesses are becoming much more flexible in the way they approach people and with the offers they make.
"Many are offering something out of the norm, such as four-day working weeks where staff get to do 40 hours over four days. They seem to have good staff retention. It's a big drawcard, especially for those with young families."
Jones says the hourly rate for contractors has increased dramatically over the past three years across most skill sets.
Talent's most recent salary survey found the most in-demand skills across Australia and New Zealand were developers, cybersecurity experts, business analysts and data scientists.
The rate for a chief information officer or chief technology officer in Auckland or Wellington is now between $180,000 and $300,000 a year, and people will charge $150 to $200 an hour to fill those positions on contract.
Information security skills can attract rates of $120 to $140 an hour for the top jobs and $80 to $100 an hour for security analysts. Business intelligence analysts will pull down a similar amount, and a good application, cloud or infrastructure architect can expect up to $140 an hour.
Service desk staff get $30 to $40 an hour and applications and desktop positions are priced out at $45 to $55 an hour.
"It's a good time to be working in IT, and because there is a lack of quality IT people in New Zealand we have people who are not necessarily at intermediate or senior level getting paid what a senior would have been paid a couple of years ago," Jones says. "We have young people a couple of years out of uni getting $80 to $100 an hour."
Wellington is seen as a more affordable place to live and do business, so it has attracted strong growth in start-ups over the past five years, leading to high demand for some digital skill sets such as UX (user experience) and UI (user interface) designers.
Auckland has also enjoyed strong growth over the past six months, and there has been a noticeable increase in organisations looking for soft skills, especially advanced communication skills, mentoring and collaboration.
"So candidates who are excellent in communicating, candidates who are client facing, people with that confidence to present to people, because that is not the traditional IT skill set," Jones says.
That makes candidates from the UK and US attractive.
"They tend to have soft skills because they have worked in large-scale environments where there is the opportunity to do that," says Jones.
"They are often in senior consulting or sales roles, which are the roles that win business for organisations."
The tendency of IT businesses to cluster in hubs like BizDojo or the BNZ Business Hub encouragesthe development of people skills — and anti-people skills. The World Economic Forum's Future of Jobs Report 2018 predicts a rapid shift over the next three to four years from humans performing many work tasks to machines and algorithms doing them.
Setting aside the estimated 75 million jobs worldwide that may be displaced by automation over the next three years, and the 133 million new roles that may emerge as organisations adapt to the new division of labour between humans and machines, someone has to write that new software.
Kara Smith, Talent's Auckland manager, says the skills shortage means organisations may need to take a longer-term look, building a more varied team where some of those at a senior level can share the management load and mentor people coming through.
She sees a lot of effort put into winning senior staff from other companies, moving around a small pool of people and exacerbating skills shortages.
"Sometimes it feels like dominos, and we come back to the question, how is the next generation of talent to be developed?"