Increased demand for skilled IT professionals is putting them in a stronger bargaining position with employers compared to the recent downturn years – but some IT bosses warn that offshore outsourcing will prevent the wage spikes of the dot-com boom.

A host of surveys over the past week have highlighted recruitment and retention problems faced by UK businesses because of the shortage of certain IT skills in the labour market.

We asked the CIO Jury user panel if this has put their IT workers in a stronger bargaining position over wages and benefits. Ten said ‘yes’ and just two said ‘no’.

But some of the IT bosses warned that the consequence of a sharp wage spike in the UK IT staffing market as a result of this would be an increased move towards outsourcing and offshore outsourcing.

JP Rangaswami, global CIO at investment bank Dresdner Kleinwort Wasserstein, said: “Demand will be met by the appropriate use of outsourcing and offshoring. Rollercoaster wage spirals will not be allowed to return. The downturn was not a blip but a maturing of the sector.”

Dharmesh Mistry, CTO at Edge IPK, agreed that employees are in a stronger bargaining position but also added a similar note of caution.

“If prices escalate too much there will be more exodus of development to offshore. I am not down on