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The IT pay premium

Computer skills are as highly valued as ever in the labour market, but only have a really significant impact on pay where the employee also possesses influencing skills, a paper in the summer edition of the National Institute of Economic and Social Research’s (NIESR) journal (subscription required) suggests.

By 2006, three in every four jobs entailed the use of computers and half of UK employees described computers as “essential” to their job. It has long been noted that people with computer skills earn more than those without them: raw calculations show that in 2006, computer users earned on average 63% more than non-computer users.

But much of the computer pay premium is associated with educational levels rather than computer skills as such. As to the impact of computer skills in isolation on pay – not a simple factor to isolate - estimates vary from zero impact to what this study describes as an “implausibly large” impact.

While one German study argued that as big a pay differential is associated with the use of pencils as with computers, a number of UK studies have found computer pay premiums varying from 7% to 37%.

The NEISR concludes that having computer skills has a significant impact on pay, but that much of this effect is also tied up with the possession of what are described as “influencing skills” – those which involve persuading, teaching, training or generally influencing others.

The researchers note that in the early years of computer use, the impact of having computer skills on pay was more directly related to technical skills and not tied up with influencing skills – which is a more recent phenomenon.

It makes sense that after a decade of rapid investment, development and expansion in IT, computer skills would become particularly valued and rewarded where they are matched by the interpersonal skills to manage, evaluate and effectively deploy new technology – in other words, you are far more likely to reap the rewards of having top-notch computer skills if you also have the human touch.

Sarah Welfare | |

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