Almost half of north west tech and digital businesses have had to increase wages above typical levels in order to remain competitive, according to research from independent trade association, Manchester Digital.

The annual Digital Skills Audit, which analyses data from over 250 companies in the region, revealed that 47 percent of companies had to inflate employee wages by an average of 10 percent for technical industry roles. Such salary premiums have been widespread across the industry in recent years, as demand continues to outstrip supply for skilled talent.

Developer roles in particular saw a 16 percent pay rise; the highest level of inflation for the fifth year running. The figures are reflective of the fact that 49 percent businesses are finding developer roles the hardest to fill. Digital marketing wages, meanwhile, increased by 11 percent, business developers by nine percent and IT roles by eight percent. These inflation rates remain common throughout the sector and the result of companies’ attempts to attract and retain the limited talent available during the ongoing skills shortage crisis.

Salary demand remains one of the main challenges facing businesses in terms of talent retention, with the ability to offer and support progression, and the growing threat of competitors poaching staff, also vital considerations for organisations across the region. The audit also looked at which skillsets will grow in importance to businesses. Whilst developers – perhaps unsurprisingly – came top of the list, the results also highlighted an increasing demand for experts in Artificial Intelligence and machine learning. One in six (12 percent) businesses stated that they are most in need of experts in this burgeoning field.

Katie Gallagher, managing director at Manchester Digital, said: “The North West is clearly a competitive and exciting place to do business, with growing numbers of companies choosing to establish themselves here. “However, tech firms need skilled talent in order to succeed. It is therefore worrying that the results of our annual audit once again highlight a serious skills shortage that is affecting businesses across the region – and that so many are having to inflate wages in an attempt to rectify the issue. For many growing organisations, the financial drain this creates is unsustainable and may lead to larger problems in future.

“The solution to the skills shortage is not simple, so everybody must play their part. Education providers, policy makers and businesses themselves must join together to help plug critical skills gaps – many of which are getting wider every day.”