The UK's Internet-centric businesses are paying more to keep staff, or they risk losing them to traditional firms, according to a new survey.
As stock options have collapsed into free-fall dot coms, and other risky firms are having to raise salaries, according to human resources giant Hay Management Consultants.
Basic salaries in e-business are set to rise by 9.7 percent on the next review, compared with 3.6 percent for the broader industry and service market, said Hay. Basic wages for e-business rose about 7.2 percent for the year to July 2000, according to Hay's statistics.
Chief executives and department heads can expect even more jam as firms seek to keep their key talent and fend off an exodus to orthodox companies. Hay expects the increase to be 13.6 percent at the next review for the chief executives.
Iain Smith, a consultant at Hay, said: "Stock is no longer enough on its own. Employees realise that stock options might not materialise into a gain and they need a more immediate reward. They are acting as investment analysts of their own firms."
One company having to raise its salaries is Dell. Brian McBride, vice president of Dell UK and Ireland, said, "We're having to pay more in terms of basic wages, whereas before, people were looking more at their stock options. Now we say to people, 'we expect to grow solidly, so if you're here for three to five years, you should do well.'"
According to Hay, the demand for e-business skills is changing, with an increased demand for integrators with a blend of new and traditional abilities.
"If your Internet skills are only programming skills, you would still be worth more than a C++ programmer, but the real premiums will go to people who can put all the systems together, from the back end through the transaction system to the front end and Web enabling," Smith said. "Often, dot com firms are looking for people who have worked in large businesses and have classic team and project management skills."
Internet-centric firms are still paying substantially higher average sums than traditional businesses, but salary increases will not go on indefinitely. "The big unknown is the demand for e-people going forward," said Smith.
"There are so many who have experienced working in that environment, and know basic Internet technologies, yet many big firms plan major e-business projects so that could prolong demand."