IT Procurement: Purchasing Managers Concerned About Wage Inflation
Wage increases could lead to sharp price rises for IT services in the coming months, according to Information Services Group.
Market research and consulting firm Information Services Group (ISG) asked 88 top IT purchasing executives how current macroeconomic pressures are affecting their procurement decisions. Two out of three managers said: Wage inflation is currently their biggest concern.
In the technology sector, salaries and fees have risen sharply over the past 12 months, particularly in India. Cloud engineers, full-stack developers and cybersecurity architects have seen the strongest increases.
ISG observes that wage increases can lead to sharp price increases for IT services. This is currently particularly the case for project-based work, where prices have already increased by 15 percent in some cases, it said. In the case of managed services contracts, however, no increases in unit cost rates have been observed so far – not even in view of the recent wage pressure.
