Ireland's technology sector is still expanding rapidly. However, companies are finding harder to find staff and fewer firms than last year intend to hire new employees in the months ahead, a survey shows. The annual Technology Salaries and Benefits Survey, carried out by Computer Staff Recruitment (CSR), also shows remuneration in the sector growing at far beyond the rate of inflation.

Some 72.5 per cent of companies across the technology sector intend to increase their workforce this year. However, while this is evidence of the continuing rapid expansion in the sector, it represents a drop on last year's figure of 80 per cent.

The survey also provide evidence that the skills shortage in the sector is also growing, with 81 per cent of companies - against 70 per cent last year - saying they were having difficulties finding staff.

In addition, there are signs that free competition in the marketplace has extended to the individuals working in the computer sector as well as their companies. Staff turnover is running at an average of 16 per cent, and salaries have risen by between 12 and 15 per cent.

The shortage of skills is particularly acute in the area of software development, according to the survey. Almost every single software company - 97 per cent - plans to expand its workforce in the year ahead, but more than 93 per cent of these are experiencing difficulty recruiting. Staff turnover rates in the software development area are running at around 12 per cent.

IT departments continue to show a downward trend in recruitment, with 51 per cent of companies saying they plan to hire more staff compared with 66 per cent last year. IT departments now outsource on average 41 per cent of their business.

The industry as a whole remains predominantly male, at 68 per cent, the survey says.

Ms Elizabeth Nelligan, CSR's managing director, said that outside of the survey result, there were other alarming factors that could have an impact on the industry.

"Ireland is still hugely reliant on US technology companies, and if you look at what is happening at the moment, you can see so many share prices going through the floor," Ms Nelligan said.

"I believe some of these multinationals may start headcount freezes, and that would be very worrying," she added.

CSR said it sent the survey questionnaire to 1,000 small, medium and large companies throughout Ireland, and elicited a response rate of 16 per cent.