HR salaries in both the private and public sectors will be fiercely competitive in 2008 with the 'war for talent' showing no signs of easing, according to a salary survey by recruitment agency FSS.

The survey showed that senior HR professionals can now command salaries of up to, and in some cases in excess of £140,000 a year.

It found that HR directors in the private sector are earning an average of £100,000 in the capital and £80,000 in the outskirts. However, the public sector is beginning to catch up, for instance the average salary of HR Business Partners in private sector companies across the London and Thames Valley areas is £45,000 - the same as in the public sector.

The survey highlights the importance of building a strong employer brand and offering an attractive work-life balance to employees, as these aspects have been shown to play a vital role in the career choices of HR professionals. It also revealed that the biggest HR challenge for companies in both the London and Thames Valley areas is improving performance and leadership management.

The survey shows that with the growing internationalisation of business, a second language combined with the knowledge of employee practices and legislation from different countries are in increasingly high demand. It also highlighted the problem of many entry-level HR candidates with a CIPD or masters qualification but no practical experience.

Jo Davies, associate director of FSS HR, says: "These candidates are often regarded by employers as over-qualified for HR assistant/administration roles, yet insufficiently experienced for HR advisory roles.

"Aside from traditional graduate schemes, employers may need to consider how best these individuals could add value," she adds.