ICT workers, skills in demand in bullish market

Appeared In: ITWire
By: Peter Dinham
Date: Tuesday 17 th November 2009

Australia’s now going through a period of sustained, increased demand for skilled ICT professionals and according to the largest ICT industry recruiter, Peoplebank, the Sydney, Melbourne and Perth markets, in particular, are experiencing a strong lift in demand for IT workers.

In its quarterly IT & T salary index for the period ending October, released today, Peoplebank found that there has been a consistent rise in demand for ICT contractors and permanent staff in key markets - notably Sydney, Perth and Melbourne - although it also reveals that salaries have remained largely unchanged from the previous quarter.

Peoplebank CEO, Peter Acheson, said this morning that the company is currently filling more than 300 roles per month – some two-thirds of its activity levels in an ‘average’ year – which, he said, contrasts sharply with conditions in the first quarter of 2009, where, on the back of hiring freezes and project deferments implemented at many government and enterprise organisations, “reduced demand was evident in downward pressure that saw salary and rate reductions in many states.”

Acheson characterises the current situation as “cautious optimism”, as the continuing ‘green shoots’ in the economy see business gear up for a new growth period.

According to Acheson, the current rise in demand for IT workers is attributable to three separate factors – “strengthened business confidence, the decision by many enterprises to proceed with core systems upgrades, and the opportunity to hire skilled staff.

“On the back of renewed business confidence – which is believed to have returned to the strongest levels since 2002, many of Peoplebank’s clients are now proceeding with core systems upgrades. These new projects are underpinning strong demand for Web 2.0 skills, especially in the banking sector, as well as for roles such as for business analysts and project managers, associated with project commencements.

“On top of this, many enterprises have taken advantage of the opportunity to bolster their IT teams with skilled professionals who can help them build the new capabilities that will translate into new sources of competitive advantage.”

Additionally, Acheson says, “given that the best performing companies in the next 10 years will be those with the strongest, most innovative and business-focused teams, many companies have been taking advantage of the downturn – which resulted in more talented candidates being available – to hire the star performers who will transform their teams.”
However, on the talent pool, Acheson observes that the availability of talented candidates is already starting to reduce, and he says that “just a few months ago, each candidate would get one job offer, at best,” adding that Peoplebank is already observing that many candidates are able to “choose between two job offers,” and he predicts that as this trend continues, the consequences will include “upward pressure on salaries and conditions.”

Acheson says that, with new ICT projects requiring an additional 36,000 ICT workers by 2012, it is most likely that the Australian IT sector will return to a situation of skills shortages, and he predicts that on current trends, the shortage is likely to be evident as early as mid-next year, but most certainly by the end of 2010.

He also suggests that, with this in mind, employers are “well-advised to consider their talent needs for the medium to longer term, and act now to secure the skills they’ll need for the years ahead.”

According to the Peoplebank survey, while most salaries remained static for permanent employees and many contract ICT workers in more than 50 job areas, there are emerging trends in individual markets, like New South Wales, where the recruiter found that demand for both permanent and contract ICT staff has continued to strengthen over the past three months, and is particularly evident in the permanent sector (which has continued increasing month-on-month) and in the financial services industry.

Peoplebank says that in NSW, projects in the banking and finance sector are underpinning this demand, and in addition to the core banking systems upgrades by the Big Four banks, the firm says there are a number of projects coming on-line to “further progress the integration of acquisitions in the sector.”

“The nature of these projects means there is particular demand for ICT contractors and project-related staff – such as project managers, solutions architects and business analysts with an ongoing demand for test analysts and test managers. There has also been a lift in demand for Organisational Change specialists, reflecting the need to re-engineer internal processes following acquisitions.”

“Additionally, the IT services sector has remained fairly buoyant with a number of projects underway requiring integration/transition skills. There has been particular demand for project managers, project coordinators, business analysts and ITIL service managers.”
Meanwhile, in Victoria, Peoplebank has found that, over the past three months, demand for ICT staff has continued to improve in Melbourne, and that the general tenor is of “cautious optimism as large businesses, especially in the financial services sector, re-engage with projects that had been shelved during the downturn.”

Also in Victoria, the survey reveals that demand has grown in the quarter or (sic) both contract and permanent staff, and in total, the number of permanent roles available in the state, through Peoplebank, is around 30 percent higher than in the first quarter of 2009 while the number of contract roles is approximately 20 percent higher than experienced in the first quarter.

According to Peoplebank, at the same time there has been a significant reduction in the supply of ICT candidates in Victoria, and the pool of active jobseekers (either permanent or contract) coming onto the market each month has shrunk by around 75 percent in the past three months, compared with the first half of 2009.

Peter Acheson says that, while some contractors have clearly taken refuge in permanent roles as a buffer against the downturn, Peoplebank believes that the key driver for low supply in Victoria is managers taking care to “lock in their ‘A’ teams and high performers, resulting in fewer qualified ICT professionals actively seeking new roles.”