Canberra IT&T Market Update: February 2010

The first half of 2010 is expected to see the challenging conditions of 2009 continue in the ACT market. We are however expecting some pick-up in the second half of the year as new projects come on line and Finance starts to release some of the investment funds which have been acquired as a result of Gershon savings.

While there has been some strong hiring activity in the past quarter, we are seeing this drop off substantially.

We believe that the full impact of the Gershon Review will be felt this year as Agencies attempt to achieve the desired levels of compliance with regard to ICT savings in BAU and contractor reductions.

The push to convert contractors to Permanent APS staff has been strong with a number of Agencies undertaking bulk recruitment rounds with growing success in the number of placements achieved.

The reduction of spending in the ICT contractor market is seeing more activity move into the IT Consulting space, so there will be increased demand for permanent ICT staff by the big Systems Integrators/Outsourcers.

Predicted In Demand Skills

- Java
- SAP
- SharePoint
- Unix
- Storage/Warehousing

Predicted Growth Sectors

The Gershon Review continues to have a big impact on the market, particularly as Agencies move to full compliance by the end of the next financial year.  This will continue to affect downward pressure on rates and create limited new opportunities.

The Department of Defence has gone to market with a number of large RFT’s but the likely outcome of these is still well off – so hiring intentions are expected to be relatively flat across the market in general.

Some general increased confidence in the market has led to a number of the large Systems Integrators/Outsourcers taking advantage of the downturn, hiring ICT staff on a permanent basis at more reasonable salaries than what was experienced in 2007 and 2008, although specialists are still commanding high salaries.

Contract Rate Predictions

Overall, contractor rates are currently holding steady, we don’t expect much change in this over the next 12 months.

The exception is selected specialist skills (Java, Unix, SAP and SharePoint) where we expect to see growth of a further 10 – 20% depending on demand.

Permanent Salary Predictions

Permanent demand is strong, however given that rates are typically determined by the APS salary scale limitations, we don’t expect to see a lot of movement in permanent salaries this year.

Like contractors, the exception continues to be specialist skills, where increases are expected in 2010.

Tips for contractors

Whilst the IT contracting market in Canberra has suffered as a result of the Gershon Review, there is still steady demand for skilled contractors.

We expect that following the completion of the Gershon Review there will be substantial pent-up demand across Government and this will mean increased competition where there is limited supply.

The limited talent pool has been exacerbated by the number of skilled resources moving back to Melbourne and Sydney to avoid the impact of Gershon over the past 18 months.