Digital Economy to Drive Confidence in Hiring

Appeared in: The Australian
Author: Jennifer Foreshaw
Date: February 2012

THE technology recruitment market may have cooled late last year but many technology chiefs and hiring experts have confidence in the year ahead.

If fears of a European debt crisis ease, the technology jobs market should strengthen.

IT has a much more important role in innovation and helping companies respond to changes in the market place, recruiters say.

Last year, retailers saw customers migrate to the internet to buy online, prompting aggressive investment in internet platforms.

This year, companies will continue to invest in upgrading IT as it is considered a core enabler for creating new platforms to support innovation and drive growth.

All the skills driving the web-based environment will be in demand while virtualisation, software-as-a-service and cloud computing emerge as a greater force.

“Vendors like IBM, Fujitsu, Telstra and Microsoft have made major investments in cloud computing,” Peoplebank chief executive officer Peter Acheson says.

“I think you will see cloud computing and the whole ASP (application service provider) model become a lot more prevalent.

“That will also drive resourcing.”

With IT underpinning better decision-making, there will be big investments in data analytics and business intelligence.

“With the pace of change and the way in which industry is transforming by disruptive forces, companies are going to want to invest more in IT for business analytics and business intelligence,” Mr Acheson says.

Alcami director Jane Bianchini says there is an unprecedented push into business intelligence.

“We have seen a lot of strong need for that type of skill set in that business intelligence, data mining, data migration and data cleansing space,” she says.

“The IT position is to … move from automating what the business needs to do and doing it better, faster and cheaper, and moving that into automating what the business needs to know.”

She says with consumers more conscious of protecting their online data, organisations must react, making data protection and data privacy important this year.

There will continue to be shortages in the technology areas in most demand, including SAP, J2EE, Java developers, business analysts and project managers.

“What I am seeing is all the tech vendors, the outsourcing companies and some smaller software-as-a-service-style companies with cloud-based offerings all hiring sales people,” Ms Bianchini says.

“That’s a good lead indicator. When more products and services are sold, naturally there is a flow-on effect with increased demand for technology skills.”

Peoplebank, the country’s largest IT&T recruiter, expects some concerns early in the year because of fears about the European debt crisis.

“Companies will be a little cautious about their hiring,” Mr Acheson says.

“My suspicion is the market will bounce back in February/March and will be more contracting-driven; then people will start to hire permanent people once the European issues are dealt with and underlying business demand strengthens.”

Australian Curriculum, Assessment and Reporting Authority chief information officer Keith Roscarel expects little movement in staffing, which will err towards permanent hires.

“We haven’t seen any emerging skill sets that have changed in the last 12 months,” he says. “Probably the only one would be more around strategic sourcing becoming more prevalent than ever, especially now we are getting a good and healthy shift with cloud and the like.”

The emergence of fixed-term hiring is a growing trend. Recruiters say this avoids high contracting rates and the risk of hiring someone and potentially having to either offshore the job, redirect the work to a different division or scrap the role.

Taylor Coulter director Penny Coulter says fixed-term contracts appeal to an employer because they avoid paying contract rates. “There will be permanent roles, but if confidence is low then there will be more contracting available, but still low levels overall as a sense of fragility remains and people feel insecure.”

With programs of work under way from last year, Coulter says, large recruitment drives will fall, with organisations hiring to “plug the gaps” in skills required at different lifecycle stages.

“Most of these organisations are either doing their own recruitment or outsourcing large pieces of IT work to service providers and sending work offshore,” Coulter says.

“Recruitment will be stronger with service providers than the end-user community.”

It will be a “patchy” hiring year for South Australian government chief information officer Andrew Mills. “We will continue to fill vacancies, but I don’t see any major change and, if anything, it will be a tighter hiring for us,” he says. “With some of the big programs there will be work around those areas, but mainly short-term - it will be contractors.”

The skills in demand for the SA government will be in program-project management.

“Data and business analysts are heading more towards the evidence-based decision-making area, and an area that we have been working on is skilling up and getting more dedicated information security people,” Mills says.

Executive search specialist Russell Reynolds Associates sees a greater proportion of contract roles rather than fulltime vacancies at the most senior level.

“What you will see lower down in the market is the wholesale lay-off of contracting staff just because you see less project work going on,” Russell Reynolds executive director Nick Fletcher says. “What you are also seeing is long-term trends in technology starting to have real impact.”

Fletcher, who runs the technology practice for Australia and New Zealand, points to the commoditisation of a lot of technology functions.

“I think for infrastructure management that has happened a long time ago,” he says. “I think that is happening now on the management of applications, and you are seeing a lot of those skills going to the outsource vendors and a lot of those jobs are going offshore.”

Fletcher says firms are avoiding managing technology on a country-by-country basis.

“So, practically, what that means is IT leadership is centred in large hubs often not in Australia. So into places like Singapore, Hong Kong and Shanghai, even into India or The Philippines, but you are seeing the leadership being stripped out of some of those businesses in Australia.”

Fletcher expects more of a return to balance between supply and demand, with less willingness to offer incentives such as sign-on bonuses.

Salaries are forecast to be fairly flat apart from skills in high demand, which are predicted to rise between 10 and 25 per cent.

Candle executive general manager Linda Trevor says the last quarter of the financial year should be quite good for many businesses.

“Most of the projects that we are expecting to happen will happen and then it should ramp up from there,” she says.

The four major banks, which have been subdued in their hiring since late last year, are expected to be back in the market, along with the insurance and wealth management sectors.

The strongest sectors will be resources, utilities and telecommunications, with the activity around the NBN and government, particularly federal.

Recruiters predict professional services and IT consulting to be busy. The tightest IT skill markets will be in Perth and Canberra, with most other markets facing tightening.

Department of Immigration and Citizenship chief information officer Tony Kwan says that Canberra’s highly competitive market has led the department to set up a Brisbane team to ease the talent shortage.

“We still have quite a large contractor workforce and are aware of the requirements to convert contractors,” he says.

“It is proving to be more difficult than what we envisaged, just because of the market situation in Canberra.”

The 40-strong Brisbane team will do Java development projects.

Kwan says DIAC will continue to need skills in Java, WebSphere, SharePoint and SAP.

“We would expect the two-tier economy to continue this year in terms of Perth and Brisbane representing stronger job flow and market opportunity through the mining sector,” says Robert Half Technology associate director Jon Chapman.

“Rather than massive-ticket projects, what we tend to be talking to our clients about is large project portfolios of multiple small- to medium-sized projects, including but not limited to enhanced reporting and satisfying mobile or cloud kind of opportunities.”

Chapman says the mobilisation of the workforce and customers will continue to pose technological demands.

“The speed at which companies and IT managers and CIOs will have to react will need to be that much quicker.”