Public Sector, Banks Squeeze IT Wages

Appeared in: AFR
Author: Brian Corrigan
Date: June 2012

A lack of demand from government departments and the financial services sector has flattened out technology salaries, according to a new report.

The slowdown has been especially brutal in the ACT and Queensland, with hiring down as much as 40 per cent and 20 per cent respectively.

Perth bucked the trend amid continued demand from the resources sector, while web developer skills are also in hot demand as retailers and other traditional organisations look to move operations online.

Those are the key findings of a quarterly jobs report produced by Peoplebank, Australia’s largest supplier of information and communications technology contractors.

Peoplebank chief executive Peter Acheson said this had given employers the whip hand in salary negotiations.

“In a strong growth year we would expect salary increases across the board of 4 to 5 per cent, with some roles attracting increases of 10 or 12 per cent,” he said. “We’re not seeing anything like that and salaries have remained flat.”

Major projects at BHP Billiton, Origin Energy and elsewhere in the resources and utilities sectors meant demand for SAP skills was high. Mr Acheson said demand for IT skills was also strong in the health sector and had been resilient in telecommunications.

Normally the two largest markets for technology roles, Mr Acheson said Sydney and Melbourne had been negatively affected by a slowdown in demand from the big four banks.

Commonwealth Bank of Australia was hiring nowhere near as many technology staff as its billion-dollar core banking overhaul neared completion, while there had been similarly weak demand from ANZ, National Australia Bank and Westpac. This had been offset in both NSW and Victoria by a rise in state government hiring.

There is likely to be bad news for technology staff in Queensland this week, with IT jobs expected to figure prominently in cost-cutting plans that could result in up to 40,000 public sector jobs being axed. The state has a forecast debt of $85 billion by 2014-15.

“In the short term they will look for quick wins, which will include tech staff and contractors,” Mr Acheson said.

For senior project managers, business analysts and technology executives salaries had remained fairly flat.