Salaries Stall While Hiring Falls in the ACT and Queensland

Appeared in: The Australian
Author: Jennifer Foreshew
Date: June 2012

TECHNOLOGY salaries have remained almost static and hiring has slowed in several states, with demand in the ACT falling by as much as 40 per cent on a year ago, a survey has found.

Queensland’s IT hiring levels have also fallen by 20 per cent since June last year.

The findings come from Australia’s largest ICT recruiter, Peoplebank, which launches its quarterly Salary Index for June 2012 today. “The fact that we are not talking about increases this year and that effectively salaries are pretty flat, and in some cases there are contractor rate reductions, tells you that the market for IT people right now is soft,” Peoplebank chief executive Peter Acheson said.

Queensland is facing job losses with the state government letting go of up to 40,000 contractors, which will include a significant number of IT contractors. The resources sector was expected to employ some of these contractors.

The report found Queensland and the ACT had even cut some contract rates.

The ACT market was being constrained by the federal government’s efficiency dividend and the expectation that departmental budgets next year would be cut.

One of the initiatives that some federal government departments were implementing to try to achieve their 4 per cent efficiency dividend was to extend contractors for a 12-month period, but on the basis of getting a 10 per cent reduction in the overall cost of the contractor, Mr Acheson said.

He said hiring was strong in Western Australia and employers were offering longer contracts to lock in contractors at 2011-12 rates. Demand was reasonable in parts of Queensland and the ACT, but it was flat elsewhere.

The NSW IT jobs market was steady, but the banks, traditionally the largest hirers, were no longer underpinning the market — the public sector was.

Victoria had few major enterprise projects under way to stimulate demand except for projects in the utilities sector, notably Australia Post’s innovation projects, the study found.

Despite the economic writedowns that underpinned the South Australian government’s 2012-13 budget, the public sector remained the state’s largest hirer.

Across the nation, demand has been strongest for project managers, business analysts and contractors with SharePoint and .NET skills.

SAP people and those in some of the emerging digital technologies such as Ruby on Rails developers and PHP developers continued to be able to demand salary increases, Mr Acheson said.

Ambition Technology managing director Andrew Cross said there was still caution around salaries due to the uncertain global economy.

“It is tough to get pay increases. It is tough to negotiate anything new into your package,” Mr Cross said. “There is just a real feeling of being under the pump, but not being able to influence your earning potential or your role at the moment.”

He said fixed-term contracts were being used to hire resources on pro-rata salaries rather than daily or hourly rates to reduce costs for employers.

Ambition Technology’s latest Market Trends Report Q2 2012 found the number of full-time IT positions fell and the average number of competitive candidates per role rose from six to eight.

It found the banking market had seen a rise in Q2 with demand across the project space.

“With the new financial year we expect demand to rise again as project pipelines have been set and budgets awarded across the banking world sector,” the report said.

It said recent redundancies in the telecommunications space had resulted in more active candidates in the marketplace and greater pressure on salaries and contractor rates.