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Peoplebank Salary Index – March 2009

Posted March 9, 2009 by Peoplebank Australia

Peoplebank survey tracks the economic downturn’s impact on IT salaries

Peoplebank today releases its Quarterly IT&T Salary Index based on salaries offered to permanent and contractor ICT workers over the December 08 – Feb 09 period in Sydney, Melbourne, Adelaide, Brisbane, Canberra and Perth.

While Peoplebank observes that salaries have fallen for many of the 50+ job titles tracked, significant fluctuations in salaries for similar roles in different cities suggests that demand remains a factor in current pay scales.

The survey found that Sydney, which remains the most buoyant market, typically has the highest-paid roles. For instance, enterprises are paying around $350,000 senior CIO/IT Director, whereas similar roles in Perth and Brisbane attract a $200,000 base salary.

Other than the ‘Sydney premium’ – likely to be underpinned by strong demand for contract workers in the Government and financial services sectors – there is no national trend in pay scales.

The Quarterly Salary Index for each city records a range of salaries (junior, intermediate and senior) paid to permanent employees and many contract ICT workers in more than 50 job areas.

Peoplebank’s COO, Peter Acheson, comments that the downward pressure on salaries and contractor rates has been mounting over the past three months as the effects of the global financial crisis take hold.

“In the current market, there is sustained downward pressure on salaries, resulting from a reduced number of roles available and a concurrent rise in the number of candidates available. In fact, where a year ago we would have had one or two appropriately-skilled candidates for a contract role, today we would have four.

“Despite the short-term outlook, there are a number of major projects on the horizon that Peoplebank anticipates will boost demand for contractors later in 2009. Additionally, several of our enterprise clients – especially in Perth – are seeing the wealth of talent currently available as an opportunity to hire the skills that will equip them to explore new areas of competitive advantage.

“These are nascent trends, but they do point to the beginnings of a recovery in our sector in the medium to longer term,” Acheson adds.

In addition to the salaries listed in its Quarterly Salary Index for March 2009, Peoplebank observes that trends in key markets include:

Sydney:  has been buoyed by relatively strong continued demand for contractors, especially for Java/J2EE developers, technical solution architects, project managers and business analysts. Demand continues to be underpinned by a number of major projects in the NSW Government sector, and in the telecommunications sector. In the latter, there are a number projects running through to March 2009 requiring specific skills especially project co-ordinators, schedulers and project managers with telecommunications expertise.

Acheson comments that “Additionally, we have been briefed on several large projects that require SAP architects, project managers and functional consultants, storage engineers and Cisco Network Support.
Furthermore, as the major banks ramp up for core system upgrades, we are seeing an increase in demand for candidates with stronger business skill sets and experience in specific industry domains, such as retail banking.

“In all, NSW remains the shining light in the ICT sector.”

Melbourne: with a number of strong ICT candidates on the market at the moment, Victoria has slated its pent-up demand for ICT skills, and is rapidly becoming a ‘buyers market’ for enterprises. Peoplebank is noticing a distinct change in the hiring process: in that employers are taking longer to confirm new hires, and many have in place an additional level of approval for all new hires, in light of their own policies to reduce risk. The bright spot in Melbourne’s ICT sector is strong demand for wintel and storage engineers.

Acheson comments that “With supply of ICT workers now slightly ahead of demand, we are anticipating that there will be decreases in net salaries or rates over the coming 12 months.”

Perth: in stark contrast to recent years, where employers have paid a premium for skills so that projects could proceed, there is now a surplus of skilled ICT workers, which is placing downward pressure on both salaries and contractor rates. Peoplebank estimates that the salaries currently being offered for ICT roles are about 5 percent lower than those of 12 months ago.

Despite these falls, Acheson observes that there is a strong foundation for ICT skills in the Perth market.

“Peoplebank’s Government and enterprise clients alike are seeing the wealth of talent now available to them as an opportunity to take on more skills, or backfill roles that had remained open. While they are not rushing to make new hires, we believe that little by little, many Perth-based organisations will be skilling up in order to explore new areas of commercial advantage,” he says.

Adelaide: SA’s capital also remains a relatively buoyant market, with increased demand for professionals in several areas, including IT support staff and SAP professionals with FICO, SD/MDD and ABAP development skills.

Defying the national trend, Peoplebank observes that salaries have actually increased by around 10 percent for junior ERP staff, especially those with SAP and Oracle Financials functional skills, PeopleSoft functional and technical skills, SAP Basis Administrators and SAP functional skills.

Canberra: in the nation’s capital, Government spending has been constrained by budget considerations as well as the impact of the Gershon report. In particular, Peoplebank has demand for contractors (who represent as much as 60 percent of the Government’s ICT skills base) reduce while Government agencies work through their response to the Gershon Report’s recommendation that ICT contractor budgets be halved over five years.  These downward pressures have seen contractor rates fall by around 5-10 percent across the board.

However, Acheson is confident that as Government agencies firm their response, demand will strengthen, especially for Web 2.0 skills.

“Gershon’s clear intention was to optimize – not eliminate – Canberra’s use of contractors. Indeed, it is evident that many of the projects our Canberra clients have on board are ideally suited to contract workers. So in the medium term, I expect the Canberra market will strengthen,” he says.

Brisbane: In Brisbane, ICT recruitment has suffered the twin blows of a contracted market and the impact of the forthcoming State election.

“The impact of the election, in particular, is that Government sector defers ICT projects, especially those that depend on short term, contractor personnel. This hiatus typically extends for six to eight weeks after the election – so while conditions will be tight for the short term, we may well see some upturn in May,” adds Acheson.

Peoplebank is making its Quarterly Salary Index for each city available at www.peoplebank.com.au , as a guide for its enterprise clients and as a measure intended to help ICT workers navigate the market’s short term difficulties.

Acheson comments, “Peoplebank intends that the Quarterly Salary Index provides people with some hard facts about trends in their market. In addition to this, our teams in each city have been working hard to develop strategies for navigating the current fluctuations – which we are making available to both enterprises and candidates.

“At the end of the day, we are advising our customers that once the market has weathered its short-term difficulties, there are good reasons to be confident of a stronger future – and we’re investing in working with our enterprise clients and candidates alike, to ensure a smoother passage there,” he concludes.

Posted March 9, 2009 by Peoplebank Australia