IT sector leads nationwide rebound in hiring intentions

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Latest Hudson survey shows optimism, but mainly in Wellington and the South Island

By David Watson | Auckland | Tuesday, 17 November, 2009

IT has once again topped recruitment firm Hudson’s list of industry sectors when it comes to hiring intentions.

Hudson’s latest Employment Expectations Report shows that of 19 industry sectors, IT had the highest positive net effect for the October-December period, at 25 percent.

The “net effect” is calculated by taking the percentage of employers surveyed that expect to decrease staffing levels during the survey period, and subtracting the percentage who don’t intend to hire staff.

The result is in line with most previous Employment Expectations surveys Hudson has done in the past few years. The survey, originally done every six months, is now conducted every quarter.

However, while the overall 25 percent positive net effect is an 8.7 percentage point increase on the previous survey, it is concentrated mainly in the lower North Island and South Island, with the upper North Island seeing a slip in sentiment since the previous survey.

For the upper North Island, there was a 13.2 percentage point drop, with a net 3.3 percent result recorded.

Hudson’s commentary accompanying the survey notes: “in the IT sector, employer confidence has fallen back into negative territory after a strong rise last quarter took sentiment well into the positive.

“Down 13.2 percentage points, a net 3.3 percent of employers are now reporting an intention to reduce their permanent staff levels over the coming three months.

“There was a general sense last quarter that there would be an increase in investment in technology. However, the anticipated investment seems to have been more prevalent in the public sector, particularly in the lower North Island.

“As a result, the majority of employers are holding off from hiring until actual investment picks up.”

Hudson’s commentary on the lower North Island situation picks up on that theme, noting, “Employer sentiment in the IT industry has built on last quarter’s small rise, with a strong 16.9 percentage point increase in confidence, [resulting in] a net 33.9 percent of employers now planning to increase their permanent staff levels over the coming three months.

“Government organisations are investing in large Enterprise Resource Planning systems such as SAP, generating increased demand for IT services for vendors.

“Employers are anticipating demand in the market will put more pressure on the skills shortage and so are more prepared to recruit when they see good candidates.”

In the South Island, “the IT industry has reported a 7.1 percentage point rise in employer sentiment, building on the increase last quarter, with a net 42.1 percent of employers reporting an intention to increase their permanent staff levels over the coming three months.

“Employers remain continually on the lookout for difficult to find skill sets, with the skills shortage expected to remain for the foreseeable future.”

Those figures relate to permanent staff; for contractors and temporary staff, there was a net 8.35 positive net effect, up 13 percentage points from last year.

Demand for contractors was especially noticeable in Wellington.

Nationwide, telecommunications – which is treated as a separate industry sector to IT – was relatively buoyant, with an 11 percent net positive effect, which was slightly down on the previous survey, at 0.7 percentage points lower.

Overall, across all sectors, employer hiring intentions were up slightly on the previous survey, with a 10.7 percent net positive effect recorded, up 10.2 percentage points from the previous survey.