IT recruitment market turning candidate-rich

The skills crisis of recent years has been reversed, recruiters say

While there are still certain areas in which demand for skilled, experienced IT staff is as high as ever, the overall hiring situation is markedly different from that of six to 12 months ago, when candiates across the board were difficult to find.

Brendon Carian, director of accounting, finance and ICT at recruitment firm Hudson, says skill-sets in which there are more candidates than before include project managers, business analysts and test analysts.

“People are available due to fewer new projects being scoped and defined and in turn implemented and tested.

“The line-by-line reviews that the public sector has recently gone through will likely impact on all aspects of the marketplace, as this will then confirm what new projects are required and fuel the requirements within the vendor space.

“We are seeing candidates within these skill sets retraining or taking sideways and sometimes backward steps, in order to break into different and more demand-driven roles within ICT.

“We are also seeing career contractors deciding to take up permanent opportunities in order to gain more security, often at lower salary levels”.

The impact on contractors is significant, he says.

“The classic ICT skill shortages that we have experienced over the past few years have in the short term come to a temporary end, while in the contract space we are experiencing more candidates than roles.

“This has led to a high level of experienced candidates not being able to secure contract roles and we are starting to see professional contractors enquire about fixed-term and permanent roles.

“For employers, there has not been a better time to tap into this talent pool to attract high-end, strong experienced individuals at reduced rates — contract rates in some skill-sets have reduced up to 30% in the past six months.

“New contract roles that are coming to market have tended to be for a shorter time-scale, typically three months, and companies have started to push back on the inflated rates that have been enjoyed over the past three years.

“The ICT contract market is traditionally fuelled by new projects and the lack of public and private-funded projects has led to this reduced contracting opportunity.”

However, it’s not all doom and gloom — some areas are still seeing high demand, Carian says.

“There are still the ‘niche’ ICT technical shortages in skill sets such as experienced enterprise architects, and web development skills such as PHP and Flex, and there is still a shortage of experienced strategic test management skills in the market,” he says.

Robert Half New Zealand IT division manager Steve McGowan says it’s not so much a question of which IT skills are in demand and which aren’t, but rather it’s a matter of which industries are employing IT staff and which ones aren’t.

“Health and infrastructure are doing well – they’re hiring people in IT across the spectrum, from engineers to project managers and developers,” McGowan says.

In the energy sector, particularly gas, “there’s a lot of hiring going on”.

The contracting and consulting space is seeing a downturn, he says.

“Consultants and contractors are finding it harder – some I know have been let go because clients have put projects on hold.

“There are contractors on the market, looking for permanent work.”

Contracting and consulting firms are suffering, he says, because clients are “looking at doing things internally”.

A case in point is ERP skills. While ERP projects continue to take place, in the health, infrastructure and energy sectors, “some companies have put upgrades on hold”.

However, “if you have good ERP skills, you should be able to find work”.

McGowan is noticing areas such as project management and IT operations are attracting more and more candidates.

“They’re getting 50 to 60 applicants – there has been an influx of people.”

A year ago, he says, candidates would “have a couple of offers on the go, but now, you’ll have a number of candidates for that job – the situation has reversed itself”.

While “good people are still getting good money”, candidates are becoming “more realistic” about salaries.

“I’m seeing some people who have been earning high salaries in specialised roles, but are unable to find work in that area. They are going back to what they were doing three or four years ago and taking a pay cut.”

Georgia Wright, a director of recruitment firm Neal Andrews and Associates, says Java and .Net development skills remain “very much in demand”, as does expertise in storage and virtualisation.

On the other hand, project managers, business analysts and testers aren’t as highly-sought after, Wright says.

While there’s definitely been a slowdown in IT hiring, it’s “difficult to put a label on the market”, she says.

“Salaries and hourly rates are going down – the market has swung from being candidate-tight and candidates being in charge, to clients being in charge.”

However, “when it comes to pricing, if you have a candidate someone really wants, they’ll pay for them”.

An example is a placement the firm did recently in which there were two candidates with similar skills shortlisted for a position.

One of the candidates wanted $10,000 more in pay and despite that requirement the client chose him, because of his background, Wright says.

She adds this type of situation “doesn’t happen every day”.

For really in-demand candidates, firms will break a hiring freeze, she says.

“They’ll create a position.”

Contractors seeking fulltime roles are a feature of the current recruitment market, she says.

“We’re hearing ‘I want a permanent job’ a lot from contractors.

“However, clients will look twice at a contractor who has decided to go permanent, because when the market turns, they’ll go contracting again.”

Andy Mardell, director of Auckland recruitment firm MTR, says the firm’s regular salary survey has shown a five to 10% decrease “across the board”, for the October-January period compared to the June-September one.

“The only exception is high-end development skills,” Mardell says.

Salaries have been declining for the past six months, but the decrease is particularly noticeable over the past four, he says.

A stark example of the decline is one instance where an IT management job that was paying $120,000 in October, is now being sought by the employer to be filled for $80,000 to $90,000, he says.

MTR is having to expand and adjust its offerings in line with clients’ requirements in tougher times, he says.

“We’re tackling things differently, breaking down our service into smaller pieces – for some clients, we’re going through CVs for them and the client is doing the interview.”

There is also an increasing amount of work helping clients through the redundancy process, such as assisting redundant staff on CV preparation and job searching, “which isn’t something we’ve done in the past”, he says.

He also says tertiary institutes and training providers are seeing greater interest in IT courses, as candidates seek to upskill in a tougher employment market.

The speed of the turnaround from the buoyant conditions of last year has surprised him.

“I’ve been in IT for 23 years and I’ve never seen it turn around so quickly, from being job-rich in October to candidate-rich now.

“No one could have predicted it.”

Ian McCrae, chief executive of health software maker Orion Systems and a major employer of software developers, says with development roles, “we’re gradually noticing more people are available”.

For the past couple of years, “the market has been extremely tight, and any good person would have offers from several companies”, McCrae says.

Now, he says, “there are increasing numbers of people available, but the market isn’t awash”. The recruitment process for a developer has shortened slightly, he says, “but there’s still a process to go through.”

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