IT contractors worse off in tough job market

A new survey to be released by the Australian Computer Society this week paints a sober portrait of the information and communications technology sector for contractors, reporting many independent IT workers are being forced to cut their hourly rates.

A new survey to be released by the Australian Computer Society (ACS) this week paints a sober portrait of the information and communications technology (ICT) sector for contractors, reporting many independent IT workers are being forced to cut their hourly rates to match tougher competition in an increasingly harsher industry.

According to the 2003 ACS Remuneration Survey, 24% of contractors and consultants responding to the survey were forced to decrease their rates between April 2002 and April 2003 in order to keep working. Some 46% say they kept their rates at the same level over the past 12 months, while the remainder say they increased their rates.

The combination of these rates resulted in a median rate increase of zero for these professionals, the ACS report states.

Contracting rates reported by respondents varied considerably, ranging from $A50 to $A100 per hour, depending on the work being undertaken, according to the report.

Two-thirds of those identifying themselves as contractors were working as consultants at an average rate of $A75 an hour, project managers at A$90 an hour while programmer/analysts attracted an average $A65 per hour.

It wasn't good news for salary-based ICT professionals either, with the report finding average ICT salaries had risen by 3.1% over the 12 months to 2003 -- short of the Australian Bureau of Statistic's (ABS) consumer price index (CPI) growth of 3.4% and significantly lower than its overall Average Weekly Earnings increase of 4.7%. The average growth rate recorded in the ACS' s previous survey (May 2001 to May 2002) was 4%.

Of those ICT professionals surveyed by the ACS, private sector IT employees experienced 3.1 growth in remuneration paid. Public sector employees were found to be the best off, matching CPI growth rates quoted by the ABS. Employees in the education sector fared worst, recording 2.3 per growth over the 12 months.

ACS national president Richard Hogg says the slackening growth rates represented a downward trend across the ICT sector, which began to surface 15 months ago.

"The average increase of 3.1% is the lowest recorded in the 11-year history of the ACS salary survey," he says.

"But it comes as no surprise given the current situation in the ICT sector.

"The results show that ICT professionals can no longer demand a premium for their knowledge and skills compared to other professions, that salaries are remaining static and that the tough times are affecting both employed staff and independent contractors."

The survey, which was conducted for the ACS by the Association of Professional Engineers, Scientists and Managers Australia, was based on responses from 1612 ACS contract and salaried members across Australia. Contractors and consultants represented about 35% of respondents.

On the positive side, Hogg says the ACS expects the ICT market to turn around in the next year, driven by the "gung-ho" attitude of the government towards growth in the economy.

But, Hogg warned, "rates will stay relatively low -- we won't go back to the late 90s and early 2000 rates when A$200 an hour was normal".

"Those days are gone, with the exception of niche markets, such as large-scale strategic planning, which requires very focused skills, and large consulting firms --not a one-man band," he says.

The survey also looked into the skills of respondents, finding nearly two-thirds of programmers and analysts possessed programming knowledge in at least five major applications. Of these, the most popular was SQL at 67%. Other widespread skills set included Cobol, CC+, Unix, Oracle, Visual Basic and Java.

ICT Levels of Income

Job Function Median/Total Package

General management: $A147,225

Sales & marketing: $A129,028

IT management: $A111,488

Consulting: $A109,000

Project management: $A103,968

Project management: $A103,968

Research & development: $A94,985

Database administrator: $A92,923

Systems management: $A90,470

Project leader: $A87,284

Research & teaching: $A74,597

Programmer/analyst: $74,597

Analysis & testing: $A73,488

LAN manager: $A70,850

Computer support: $A64,406

Teaching/training only: $A64,077

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