Contractors struggle in tight job market

George Freeman is taking an extended break in the far north this month. Freeman -- not his real name -- is one of many IT contractors feeling the pinch of a tight jobs market that has seen some hourly rates halved.

George Freeman is taking an extended break in the far north this month.

Freeman -- not his real name -- is one of many IT contractors feeling the pinch of a tight jobs market that has seen some hourly rates halved.

Auckland-based recruitment firm Enterprise reports project management and Java programmer rates dropping to as low as $80 an hour from highs of $120, while IT Maniacs director Laurel Gillan says she has clients who would take short-term jobs for $60 an hour.

Freeman says there are so few contracts available it’s difficult to say what the hourly rates are.

"One project management job advertised in The Dominion was offering $40 to 45 an hour when you would have expected $80 to 90 an hour before,” he says.

Freeman, a Wellingtonian who has been in the industry over 20 years and claims “relatively current” skills in program analysis, database administration, team leading and project management, declines to be identified in case it damages his prospects.

He says the government is anecdotally the worst payer. The Department of Courts, he says, appears to pay database administration staff about $60,000, compared with $70,000 plus benefits at Datacom. Another government department reportedly pays team leaders $45,000, when the BNZ pays its $65,000 to $100,000. “A friend there is on $90,000,” says Freeman.

“There is this downward pressure on lots of people. There are other contractors working from last year on old rates and keeping very quiet. There is just not the work coming out of the big companies."

While Freeman is having an extended family holiday in Northland, he says some of his friends are retiring, others are “taking what [work] they can. Things are tight and there is no end in sight.”

None of his contemporaries are heading overseas, he says, as they are already there -- in Australia, Belgium, Germany, Switzerland and the UK.

“They have no intention of coming back. We are talking senior people. There isn’t the range of jobs here for them. People came back [in the last year or so], had a look and took off again,” he says.

Freeman has worked in the US but doubts he could get a green card now, not having the latest Java skills.

He claims an influx of Asian immigrants doing IT degrees is also depressing the value of the market.

“They will work for peanuts. It’s a bit of a pain for some of the locals. Where you have an employer, say a district health board, they are strapped for cash, they will go to the lowest dollar,” he says.

However, Freeman warns against organisations forcing wages down too low.

“If there is an upturn in the market, and you are treating people like stacks of furniture, there will be a rush out of the door. It will happen all again and that will be a shame. I see a lot of that happening,” he says.

One employer, while admitting he is using fewer contractors, says his firm has not cut pay rates.

“We pay market rate," says gen-i chief Garth Biggs. "We are not cutting the prices we pay."

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