As jobs disappear around the nation, IT professionals in Canberra should be quietly confident that their Government will still need them.
That's the message from market outlooks issued by IT recruitment agencies Peoplebank and Link Recruitment last week.
Peoplebank's IT&T Salary Index for December 08-February 09 found that contractor rates and salaries for permanent positions fell for many job descriptions in all capital cities as the global financial crisis crushed economic activity.
''Where a year ago we would have had one or two appropriately skilled candidates for a contract role, today we would have four,'' said Peoplebank's chief operating officer, Peter Acheson.
''However, despite the short-term outlook, there are a number of major projects on the horizon that we anticipate will boost demand for contractors later in 2009.''
Link Recruitment's review of the IT job market found that while outsourcing and off-shoring have dampened some local segments, foreign-owned companies have also invested heavily in research facilities or local practices in Australia.
''This has created competition for top talent and provided a strong stimulus to the local employment market which is expected to continue in 2009,'' the review said.
Link said emerging demand for highly integrated enterprise solutions, growth in ''green tech'' solutions in response to the proposed emissions trading scheme, rising corporate demand for gaming and social networking technologies, the need for virtualisation solutions, and expected implementation of the National Broadband Network would underpin demand.
''While a short-term decline in demand for IT skills is anticipated as a result of economic conditions, a quick return to skills shortages is expected once conditions stabilise,'' Link said.
''It is predicted that national ICT skills shortages will grow by 29 per cent by the year 2010 to just over 14,000 jobs, based on current policy settings in relation to education and skilled migration.''
Peoplebank found that contractor rates had fallen in Canberra by 5-10 per cent as agencies worked through the Gershon review's recommendation that ICT contractor numbers be halved over five years.
Acheson said this followed a period of skills shortages which saw Canberra offering the nation's most attractive pay rates.
''Eighteen months ago, if you were an IT contractor in Australia, you would probably have got the best rates in Canberra,'' he said.
''It was a very overheated market, with a couple of large departments doing large IT projects and strong competition for IT resources, which drove up rates.''
The change of government in 2007 triggered a decline in the Government's IT spend through 2008 as agencies waited for the Gershon review process to unwind.
Acheson said some agencies were asking contractors to accept small cuts to their hourly rates when they renewed agreements.
''We are also starting to have some contractors saying to us that their priority is to make sure their contract is extended,'' Acheson said.
''They are not looking for a rate increase, and while not happy about a rate reduction, they will accept a slight rate reduction.
''These are very different market dynamics than 18 months ago.''
He said the trend to hire permanent staff was not as strong as might have been expected, even though several agencies had mounted significant IT recruitment efforts this year. Immigration and Customs were offering about 60 permanent positions, Defence around 100, while Education, Employment and Workplace Relations were seeking around 100 permanent staff to fill new and former contract positions.
''This has created some angst amongst IT contractors and the Canberra IT community but I don't think we'll see agencies doing this on a widespread basis,'' he said. ''In a few months time it will settle down.''
This assessment is based on the fact that many government agencies have stalled investments in major IT platforms and will implement those plans over the next 12 months.
''It wouldn't take much of a pick-up in Federal Government IT expenditure before we would be starting to see skill shortages in the market again. It's on a fine balance,'' he said.
The Gershon review found there were 3135 IT contractors working for government agencies in 07-08, accounting for 23 per cent of their total IT workforce. It recommended this number be halved but Acheson believes that contracting some IT staff will remain a significant part of agency strategies.
''IT contracting will continue to be an important part of the overall mix because it is the perfect vehicle for managing the peaks and troughs of IT projects,'' he said.
''Gershon's intent was not to eliminate contractors but to optimise the workforce with a big focus on skills development and IT career strategies. Some of that very positive intention in the Gershon review is getting lost.''
www.peoplebank.com.au
www.linkrecruitment.com.au
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