Employers will face shortages of IT professionals with
enterprise resource planning skills over the next 12 months,
putting pressure on IT directors to raise pay rates, a recruitment
specialist has predicted this week.
Demand for IT professionals with SAP, Oracle Finance and Siebel is
growing rapidly, driven by a wave of technology upgrades by leading
firms, public sector projects and financial compliance regulation,
said Parity Resourcing Solutions.
The upturn in activity is likely to push contract rates for ERP
specialists up by 15% by the end of the year and create new
recruitment difficulties for IT departments, said Parity.
"There are a lot of new programmes going on, such as the national
programme for IT in the NHS, the merger between the Inland Revenue
and Customs, and Basel 2. In addition, there is another cycle of
technical replacement coming around - five years on from Y2K," said
managing director Joe Kelly.
IT departments will come under increasing pressure to offer longer
contracts to freelance IT staff and to renew contracts more quickly
than they have in the past if they want to retain key staff.
"Now the market is much tighter, candidates are not waiting for
renewals. Employers that are not quick off the mark will find they
are potentially losing people. Before you could wait until a week
or two before the contract ends to renew. Now you need to be
thinking at least six weeks ahead," said Kelly.
Over the past year the proportion of contractors turning down
renewals because they had a better offer elsewhere has risen from
33% to 40%, figures from Parity have revealed. During the same
period, employers have extended the average length of their
freelance contracts from 13 weeks to 16 weeks.
Demand for permanent staff is also rising, but at a more modest
rate than contractors. SQL, Unix, Microsoft Office, Cisco, and C++
are among the hottest skills, according to Parity. Java skills are
in particularly short supply, forcing some employers to turn to
India to find skilled programmers.
"The war for talent is back and firms have to compete in an
internal market to attract the right skills. They have to make sure
their organisations are a good place to work and that they have a
good work-life balance. They need to pay more," said Kelly.
Parity is advising employers to set up regional databases of
skilled IT professionals so they have a panel of people to recruit
from when vacancies arise.
There are often regional differences in the types of IT skills
available. For example, recruiting helpdesk staff in East Anglia is
relatively easy, but there are shortages of helpdesk staff in the
South West and North West.
Projects, mergers and legislation boost
spending
Strong financial results from IT recruitment specialist Spring
Group have provided further evidence of growing demand for IT
skills.
Since late 2001 demand for IT skills has fallen in the UK because
of the collapse of dotcom boom and the economic downturn. However,
in March Spring Group announced a 37% increase in revenues to
£476m. Operating profit also grew from £1.9m in 2003 to £9m last
year.
Richard Barfield, chief executive at Spring Group, said, "There is
no 'next big thing', but a range of themes are keeping the market
active. We are seeing demand across the board, but the things that
drive the market include a resurrection of projects that have been
on hold during the economic downturn.
"There is also greater activity in mergers and acquisitions which
creates IT projects to integrate systems. There are new IT products
and services to link companies with suppliers and customers. There
is a serious amount of money available for a new
business-to-consumer approach based on the internet. In the finance
sector, new bank accounts, insurance policies and credit card
accounts are created this way."
Because of the threat of viruses, worms and spyware, there was also
demand for IT security skills across all industry sectors, Barfield
said.
"Lastly, regulation is driving demand, particularly in the finance
sector. Projects to meet the requirements of the Basel 2 regulation
in Europe and Sarbanes-Oxley in the US are creating strong demand
for IT staff that understand banking processes and new
technologies."
Barfield said the skills most in demand were application projects
based around Windows .net and web servers. Also there were
migration projects to Windows XP and 2003 and demand for Unix and
storage area network skills, he said.
But Barfield does not expect the jobs market to crash in the same
manner as 2001-2002. "There were four things that contributed to
the demand in the last recruitment boom: Y2K, the internet, the
introduction of the euro and a range of new technologies. This
meant that in the late 1990s IT staff were in huge demand and rates
went through the roof. This time we will see a more gradual
increase, so I do not expect to see demand fall off a cliff the way
it did in the dotcom collapse and the following economic
downturn."