Consultancies still snapping up IT staff despite the downturn

While newspaper headlines may be filled with job losses and company closures, it looks like IT staff working in consultancies don't have to worry about job security.

While newspaper headlines may be filled with job losses and company closures, it looks like IT staff working in consultancies don't have to worry about job security. These days, it seems, there are few IT projects in the pipeline that aren't critical to future business success, and there is no fat to trim when it comes to companies' spending on consultancy services.

Mike Garlick, managing director of recruitment firm MBA, says consultancies are still recruiting IT staff despite the downturn. "It's maybe down 5% or 10% on last year," he says.

"While there's less work in the banking sector, there's more demand for consultants with experience of utilities, health, government, pharmaceuticals and telcos."

This is in stark contrast to the last economic slowdown at the start of the decade.

"The last downturn after Y2K and the dotcom bubble was much bigger and more dramatic for IT," Garlick points out.

"While things will get a bit tighter, consultancies and systems integrators can still make a profit and see their business through the slowdown."

Justin Gaydon, chief operating officer at consultancy expw: consulting, confirms this trend. Founded six years ago, expw now employs around 50 staff and focuses on CRM and billing for the telco and media sectors.

"We did see some impact in September when the initial reaction from one of our largest clients was to rein in their budgets, including some of the projects we were working on," he admits.

"However, after about a month, it became clear the client couldn't take its foot off the gas on key projects. We ended up carrying on with the project plans much as before."

As a result, growth at expw has been solid in 2008, while Gaydon expects to increase turnover and headcount by a quarter in 2009, with a particular requirement for business analysts, project delivery managers and consultants with experience in in telco and media clients.

"We see ourselves being able to sustain our current consulting resource levels with our existing clients and markets," Gaydon explains.

"But we're not sitting on our laurels. Over the last four months, we've been looking at new products, such as software as a service, using staff who are currently 'on the bench' to put together solution prototypes that can be used as collateral during the sales process."

It's the same story at consultancy 2e2, which employs around 1,000 staff supplying a broad range of IT services, from communications and data management to security and end-to-end provision of managed services. The company continued to see revenues grow in 2008 despite the economic slowdown.

"Business has been reasonable and we're going into 2009 optimistic but realistic," says Martin Healiss, group HR director at 2e2. However, like expw, 2e2 has seen the source of its revenues shift, moving away from a previous strong focus on financial services and media to picking up more work in the public sector, healthcare and defence.

As a result, 2e2 is currently recruiting vertical industry expertise in these new sectors, as well as looking for staff with experience in security, especially risk and compliance in unified communications as local government provides more rich media content to citizens and in technologies such as Microsoft Sharepoint and Active Directory experts disaster recovery data management and virtualisation. Healiss is also always on the lookout for good project managers. "No one can afford overruns or failure to deliver," he points out.

In fact, despite the economic slowdown, there are likely to be some key areas where consultancies will struggle to recruit the skills they need. Garlick warns, for instance, that there are too few junior and mid-level consultants with two to five years' experience to meet demand.

"Employers haven't done much training of new people in recent years, so there's a gap there," he says.

Colin Minto, managing director of Recruiting Technology Solutions at Brainhunter, which runs a number of online job boards, including JobboardIT, adds that there is also a severe shortage of people with Web 2.0 experience in a business context, with just 2% of the candidates registered on JobboardIT listing Web 2.0 among their skills.

Skills shortages are being compounded, Garlick adds, by the fact that European IT professionals are returning to their home countries as the strength of the Euro makes working in the UK much less attractive. For the same reasons, MBA is now placing more UK nationals in contract roles in Europe than previously. The net effect can be seen in the positions advertised on JobboardIT, says Minto, where salaries and contract rates for consultant roles are holding up well overall.

However, despite these skills shortages, consultancies are still being extremely choosy about who they employ. The emphasis now, says Healiss, is on "headcount growth in the right areas. Unlike the old days, when consultancies hired people and then looked for business to come in, we're now more circumspect about who we take on."

Consultancy is certainly not a refuge for anyone seeking shelter from the chill winds of the recession. Gaydon warns that "career contractors" in particular are unlikely to receive a warm welcome from consultancies, even if they do have the right technical expertise.

"We're looking for permanent members of staff who've had a number of years at a big consultancy firm, and who are good all-rounders able to demonstrate they can adapt and fulfil different roles," he explains.

Consultants, too, need to become more choosy when deciding which job offers to accept, Minto says.

"You need to ask more searching questions about the stability of the consultancy and its client base," he advises. "It only needs one big client to fall into difficulties to create ramifications for the consultancy itself and its own viability."

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