The IT industry slashed its recruitment drastically during the first quarter of 2001, according to the SSP/Computer Weekly Quarterly Survey of Appointments Data and Trends. Jobs offered by IT companies fell to below 11,000 for the first time since SSP started monitoring industry sectors in 1994, and software houses cut their recruitment requirement to below 7,300 jobs - it has never before dipped below 8,000.
These figures reverse a trend that has been running since the end of 1997. During this time IT industry recruitment advertising expressed as a proportion of the whole rose steadily from 42% to 60% of the total. In 1997, out of every five jobs offered two were in the IT industry: for most of last year it was three out of five.
The decline in 2001 shows the anxiety felt by the industry following a sustained stream of poor financial results, profit warnings and job cuts from many of the major industry players, including Compaq, Cisco, Dell, Hewlett-Packard and Intel. IBM and Microsoft were the exceptions, but even these two giants were pessimistic about the prospects for future growth.
Add to that some precipitous falls in the high-tech share indexes, and the lack of growth in the US and Japanese economies, and it is easy to see why caution has become the watchword.
Computer vendors account for a relatively small share, between 2% and 3%, of all jobs throughout this period. Other sectors have dominated the market over the past three years. The larger software houses accounted for just over one third (35%) of jobs at the end of 1997, rising to a peak of 43%. At the height of the recruitment boom driven by the Y2K compliance projects, software houses were advertising more than 25,000 jobs per quarter, more than the entire market does today.
Communications companies showed the biggest growth during the late 1990s, rising from 5% of all jobs advertised in the fourth quarter of 1997 to 16% last time. At the end of 1997 communications companies were the fourth biggest industry sector, well behind finance (15%) and slightly behind retail (also 5%). Now communications is the second largest sector, with twice the advertising of the finance sector and three times that of retail.
The decline in advertising by these companies had a significant effect on the jobs demand. Software houses advertised 800 fewer jobs than at the end of 2000, and 6,500 less than in the first quarter of 2000. Communications jobs trimmed recruitment by 400 and 200 jobs in the same periods.
Overall, the jobs on offer during the first quarter totalled just under 20,000, 40% down on the first quarter last year. The rate of decline was much the same as the 42%, which prevailed throughout 2000. The figure was below 20,000 for the first time since the beginning of 1994.
At that time, of course, there was no Internet advertising. And it is still not possible to calculate the effect Web-based advertising is having on these trends as no reliable metrics have yet been developed to allow meaningful comparison between Internet ads and printed ads.
An Internet ad differs from a newspaper ad in that it appears on a Web site for an indefinite period of time, whereas a printed ad is published in one issue of a newspaper, or at least a finite number of issues. Charging differs.
One effect that is measurable is that the amount of advertising placed directly in newspapers by companies doing the recruiting has increased relative to the amount placed by intermediary recruitment agencies. Two years ago IT site advertising accounted for well under half (43%) of all advertising: in the last three months it accounted for nearly three quarters (72%).
So it is safe to say that it is agencies that are exploiting the new advertising medium most enthusiastically. Users are, on the whole, still waiting to be convinced.
One consequence is that the space devoted to detailing the attractions and requirements of each post is larger. The volume of advertising space paid for in newspapers fell by less than a quarter (24%), much less than the decline in the number of jobs (40%). Relative to the first quarter of 1994, the number of pages in 2001 was 32% higher, the number of jobs just 4% higher.
Among users the public sector stands out this time round, with advertising actually rising, up 12% compared to a year ago. The 1,160 jobs on offer is the largest number since the third quarter of 1998, and is proportionately the highest since SSP started monitoring industry sectors, at fractionally under 6% of all jobs.
The manufacturing sector also showed a small recovery, with three more jobs on offer than a year ago, and 60 more than in the final quarter of 2000. In surprising contrast, engineering is still in poor shape, down two-thirds from a year ago and with barely 200 jobs on offer in total.
Other trends that emerge from this issue of the SSP survey follow established lines. The communications and networking industry is where the action is: despite the slight drop in recruitment this sector still accounts for 15% of all jobs. As a result, networking posts saw the smallest decline, just 10%. The 2,100 networking posts on offer accounted for 11% of all jobs.
Those looking for development positions were much less well served, with jobs in all categories falling by nearly a half relative to this time last year. There were 2,100 analyst's posts (down 43%), 1,000 programming jobs (down 48%), 5,200 general developer jobs (down 49%) and 640 database jobs (again down 49%).
Jobs for operators fell below 100 for the first time, while systems programmers had just 70 jobs on offer. It will not be long before these two categories disappear altogether. Systems programmers would do well to reposition themselves as technical analysts or system architects. This job category was one of the few to show a rise over the quarter, from 600 jobs a year ago to 650.
The average salary on offer rose 3.7%, a percentage point or so more than at this time last year. This is significantly above the headline inflation rate (2.7%) but well below the average earnings inflation rate (4.5%).
Here also networking specialists generally fared best. The salaries on offer to technicians rose on average by 5%, while the 450 network sales support posts on offer were advertised at salaries 11% higher than a year ago.
The major surprise in the latest issue of the SSP/Computer Weekly Survey of Appointments Data and Trends is that demand for Internet-related skills has fallen for the first time. Demand for generic Internet expertise fell 16% relative to the same period last year, a big change from the last quarter when it more than doubled.
Interest in Java was down 29%, while the number of ads specifying HTML was down by more than half - more than for any other top 25 skill except desktop Windows and Cobol. This is partly because of a shift in interest towards XML, which saw easily the biggest growth, featuring in nearly treble the number of ads.
XML is now up to 11th, just one place behind HTML and 20 places higher than a year ago, when it entered the table for the first time. In the software houses league table XML has moved above HTML, featuring in more than 100 more ads during the quarter.
Interest in the mobile computing language Wap has declined, and it has fallen out of the top 25. This skill has paradoxically found its way into the software house top 25 this time, but has only 93 jobs on offer over the quarter, out of 217 in the market as a whole.
The number of specialist Web development positions was also well down on a year ago, from more than 600 to fewer than 350. That is a fall of 44%, slightly greater than the average of 40% across all job positions.
C++ has moved above Java in the skills league table to reclaim the number one position it last held two quarters ago. The requirement for C++ actually fell by more than that for Java over the quarter, but it started at a much higher level. C++ has moved back above Java in the software house sector, which is the biggest recruiter, and is higher in five of the other sector league tables. Only in finance and retail did Java remain more popular over the past three months.
Only four of the top 25 skills featured in more ads than at this time a year ago. Corba appeared in 500 ads this time, 70 more than a year ago. It has risen 10 places to 17th. Solaris - Sun's Unix variant - continued its recent upward trend to rise 13 places up the table to 19th.
In contrast, Unix itself and AIX both fell 46%, Unix dropping three places to sixth. These skills are tabulated separately because advertisers sometimes specify a particular brand of Unix, especially in the case of Solaris. This does not mean that the real total for Unix is the sum of Unix, Solaris and AIX, because many ads specify two or all three of these, and in those cases they are added into the totals for each skill.
Linux appears in the league table for the first time this quarter. It has entered in 33rd place, featuring in just over 150 ads, 40 more than AIX but 300 less than Solaris.
Despite demand nearly halving, Unix remains the most popular operating system, featuring just above Windows NT in the table. It is also the only skill to feature in the top 10 of all the individual industry sector league tables.
Unix and Windows NT are not the only dominant software skills of the late 1990s to show a decline greater than the market average - the same is true of Oracle and SAP within the top 25, and of Office just outside it. Demand for a number of other recently popular skills fell by two-thirds or more, including Access (down 67%), Lotus Notes (71%), Novell (73%), Progress (75%) and Sybase (71%).
The other top 25 skill to show growth relative to the first quarter of 2000 is Ada, which is enjoying the greatest popularity it has ever known. It featured in 530 ads this time, placing it 15th.
None of the Ada requirement came from the public sector. Software houses accounted for well over a third of the Ada opportunities, while one in 10 of these jobs was offered by a computer supplier - in this sector league table Ada lies third, behind only C and C++.
Among other industries, Ada is most in demand in the engineering sector, which again accounts for one in 10 of the jobs on offer. Here also Ada is in third place, behind C and C++ again. Engineering companies are also keen on Pascal and account for fully a half of all demand for this language.
There was a small resurgence in demand for mainframe skills relative to the end of 2000. Cobol, for example, has re-entered the top 25. The legacy third-generation language featured in 150 jobs more than in the previous three months, though it remains well down on a year ago. The same is true of another mainframe skill, DB2, which has also re-entered the top 25.
Three industry sectors - finance, retail and engineering - accounted for the bulk of the demand for Cobol. Software houses, in contrast, have reduced their demand, and it has fallen out of this sector league table this quarter.
About half of the demand for DB2 comes from the same three industry sectors, with most of the rest coming from software houses. The engineering sector is the one where the resurgence can clearly be seen: it advertised 35 Cobol jobs this time, compared to just one a year ago, and 33 DB2 jobs - a year ago it required none.
The SSP survey methodology in a nutshell
This article is based on information contained in The SSP/Computer Weekly Quarterly Survey of Appointments Data and Trends.
The Survey analyses advertisements for computer professionals in the trade press and the quality national daily and Sunday newspapers. It is primarily intended for recruitment agencies and IT managers with a substantial recruitment requirement.
The posts advertised are broken down in the survey into 63 job categories. Within each job category the survey provides details of the number of posts advertised and the average and median national salaries offered for the last quarter and for each of the previous four.
The survey provides further analyses within each job category by hardware type, industry type and region. It also provides a breakdown for the major job categories of the technical skills most in demand. In each analysis, it again details the average salary on offer for each of the past five quarters.
The price of a single issue of the survey is £165, and an annual subscription costs £295. This covers four issues, and includes a free copy of a Windows-based software product which allows selection of combinations of region, industry and software skills for a specified job type.
For further information contact Bernardine Caine on 01488 72705, or e-mail [email protected]