This brought to an end a five year period of slow but steady expansion since the last downturn ended in 2003, and has ushered in what will undoubtedly be a difficult time for many. "We are in for, at a minimum, a tough 12 months," says Paul Smith, marketing director at Harvey Nash Group.
Being realistic should not mean becoming despondent, though. The damage is not as bad as might have been expected from the raft of gloomy statistics emerging from the economy as a whole, with record repossessions (up 50%) in the housing market and steadily increasing unemployment (up by the largest amount in 17 years during the quarter) accompanying what has been described as the biggest economic crisis since the Great Slump of 1929.
There are still plenty of jobs available for people with the skill set the market is looking for. According to Smith, this does not mean .net and PHP.
"The message for anybody looking for a job is - get commercial. Stop being a pure techie, and start understanding business," he says.
Some organisations are still investing for the future. Demand for graduate developers rose by more than a third compared to a year ago, and with the number of computer science graduates emerging from the universities in decline, those that do should find that there are jobs waiting for them.
IT jobs advertised on the web during the third quarter fell by 9% relative to the second quarter, and by 7% relative to the same period last year, according to the cwjobs.co.uk Survey of Appointments Data and Trends compiled by Salary Services Ltd (SSL). But they still stand at nearly four times the level of the low point reached in 2003.
In the contract market, the decline has been steeper. Jobs on offer in the third quarter were down 13% on the second quarter and 25% on a year ago.
"Low-end contractors have been hit very hard" says Smith. But in this market there were still four times as many jobs on offer as in mid-2003.
In the regions
London has been worst hit, with jobs down by more than a quarter over a year ago. So have Scotland and Northern Ireland - this is perhaps an indication of the dominant effect HBOS and the Royal Bank of Scotland have on what is a very small market. When they catch a cold, everybody sneezes. In the rest of the UK, the picture is much brighter, with jobs actually up on a year ago, by an average of 8% across all regions. Again the west side of the country has fared a little better than the east.
This regional picture is to some extent influenced by the fortunes of particular industry sectors. Financial institutions advertised for a quarter less staff than a year ago the retail sector also showed a double digit decline and the public sector was well down too. All of these sectors are concentrated in London and the south.
Manufacturing, on the other hand, takes place mainly in the midlands and the north, and jobs advertised by this sector rose 11% compared to a year ago, so these regions have not yet felt the effects of recession (the electronics sector, which is tabulated separately, has, in contrast, suffered very badly). Manufacturing should be further boosted by the substantial decline in the value of the pound against the dollar, which happened mainly in October after the quarter under review had ended.
The contract market shows a rather different picture. Finance sector advertising is down here by a whopping 41%, much more than any other sector. But the public sector increased advertising for freelances by a quarter, so government is clearly relying on a policy of employing mainly temporary staff for the duration of the period of uncertainty.
A big disincentive for any IT professional to move is the level of salary on offer. Average salaries for permanent staff are actually down on a year ago, by 0.7%, the first time this has happened since the SSL survey started 20 years ago. Salaries are down in 31 of the 55 job categories analysed. And this comes at a time when price inflation, as measured by the government's preferred consumer price index, is at a record level at 5.2% in September.
IT directors have bucked the trend here. Salaries on offer for these positions averaged more than £100,000 for only the second time, 4% up on a year ago. Systems analysts also saw salaries on offer rise typically by 5%.
In the contract market, things are a little better, with rates up on average 1.0% over a year ago. They did fall, though, in 13 of the 36 job categories analysed. Freelance developers are being particularly squeezed, with rates for senior developers down 9%, for mainstream staff down 4%, and for analyst/programmers down 3%.
Advertisers continue to look for managers, with these positions showing double-digit growth compared to a year ago. The only area where demand has remained more buoyant in the permanent staff market is in PC support, where jobs are up 18% over a year ago. The areas where decline was steepest were technical support, software engineering and networking: jobs fell by 15% to 20% in each case.
In the contract market demand fell for every type of job, including PC support. The biggest fall, by more than a third, was for development staff.
Skills in demand
The skills in demand among the positions that are on offer have not changed fundamentally indeed, the top 10 skills are exactly the same as in the second quarter, though there are a few changes from this time last year.
The emphasis is more on the quality of the job applicant than on the nature of the technical prowess acquired. According to Paul Smith, "What people want is a high level of skill, and they are not prepared to accept second best".
The most striking development in the league table is the continuing fall of Unix, where demand fell by more than a third, more than for any other top 25 skill apart from SAP. This has been a steady trend for two or three years now. Unix is now down to 12th, just one place above Linux, and the open source alternative will surely become the most popular Unix variant before long.
The top 25 skill increasing most in popularity is PHP, with the jobs on offer up by more than a half on a year ago. In contrast, demand for Microsoft's proprietary alternative, ASP, rose by just 2%. PHP now lies just outside the top 20, 14 places higher than in the third quarter of 2007.
About the survey
This article is based on information contained in cwjobs.co.uk Quarterly Survey of Appointments Data and Trends, compiled by Salary Services Limited (SSL).
The survey analyses advertisements for IT professionals on the Web and in the trade press and the quality national dailies and Sundays. It is primarily intended for recruitment agencies and CIOs with a substantial recruitment requirement.
The posts advertised are broken down in the survey into 55 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 quarters.
The survey provides further analyses within each job category by platform type, industry sector and regional location. 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 £250, and an annual subscription costs £350. This covers four issues, and includes a free copy of a Windows-based software product on CD which allows selection of combinations of region, industry and software skills for a specified job type.