IT jobs freefall slows in Q2

Amid the worst UK recession since the computer was invented, the decline in the job market is continuing, but slowing

The recession maintained its pressure on the IT jobs market in the second quarter. The number of full time jobs on offer is less than half what it was a year ago, while the number of contract positions advertised fell by nearly two-thirds, according to the Survey of Appointments Data and Trends compiled by Jobadswatch for Salary Services Ltd (SSL).

The good news is that the rate of decline is falling. There were only 10% fewer permanent jobs advertised than in the first quarter of this year, and 18% less contract positions. Both markets are still providing more opportunities than they were in 2003, at the nadir of the last market downturn.

So things are not as bad as they might be considering that the decline in GDP (gross domestic product) over the past year is the highest ever recorded, which means this recession has been the worst in the UK since the computer was invented.

And it may be that we have reached the low point of this downturn now. According to Harvey Nash Group Marketing Director Paul Smith, "The permanent jobs market won't decline very much more: it will hold at this level for the rest of this year".

When will it recover?

So the focus is no longer on how far the market will go down: the question now is when significant recovery starts to get under way. Here all the analysts and commentators are agreed that it will be sometime in the future.

The IMF (International Monetary Fund), for example, believes that the recession in the UK has ended but is forecasting negligible growth (just 0.2%) in GDP in 2010.

So for IT professionals the recommended strategy is to sit tight. Paul Smith's advice is "keep the job you've got unless it is at very serious risk; be flexible to retain it; and adopt personal due diligence on any job offer you may receive".

Regionally, the London area suffered the most damage during the second quarter, with permanent jobs down 61% on a year ago, compared to a 50% fall for the rest of the country.

The capital now accounts for less than a third of the total market, compared to more than 40% before the recession.

The Midlands and the West were the best places to be job hunting in the second quarter, though even in these regions the fall over the three months was 46%.

In the contract market, there was much less regional variation. The area where jobs held up best was the North West (down 50%), but the area with the biggest decline was next door, with North East jobs falling 68%.

Financial companies are continuing to suffer badly from the effects of the credit crunch, with permanent jobs down two-thirds on a year ago.

Most other industry sectors are down by around a half, though government is still bucking the trend: jobs here were down 39%.

Public sector

The contract market again shows less variation: here public sector jobs are down 60%, while all the other non-IT industry sectors reduced advertising by a little more, around two-thirds.

In the software industry, which is the biggest sector, jobs were down 57%, while electronics and comms companies reduced contract advertising least of all, by just under a half.

Salaries on offer for full time posts continued to decline, at least for junior staff who saw an annual fall of 0.6% over the quarter (this compares with a decline in the headline inflation rate of 1.6% in June).

For senior positions advertised, however, remuneration actually rose compared to a year ago, by 0.7%.

The same differentiation appears in the contract market, where there were significant falls in rates over the second quarter, with junior staff being offered on average 4.5% less than a year ago and senior staff 3.3% less.

Harvey Nash's Paul Smith says of the variation, "with good people, companies are having to pay significant sums to pull them out from the secure positions they have got. At the bottom end, there is pressure to reduce rates.

"People are trying to retain their contractors while cutting their rates."

There were some interesting changes in the league table of skills most in demand during the second quarter, with two newcomers in the top 20 and another in the top 25.

The latter is Flash, which makes its bow in the IT skills most in demand table (opposite) at number 22. This Adobe product, originally developed by Macromedia as an animation tool, has steadily evolved into a complete website development package, and as it has done so it has slowly gained in popularity.

No Flash in the pan

It has been in the table for eight years now, starting in the bottom reaches of the top 100, and reaching the top 50 at the beginning of 2006. It remained in the 40s until a year ago, when it leapt to 33rd, and has continued climbing since then.

In 20th place is CRM (customer relationship management) after a sudden leap of seven places up the table this quarter.

It has consistently featured in the table just outside the top 25 for many years, and its elevation this time is due to a more dramatic decline in demand for other skills than for CRM itself (it featured in 21% less advertisements than a year ago).

Just above CRM in the table is the other newcomer, Ajax, one of just two skills in the upper reaches of the table that is in greater demand than a year ago (the other is PHP).

Demand for Ajax together with Javascript/Jscript has been booming for several quarters (Javascript entered the top 10 for the first time in the last quarter and has stayed in ninth place this time).

Decline of Java

Yet interest in Java itself has been steadily declining over the same period (it is currently seventh, having been as high as third as recently as the first quarter of last year), and so has demand for J2EE (now in its lowest position since it first appeared in the table in 2005).

The migration away from Java is real, says Harvey Nash's Paul Smith. "The trend in development is towards .Net. The economy is playing to Microsoft's strengths, as the cost of ownership is so much lower".

So the apparently contradictory surge in demand for Javascript and Ajax, "perhaps means we are beginning to see a shortage of skills in those areas".

Demand exceeding supply is certainly the explanation for the continuing rise up the table of PHP, according to Smith: "There are hardly any PHP people around".

So here is a skill that anybody looking to make themselves recession-proof might look at acquiring. PHP has moved up the table for eight consecutive quarters now, and is currently in 14th place.

The table makes good reading for Microsoft in most respects.

One piece of bad news for the Redmond giant, however, is that Vista has fallen out of the top 50 after just one quarter in it: it is down to 60th this time.

The new operating system is still failing to win converts in the corporate market.

About the survey

This article is based on information from the Computer Weekly Quarterly Survey of Appointments Data and Trends, compiled by Jobadswatch for Salary Services Ltd.

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.

The survey provides further analysis 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 £495, which is the same price as an annual subscription. The annual subscription covers four issues, and includes access to the SSL/Jobadswatch system, an online salary survey which provides all the information available in the hard copy survey, plus a powerful recruitment search system, allowing selection of combinations of region, industry and software skills for a specified job type.

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