IT jobs market reaches maturity

Lindsay Nicolle takes a balanced look at the complexities of the current UK IT recruitment market.

Lindsay Nicolle takes a balanced look at the complexities of the current UK IT recruitment market.

It's official. The bottom has fallen out of the IT recruitment market. It has dumped even skilled staff along with those without appropriate industry certifications and sector experience unceremoniously onto the floor.

Of the rest, the majority are resolving to tough it out with the same employer, while a small minority of employed permanent IT staff are choosing to face what could be an employment first for them: the challenge of devising their own aggressive marketing campaign to secure a new job.

Gone are the halcyon days when recruitment consultants could woo candidates with promises of many exciting projects and breathtaking salaries to match. Today, an average of 500 candidates apply for every IT vacancy, and only those who chase up their CVs religiously, practising their interpersonal skills with every recipient, stand a chance of getting an interview.

With job ads in magazines now filling just 10 pages on average when they used to fill more than 70, candidates need to devise a comprehensive sales strategy to make their CVs stand out from all the rest. Then they need to muster up some staying power to help them weather the inevitable rejections.

Blood bath?

The IT jobs scene in 2003 will definitely be challenging for some. But while unusually bloody for many on the parade ground, the state of IT recruitment in the UK today is really only one of a mature market finally finding its level against other industry sectors, argues Paul Smith, group marketing director for recruitment firm, Harvey Nash.

"I don't think we will ever return to the heady years of IT recruitment," he admits. "But I do think we will see market growth this year - but it will more closely match any growth in GDP [gross domestic product].

"This is partly because of the commoditisation of IT, and partly because the UK market is coming under intense pressure from offshore expertise, particularly in cost-effective project development in the Third World."

So the silly season is over. By reigning back their IT expenditure, employers are, in the main, dictating job terms and conditions, causing salaries to plateau and even fall in the case of advertised salaries for hardcore technical systems architects, and MIS/IT managers whose status was previously sacrosanct.

Recruitment firms are awash with unqualified candidates and staff made redundant by giant IT firms still trying to get a job, or change jobs, a year or more after registering. They also have on their books a fair number of folk wanting to change jobs because they are unhappy with their employer and the lack of staff development on offer, warns Carole Hepburn, director of recruitment agency, Computer People.

"The people suffering most from the difficult times are those who entered the market two to three years ago and who have not certified their skills," says Smith.

Still, if you have a qualification and/or good knowledge of a specific industry sector or legacy system, or a niche skill currently in demand, you are still at an advantage. This is because the priority within most IT departments today is to make the best of existing systems, maintaining them effectively and make them as responsive and productive as possible.

Other than these areas of continuing, albeit small, demand, there is no killer skill gap at present. There is no Java or SAP bandwagon like yesteryear that employees can set out to acquire and know will definitely secure them a job.

Smith advises, "If you want a new job my message is get qualified, get as much business knowledge and experience as you can, target an industry sector and specialise in it, and then settle down and accept that the really good times in IT recruitment will never return.

"Today, the IT market is in what I term 'make and mend' mode. We don't believe there is anything spectacular coming in 2003 or 2004. We think the majority of IT markets will decline further, with the exception of support and maintenance environments."

Workforce statistics

Harvey Nash's conclusions mirror the government's gloomy economic forecasts, feedback from employers, and the recent Holway/Ovum research on IT expenditure.

The data make for somewhat depressing reading. Certainly, redundancies by IT firms remain commonplace, according to the Office for National Statistics' (ONS) Labour Force Survey of about 60,000 households. During the third quarter of 2002 alone, 19,000 ICT (information, communications and technology) staff were made redundant from IT companies, while 10,000 ICT staff were made redundant from IT-using companies. This leaves unemployment rates at 5.7% and 4.4% respectively.

Small wonder then that staff turnover in the IT sector is at its lowest level since 1995, according to the most recent labour turnover survey by the people management experts, the Chartered Institute of Personnel and Development (CIPD). Its research shows that employee churn for the professional and technical sector has fallen by more than 5%, dropping to 15.8%. (The overall labour turnover rate is 18.2%.)

Not surprisingly given these figures, demand for IT staff as registered by recruitment agencies fell back significantly in the third quarter of 2002 according to research by Andersen and the Recruitment and Employment Confederation. This appears to confirm that the IT sector is still firmly entrenched in a period of market downturn. Demand for permanent IT staff has slumped, while demand for contractors has now been in decline for 20 solid months.

But despite the negative implications, those in work should gain some comfort from the fact that IT salaries are still 30% above the average national wage, according to research by Computer People, although this gap is now half what it was in 1992.

And according to the ONS, employment in ICT firms remained static during the third quarter of last year, with 296,000 people working in telecommunications and 612,000 working in IT. Indeed, the total number of ICT staff employed in the UK increased by 16,000 in the same period, reaching 1,104,000.

Increases in employment occurred in most occupations, with the exceptions of telecommunications staff and ICT managers, which exhibited a small decrease over the previous quarter. However, despite the overall increase, the total number of people employed in ICT occupations remains 46,000 below the level registered for the third quarter of 2001. "We're predicting that the IT recruitment market will stay pretty much the same this year assuming the economy does not change, with no significant increase or decrease in job vacancies. But if a war happens then this will all change," advises Hepburn.

You work in a mature recruitment marketplace now. Welcome to the reality zone.

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