The IT recruitment market continues to hold up well in the jittery economic climate. House prices are falling, business insolvencies are up and food and oil prices are rising fast, but IT professionals still have plenty of jobs available to them, according to the cwjobs.co.uk Survey of Appointments Data and Trends compiled by Salary Services Ltd (SSL).
Recruitment agency Harvey Nash is comfortable with the present and confident about the future, says group marketing director Paul Smith. "We have had a great year, with considerable growth in our whole business, even in the US. Since then the first quarter has been in line with analyst expectations, which means continued growth. So we are seeing very little sign of a downturn: it is only there in certain parts of the financial services sector."
Over the whole market, permanent jobs were up a healthy 30% on this time last year, and contractor positions were up 14%. Compared to the last quarter of 2007, though, permanent jobs rose only slightly, and contractor jobs fell by 11%. So there is some evidence of recent retrenchment, but the market is still a lot healthier than it was a year ago.
Smith summarises, "This signals a holding pattern by businesses. We are going to continue, we are not going to invest dramatically, but we need some investment because that is what our competitors are doing."
The investment caution shows most clearly in the salaries on offer, which were up just 1.4% from a year ago, the second lowest increase in the past four years. In this respect the IT industry is mirroring the economy generally, with wages inflation nationally falling. It was down to 3.7% at the last count. Bucking this trend, rates offered to IT contractors have continued to rise, and are up by nearly 3% on a year ago on average.
Senior developers and analyst programmers have fared surprisingly badly in the pay stakes, with salaries offered to permanent staff down 1% on a year ago in both cases. Junior developers have done rather better. All other job categories have seen an increase, though in most cases it is a very small one, especially with management positions where the rise is barely noticeable. With contractors the rates offered to all grades of developer have fallen by an average 3% again all other categories are up except for database specialists, who have seen a fractional fall.
In all, 15 of the 55 job categories saw the salaries on offer lower than a year ago. Comms managers, systems consultants, network sales support staff, operations analysts, training officers and technical authors were among the groups to suffer.
The finance sector is where one would expect to see the biggest impact of the downturn, following the highly publicised financial problems of Northern Rock, USB and Bear Stearns. Here permanent jobs are only just up on the last quarter, by a smaller amount than in any other sector, and contract jobs have fallen more dramatically, down 16%. In both areas jobs remain well up on a year ago, by 28% in each case, so the impact is not as alarming as might have been feared.
Indeed, inner London, the heartland of the financial services industry, showed the highest increase of any region over a year ago in both the permanent and contract markets. The increase from the fourth quarter was smaller, but with permanent jobs up 6% this was still twice the market average. The rate of growth in outer London and southern England was much smaller in both permanent and contract markets.
East versus west
Elsewhere, the east of the country fared worse than the west. The smallest increase in the permanent market over a year ago was in the East Midlands, while contractors in that region actually had slightly less jobs to choose from this time. In the North East freelance jobs were down even more, at 20%, though the permanent jobs on offer did show a healthy increase.
In Scotland and Northern Ireland permanent jobs rose by the largest amount - just over 50% - but the news was not so good for contractors, with the number of posts on offer falling by 11%. These two regions account for a relatively small proportion of the market - about 4% of both permanent and contract staff.
Every industry sector showed double digit growth in permanent jobs over a year ago, except manufacturing, and even here there was a slight increase over the first quarter of 2007 (whereas in the fourth quarter of 2007 jobs in the sector fell significantly). In the contract market jobs in manufacturing companies increased by more than a half over a year ago, better than any other area except retail and the public sector.
In the skills league table there has been little change: the top 10 skills were exactly the same as in the fourth quarter of 2007, though there have been some more radical changes over the past year (see table on page 23).
As has been the norm for a couple of years now, the biggest annual increases in demand were registered by Microsoft's new-wave development skills, .net and C#, which were up by 28% and 25% respectively. Next came PHP, which with a 20% increase has climbed into the top 25 for the first time. Its rival ASP remains in eighth place.
The skill to drop out of the top 25 to make way for PHP is UML, for which demand surprisingly fell by 20% over the year. It is now in 28th place.
Unix jobs, in contrast, continue to decline: there was a fall of 10% in the number of jobs offered on Unix platforms. The demand for Unix skills has fallen by a much smaller amount, 1% on a year ago, but this is still significant in the context of a 30% rise in the overall market over the same period. Linux has shown only a small rise in demand this time, though it is still in 14th place.
Prospects for the future
Overall, the prospects for the future are not too bad. The Confferederation of British Industry is predicting more growth in the economy next year (1.9%) than this (1.7%). In a survey of senior IT executives, only 17% said they expected to see a decline in their budgets, and 37% expected them to go up.
More significantly, nearly 75% said they still had a skills shortage. Smith emphasises this point. "Look at the reasons why people offshore. Only 37% are doing it for cost reduction purposes, while 39% are doing it to solve the skills shortage, so the skills pool is still very limited."