IT salary survey: hard first quarter for 2009

Nick Enticknap There's no getting away from the fact that times have been tough in the first quarter. The survey of appointments,...

There is no getting away from the fact that times were tough in the first quarter of 2009.

The survey of appointments, data and trends, compiled by Jobadswatch for Salary Services Ltd (SSL), shows permanent IT jobs advertised were less than half what they were the year before (and a quarter down on the preceding three months). Jobs for contractors plummeted two-thirds from the year before (and one third from from the previous quarter).

The permanent market is now at its lowest level since 2004, while the contract market is down to its 2003 level. But considering the UK economy as a whole contracted at its fastest rate for 30 years during the quarter, these figures could have been worse.

“The market is not at zero: we are still trading and doing reasonably well”, says Harvey Nash Group marketing director, Paul Smith.

Recovery scepticism
There were mixed signals during the quarter about future prospects. The government is forecasting an immediate slackening of the recession: Alastair Darling’s Budget statement put the decline in GDP in the first quarter at 1.9%, but forecast a total decline for the year of just 3.5%, followed by a return to growth in 2010. Other official and unofficial observers have discerned green shoots of recovery or are at least forecasting an immediate bottoming-out of the recession. Recent growth in people looking for houses and in retail sales have been cited in evidence.

Paul Smith does not agree: “We are sceptical about claims to see green shoots now. We believe things will start changing around the end of next year.” Smith points out that, while the recession has hit finance and manufacturing hard, “we have not yet seen the impact of any downturn in government spending”. He forecasts the main effect here will occur next year, after the general election: “The new government will start very aggressively cutting public spending straightaway”.

The direct effect of such pruning on the IT recruitment market will be small: government bodies account for just 2% of the permanent jobs market, and a higher but still small 7% of the contract market. There may however be a knock-on effect among software and outsourcing companies that do most of their business with public sector organisations.


Jobs by sector
The SSL figures confirm significant differences in the rate at which IT advertising has declined in different sectors. Finance unsurprisingly fared worst in the first quarter, with the jobs on offer falling two thirds from the year before. In the contract market, the position is even worse: finance jobs there are down three quarters on the year before. This sector now accounts for under a fifth of both permanent and contract markets; historically it has advertised a quarter or more of all jobs.

In the software industry jobs on offer were down by around a half on the year before. The IT industry as a whole, including the electronics companies, has not been affected quite as badly as the user sector, with the decline in jobs running at 51% compared to 61%.
The public sector has been least affected by the recession, as Paul Smith suggests, with jobs advertised running still at well over half the level of early 2008.


Jobs by region
The worst affected area for permanent jobs is London, with advertising down close to two thirds on the year before. The metropolis now accounts for under a third of the total market, compared to over 40% before the recession started to bite. The Midlands is weathering the storm best, with the overall decline in the area standing at just over one third.

Here the contract market presents a different picture, with a much smaller differential between London and the rest of the country. Jobs have held up best for freelancers in the north of England and in Scotland.


Jobs by skills
In terms of job positions, all types have been badly affected by the recession. Systems posts have fallen furthest, down nearly two thirds on the year before, while jobs for web specialists have held up best, down by only a third. All other categories are showing around half the number of jobs they were the year before.

The average salary across all jobs has fallen for the third quarter in a row, the decline standing at 0.6% this time. This is around the same as in the economy as a whole, where salaries outside the public sector have declined at around 1% over the year. The headline inflation rate, used as a guide by many employers for salary increases, is currently negative, at -0.4% for the year to March.

Rates in the contract market have fallen more, at 2.5%. The bargaining position for contractors is very weak at the moment, with the jobs on offer down 62% on the year before.
The skills in demand have remained very much the same. Among the number of small changes in the skills league table, it is noteworthy that ASP has risen to fifth, its highest ever placing. Javascript has more surprisingly moved into the top 10 for the first time, with more jobs on offer than the year before. The surprise is because Java is very much less in demand than the year before, as is J2EE (only Oracle and SAP of the top 25 skills have fallen faster), so both are sliding down the table. On the other hand, Ajax is with Javascript one of only three skills in the top 25 to show growth over last year. So there are mixed messages here for Java enthusiasts.

The third of the skills to show an increase is PHP, with jobs on offer up 10% on the year before, the biggest increase in the top 25. Linux, though down a quarter on the year before, has also fared better than most, so the open source movement is doing well as the recession bites.

In the lower reaches, Microsoft’s Vista operating system has finally entered the top 50, at number 49, with demand up a third on the year before. It is still 30 places lower than Windows XP and features in only around a quarter of the number of advertisements.


Brush up your business skills
Keeping your skills up to date is important at present, says Harvey Nash’s Paul Smith. Thinking commercially is even more so, especially for contractors who are by definition business people. “Contractors are going to have to learn about return on investment, else they will be out of a job”.

Smith also believes that those having difficulty finding employment may have to consider radical changes in lifestyle. “It’s no good saying you will only work within 20 minutes travelling time from home,” he says.

This willingness to abandon cherished principles of life applies to the entire population, not just IT professionals: “Everybody’s lifestyle will come under re-evaluation”.

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