Job market recovery blossoms

Figures for the third quarter prove that the recession in ITis definitely over and IT professionals looking for their next job...

Figures for the third quarter prove that the recession in ITis definitely over and IT professionals looking for their next job can expect a pay rise above inflation. Nicholas Enticknap reports on the latest SSL/ Computer Weekly salary survey

Jobs available for IT professionals surged upwards in the third quarter of 2004. The number of jobs advertised on the web nearly doubled compared to a year ago. It was also up a third on the total shown in the second quarter, which is remarkable as the third quarter contains the summer holiday period, and so advertising, along with other business activity, usually declines markedly.

The position in the contract market was even more encouraging, as the number of job ads more than doubled relative to a year ago, and was up by a half on the second quarter.

Furthermore, in both permanent and contract jobs the salaries on offer were significantly higher than a year ago. In the permanent market the median rise was 4.3%, which is only the second time in the past three years that it has been above the headline rate of inflation, and is the highest since the peak of the Y2K boom in early 1999. In the contract market the rise was even greater, at 6.7%.

There is now no doubt that the prolonged post-Y2K recession in the IT market is finally over. Jobs are available in plenty again, and the balance of power is swinging from employer to applicant. The IT market has now had three consecutive quarters of growth, and the level of growth has increased each time.

These are findings from the latest issue of the SSL/Computer Weekly Survey of Appointments Data and Trends. Industry opinion confirms the upbeat message emerging from the survey.

"All the job boards are seeing pick-ups in traffic and pick-ups in jobs," says Keith Robinson, operations director at online jobs board Totaljobs. "There are plenty of quality jobs available," says Paul Smith, group marketing director at recruitment consultancy Harvey Nash.

Another positive sign is that some of the big IT companies are recruiting again, including IBM, Oracle and SAP. According to Robinson, "A lot of US corporates that weren't taking people on are now back recruiting."

This is not only a big stimulus to the market in itself - we are talking about thousands of new jobs worldwide - but historically it has tended to kick smaller IT companies into life.

But whereas the overall picture is rosier than it has been for five years, two cautionary notes need to be made. The first is that, although the growth is very welcome, it is coming from a very low level. The number of jobs advertised on the web in the last quarter is the highest for more than two years, but it is still only a third of a level of three years ago, and the land of plenty of 1998-1999 remains but a distant memory.

Growth from here is likely to be steady, rather than spectacular. Robinson says, "We'll get a more manageable climb up the ladder this time."

Smith agrees, "Year on year growth will slow down to a steady 5% to 10%".

The second reservation is that the growth is not uniform: demand is much stronger for some types of job than it is for others. Smith says, "There is still gloom at the lower end: there are not too many support-type jobs and low-end developer jobs, not enough to soak up the demand."

The figures in the SSL/Computer Weekly survey provide evidence to underline Smith's finding. Demand for junior developers doubled, but demand for senior staff more than trebled. Furthermore, the salaries offered to junior developers rose by less than the average, whereas those for senior staff did so by more than the average.

So where is the demand? "There are a large amount of corporate infrastructure jobs, such as for security, and there is a lot of demand for outsourcing. Most of the demand is for high calibre people: it is difficult to fill these posts," says Smith.

Geographically, the biggest growth in permanent jobs in the third quarter was in outer London, where the jobs on offer grew by two-and-a-half times compared to a year ago. This region is now the biggest employer, taking over from southern England where growth this time was slightly lower than the national average.

All areas of the UK saw substantial growth, though. The smallest rise was in Scotland and Northern Ireland, but even here the number of jobs on offer was up by two-thirds on a year ago.

Split by industry sector, the biggest growth was in the finance sector, which did marginally better than the software houses. Both sectors advertised more than double the number of jobs of a year ago. In contrast, manufacturing remains a very depressed area, with jobs ads up just 9% on a year ago.

In the contract market, the pattern is very similar. Outer London and the finance sectors were again the biggest growth areas, with increases even larger than in the permanent market. Scottish and Irish IT professionals have more encouraging news here: the number of contracts offered to them were up two-and-a-half times on a year ago. Even manufacturing specialists can see a glimmer of light, with jobs up by nearly a half compared to this quarter last year.

Overall, the contract market is in very good shape. "There are more projects on than there have been for many years - new projects, developments and migrations, where CIOs are beginning to meet the demands of businesses," says Smith.

In the skills market, SQL has resumed its position at number one in the league table after a surprise fall to number four in the second quarter.

There are encouraging signs for IT professionals with comms skills, who have been enduring a gloomy time since the collapse of the dot-com boom. Demand for network specialists rose 91% over the three months, virtually the same as the overall average after several years when it has been substantially below average. Of only two top 25 skills which featured in more than double the number of ads this time, one is TCP/IP, and it has shot up the table as a result from 21st to 13th.

It is good news also that Cisco has begun recruiting again in the US. "People with good Cisco skills who have managed to keep them up to date are going to be the first to be snapped up," says Smith.

The other fast riser in the top 25 is Microsoft's C# programming language, which is now up to 15th. As organisations start investing again in IT infrastructure, new wave Microsoft skills continue to climb up the league table, and .net makes its debut in the top 10 this time. Java is also sustaining its recent recovery, and has held on to the second place in the table it reached last time (it was sixth a year ago).

Some more established skills are falling in demand as a result. They include Oracle, which has tumbled from number three down to number seven, and Solaris and Access, which have both fallen six places this time. Solaris is suffering from the steady increase in popularity of Linux, as indeed is Unix, which has surprisingly fallen from first in Q3 2003 to fourth this time.

Job ads quantified to produce a comprehensive analysis of the IT market   

This article is based on information contained in the SSL/Computer Weekly Quarterly Survey of Appointments Data and Trends.  

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 £250, and for an annual subscription is £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.

Readers can order it at  www.salaryservices.co.uk

 

Please visit our partner, totaljobs.com for permanent and contract IT graduate jobs 

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