The North East seems to be faring particularly badly in the economic downturn. Damian Hayes, head of permanent IT recruitment at NetworkersMSB, a specialist IT and telecoms recruitment consultancy with offices across the UK, says companies in the North East are recruiting fewer staff than comparable organisations in other regions, although he is now seeing a downturn in the number of vacancies in other regions as well.
Sue Ormerod, a managing consultant with Newcastle-upon-Tyne-based consultancy Nigel Wright Recruitment says that much of the recruitment that is currently taking place is driven by projects involving governance issues, such as data security and disaster recovery, with the Oracle contract market particularly buoyant and rates holding up well. Hayes confirms that Oracle is much sought after in the permanent market as well, along with .net and Java. "We are also working with clients who are looking to bring in infrastructure expertise and in particular IP telephony," he says.
Another trend, says Ormerod, is for employers to upskill rather than downskill when recruiting, choosing to spend a little more on a third-line support person rather than second-line because they feel it will add much more value to their operations. At the same time, she thinks, the market has been muddied by recent redundancies at Northern Rock and other financial institutions in the region. "As people who have been made redundant or who are currently unemployed get taken on, they do not leave a gap behind them," she points out. "And it is easier to find a large volume of candidates, but quality is still hard to find."
That is the experience of IT service provider Knowledge IT. It employs about 75 staff at its offices in Washington, Tyne and Wear, and Leeds, primarily in infrastructure support and deployment. George Sanger, the company's sales and marketing director, says it has been able to take on excellent help desk and first-line support staff who have been shed by large employers in the region, but that it still struggles to find candidates with good high-end technical and business skills.
Such is the shortage of experienced candidates, says Sally Waterston, a director of Waterstons (an IT services company based in Durham with technical consultancy, development and business consultancy divisions), that "if we come across someone who is fantastic, we will take them on even if we do not have a vacancy."
Because of the difficulty in finding experienced high-quality candidates, the region is a good place for graduates looking for a start with a smaller employer. "We take on a lot of graduates and grow our own people," says Waterston, "and our shallow hierarchy means people get a huge amount of trust and responsibility and there is no ceiling on their aspirations. Our current technical director started out as a graduate and was made technical director after five years, and we have no limit on the number of people we make executive consultants."
Waterston thinks the focus on graduates is also a consequence of the many excellent universities in the region and the fact that many people who move to the North East to study stay once they graduate because they like the area. "The North East offers so much culturally that you get in London, and there is beautiful countryside, but it is much quieter," she explains.
However, salaries in the North East are typically lower than elsewhere. "It is below the national average for a number of technology skill areas, and that is a major reason why companies looking to hire in the North East are failing to attract candidates," says Hayes. "One recent example is a Newcastle-based client who is looking to hire a voice over IP specialist but is offering a salary budget of £30,000. Appropriately qualified candidates are earning more than £35,000 in other areas of the country and in excess of £40,000 in the South East." As a result, he says, "We are seeing people being more mobile and more prepared to work further afield for a better salary."
Yet, Ormerod says that for many IT staff in the region, this is not really an option, because they are landlocked. "A lot of people come back to the region because they have children and need childcare assistance from grandparents, or because they have elderly relatives they need to care for. It is a big upheaval for them to move out of the region, and if they do, they often move back," she says.
Commuting even within the region can also be difficult. "It is just a little bit too far to commute on a daily basis even between Newcastle and Leeds," she says.
This "captive market" is probably one reason why salaries remain low. Hayes thinks another factor is that many organisations in the region seem to be constrained by inflexible pay scales and cannot make exceptions to secure the IT staff they need. However, others recognise that they are competing in a national market. Waterston says her company pays competitive salaries compared to companies in the South East, although housing and the cost of living are cheaper.
In addition, companies in the North East compensate for slightly lower salaries by being more willing to offer training, and by working hard to hold on to staff. "Because we cannot find people who already have the skills we need, we are putting a lot of people through training," Sanger says. "There is a risk when you train people that they will take those skills elsewhere, so we make sure we look after people to keep them." Ormerod confirms that with a talent war for the very best people going on, HR departments in the region are working hard to retain staff, and have very good development plans in place to help people progress.