Business-critical projects ensure strong IT recruitment despite economic fears

There has been a distinct split between organisations favouring caution and avoiding permanent recruitment, while others have continued to implement strategic and operational plans intended to support organisations' future success.

The IT recruitment market returned to strength in spring and even with the latest signs of economic uncertainty, hiring managers are prioritising business-critical IT needs over cost-cutting, writes Sid Barnes, executive director at specialist IT recruitment consultancy Computer People.

The new financial year brought fresh budgets and a spike in IT job vacancies but there are signs of caution in the market as employers anxiously wait to see what is in store for the economy. There has been a distinct split between organisations favouring caution and avoiding permanent recruitment, while others have continued to implement strategic and operational plans intended to support organisations' future success.


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In the 2008-2010 recession hiring managers opted for a more flexible workforce by using contractors so that, should a project be cancelled to cut costs, staff associated with that project could be more easily re-deployed. Despite the uncertainty surrounding Eurozone and US government debt and the looming concern of a double-dip recession, organisations are less able to follow this pattern again. Projects delayed from the last recession have become business-critical in the intervening period and reinstated. There is now an understanding that it could take many months/years for the market to recover and that such projects trump cost-cutting as a necessity for business survival.

For the first time since early 2009, the IT sector has recently seen a swing towards a candidate-led market. As demand for candidates increased, the best have been able to cherry-pick the opportunities available. Counter offers for the best candidates are rising, and hiring managers need to recruit quickly to secure the best staff. Around 50% of permanent jobs are now being converted into contract opportunities after six to eight weeks as employers struggle to fill these roles. The latest economic uncertainty is weakening this trend, but skilled candidates remain in strong demand and weak supply.

There is an upward pressure on permanent and contractor pay. Investment in new business development projects is pushing pay up with significant month-on-month rises for interim IT Directors and SAP contractors this month (up 3.8% and 2.43% respectively). Pay for the more "business as usual" contractor roles - such as SQL server, testing and database specialists - has dropped slightly. On a regional level, a trend for relocating datacentres is driving salary growth in some areas. We have seen the aggregate wage rise in London (£58,532), the Midlands (£39,475) and in the North (£37,809) as a result.

It's safe to say that, while economic doom sells papers, businesses are still facing commercial necessities that need to be met through IT. While it pays to be cautious, too much caution could stagnate the employment market and stifle further growth. Most businesses recognise this and hence, for the meantime, it's business as usual.


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