The Global Financial Crisis (GFC) has had a squeezing impact on the availability of contracting work in the IT industry in Australia. While Australia has been somewhat sheltered from the aftershocks of the GFC, the reduction in business confidence resulted in a reduction in the number and size of large IT projects, resulting in a decreased demand for IT resources and, consequently, in downward pressure on contracting and salary rates.
Or has it?
The following three statements are taken from the annual salary review published by the international recruiting company, Robert Walters (highlights are mind):
The relative strength of the Australian economy, coupled with the receding risk of further jolts to the recovery, ensured that the employment market improved markedly throughout the course of 2010. Permanent employment rebounded strongly at all levels and across all sectors. Whether it was front-end sales staff in commercial businesses or support professionals in banking firms – be they local or international, small or large – increased optimism and demand resulted in a rapid and well-publicised rise in recruitment activity.
Unemployment levels at the beginning of 2010 were lower in Australia than most Western economies. This, coupled with increased recruitment demand, resulted in supply shortages and wage pressure in some areas.
Australia should continue to see strong employment growth in 2011. Both contract and permanent hiring in all sectors is expected to increase, with a necessary reliance on temporary labour to bridge the gap caused by an economy close to full employment. In particular, the traditional resources boom states – Queensland and Western Australia – are likely to replicate the levels of demand and related salary inflation seen in previous prosperous times, provided major investment projects continue in these areas and the Asian economies continue to grow.
As the ‘war for talent’ intensifies, firms will need to be alert to market rates and competitive forces, while engaging and communicating with high performing talent, to ensure they retain their key employees.
The strength of the Australian economy will encourage more overseas-based organisations to consider expanding their operations into the country, which will cause further strains on labour supply. However, organisations prepared to hire specialist skills from overseas and recruit from alternative national locations will secure quality candidates.
The Australian economy remained relatively robust in 2011. Although market conditions were stronger than many other countries and both unemployment rates and public debt were lower, Australia was not isolated from world events. Uncertainty in the global economy began to impact employment markets and overall confidence levels across the country and it is now widely anticipated that unemployment levels will increase marginally in 2012.
The often publicised ‘two speed’ Australian economy created inconsistencies in the employment market across the country. In parts of Western Australia and Queensland, wage inflation and labour shortages – for both skilled and unskilled roles – go hand-in-hand and have increased to all-time highs. Significant salaries exist for mining professionals willing to work in remote locations as a result. However, the natural resources boom only employs a small fraction of the labour market and cannot correct the slowdown in other sectors. With proposed Carbon and Resources Super Taxes to be implemented in 2012 and the potential for a ‘managed slowdown’ of China’s growth, this over-reliance on the resources sector could prove costly.
Financial services and property, two significant sectors in the Australian employment market, will continue to face challenging trading conditions in 2012. This is likely to result in lower levels of recruitment activity. More important is the lack of confidence witnessed in SMEs, which employs the majority of the workforce in Australia. This sector remains a key barometer for the overall health of the employment market and these organisations are already predicting a challenging 2012.
Caution will exist amongst both organisations and professionals. As a result, we do not expect hiring volumes to differ greatly from those experienced in 2011. In contrast, temporary and contract recruitment activity will remain high in 2012 as it has the effect of alleviating skills shortages in high demand industries, such as the engineering and resources sectors in Queensland and Western Australia.
Proximity to Asia will not isolate Australia’s employment market from tough global conditions in 2012 but will ensure it is better placed to continue to whether the conditions than other developed economies. We anticipate 2012 will follow similar employment patterns to those experienced in 2011.
The Australian economy proved relatively robust in early 2012 and headline figures remained comparatively healthy in contrast to many other countries. However, a combination of the slowdown of the mining and resources sector, the Chinese economic deceleration and the effects of global economic uncertainty eroded business confidence.
The well-publicised slowdown of the resources sector led the government to review its own revenue forecasts, which affected momentum and sentiment in the wider economy. Concerns over the costs of major mining and resources activities led many organisations to re-evaluate local investments, leading to projects and hiring being put on hold. This trend was particularly exaggerated in Queensland as the new State government implemented cost and investment cutting measures.
These tough trading conditions led to limited growth in the financial services and property sectors, both traditionally major employers, resulting in reduced hiring activity. Recruitment processes also lengthened, especially at senior levels as organisations became more cautious and therefore took longer to sign-off new roles and approve increased headcount.
The Australian market will continue to be influenced by international trading conditions in 2013. However, there are indications of recovery in the resources sector as projects put on hold in 2012 are restarted. This is likely to have a positive effect on the wider economy, leading to increased confidence in all areas. Despite difficult trading conditions in 2012, even slight increases in momentum should lead to increased recruitment in 2013.
Make of this what you wish but then compare with the following two headlines:
Job prospects bright for digital professional
The Australian, 1 Feb 2011 – based on the above Robert Walters survey
IT worker shortage continues as jobs remain unfilled -
CIO Magazine, 26 Feb 2013 – based on a study by the recruitment company Candle
So it seems like Truth is in the Eye of the Beholder.
Think about it!