Due to reduced opportunities in the Government sector, ICT contractors are ditching Canberra, according to a recruitment firm. This is sparking fears of an impending skills shortage in the Federal Government market.
The latest labour hire index from IT recruitment firm, Peoplebank, shows the average cost of an average unit of labour hire paid by the Federal Government to ICT contractors was at 1175 points in December 2009.
The result was 15 points down from 2008 and a decline of 50 per cent from the Index’s peak in 2006. Contractors hired by the Government dropped by a quarter in the last year.
The 2008 Gershon Review prompting government departments to shed ICT contractors in favour of permanent staff and last year's global financial crisis contributed to the outcome.
“We are still seeing the departments trying to meet their permanent staff targets set by the Gershon Review,” Peoplebank acting CEO, Jeff Knowles, said. “Each year we are seeing additional decline in contractor numbers.”
With pressure mounting from the declining market in Canberra, many contractors are flocking back to NSW and Victoria.
“The GFC made more contractors available than opportunities but things are starting to pick up and supply and demand has turned around,” Knowles said. “We are seeing 20-30 per cent increase in opportunities across NSW and Victoria.”
Banks headquartered in either state such as Westpac and St George are modernising their IT infrastructure, which presents work for ICT contractors.
But with virtually no ICT contractors entering Canberra, the Federal ICT labour market is going to be hit by a severe skills shortage, Knowles said. Peoplebank has forecasted contractor demand will increase in the Federal Government sector.
The company saw a shortage in niche skills such as Java, .NET development and business analysis. This is expected to push up hourly pay rates for contractors in those fields significantly and exceed the peaks seen in 2006-2007.