NEWS ANALYSIS: IT body count

NEWS ANALYSIS: IT body count

Eighteen months ago, recruitment companies were desperately searching for people with IT skills to fill the "IT skills shortage". How things change.

The need for cost-cutting has resulted in a flood of talent hitting the streets after mass redundancies.

"Without question, the IT sector has been hit harder than any other," said Matthew Gordon, NSW state manager of recruitment specialist TMP Technology. "[This applies] particularly to the employees of any US-centric vendors, which generally cut jobs further away from home before the States."

The vendors were not alone in cutting back: developers, distributors, resellers and service providers all followed suit. One of the hardest hit industries, telecommunications, has proved one of the most turbulent. Massive restructuring at Telstra, the Cable & Wireless sale of Optus to SingTel, and the demise of One.Tel all resulted in extensive staff cuts. "It is amazing to see such highly qualified candidates on the market," said Gordon. "Twelve months ago you couldn't find any systems architects, now you can pick and choose them."

Equally as surprising is the number of skilled IT staff left without jobs in the wake of some major dramas in the IT distribution channel. The fall of CHA and Siltek left hundreds without work, while even the largest of the disties, Tech Pacific, made significant reductions to its headcount.

While it is a hard ask to measure just how many people have been displaced in the industry, figures from IT recruitment companies paint a clear picture of the changing IT market. David Evans, managing director of the NetBridge (IT services) and Affinity (IT recruitment) businesses of the Volante Group, said this time last year Affinity listed 26,000 available IT jobs. Today, that figure stands at 11,000.

Evans also suggested there has been a significant increase in the number of resumes the Affinity business holds for job seekers - now storing upwards of 30,000 to 35,000.

For employers, Evans senses opportunity. He said the industry needed a shakedown due to the unsustainable salaries being offered to IT staff by dotcoms last year. "Now is a good time to pick up skilled people, or even acquire businesses that match your model," he said.

"A lot of the good people were leaving solid companies to join dotcoms for 30 and 40 per cent more money," he said. "Now they are going back to their old employers looking for work. The last 12 months has been a real lesson for the people who walked out for short-term gains."

Experience still in demand

Evans said employers are still seeking experienced and skilled IT staff, and those with the skills rarely have trouble finding their feet again in a relatively short period of time. The movement of channel identities over recent months would suggest this is the case - ex-Siltek managers Hugh Evans and Michael Bosnar quickly started up new ventures in Happen Business and Exeed respectively, while ex-CHA man Roger Bushell quickly found a home at Ingram Micro. And as enterprise reseller Praxa began feeling the strain of high costs, two of its most experienced staff, Angela Hede and Brian Walshe, soon found work at Interpath and Avanade.

Some organisations are still hiring aggressively, according to TMP's Gordon. What has changed is that employers can now choose from 10 good candidates, and rather than choose on the basis of one set of skills an employer can demand technical skills, business skills, interpersonal skills and sales skills from one candidate.

Will the mass sackings continue for another 12 months? Last week's events were not encouraging. Locally, Commander Communications laid off a further 110 workers, while Computer Associates took the axe to 35. But Gordon suggests the market will pick up soon enough. Ten years ago he saw a similar situation, and while IT was one of the first sectors hit and one of the hardest hit, it was also the first to recover. Demand for skilled IT workers returned to even higher levels. He suggests we should expect the same scenario in the near future.

IT BODY COUNT - October 2000-October 2001Distributors CHA - 37.

Ingram Micro - 18.

Siltek - 155.

Tech Pacific - 105.

Enterprise IT resellers

Avanade - 25.

Com Tech/Dimension Data - 190.

IT&e - 11.

Logical - 50.

Praxa - 63.

Senteq - 11.

Solution 6 - 150.

Volante Group - 25.

Telecommunications companies

Dingo Blue/AGL - 25+.

Commander - 110.

Optus - 350.

Vodafone - 250.

Web developers/ISPs

AOL Australia - 20. - 20.

NetRegistry - 21.

Sapient - 70.

Spike - 30.

XT3 - 29.

Vendors (Australian offices)

Ability - 40.

Bullant - 29.

Compaq - 28.

Computer Associates - 35.

Cisco - 150.

Gateway - 200.

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