Computing contractors to cost more than permanent staff

Computing contractors to cost more than permanent staff

Demand from major projects will increase competition in the marketplace for employers and force many to move from contractors to permanent staff as wage salary demands increase

The price of hiring computer professionals as contractors is set to cost more than permanent staff thanks to the economy gaining strength, according to a new report.

The latest Clarius Skills Index indicated contractors will become too expensive and companies were better off hiring permanent staff as the local economy is set to strengthen in coming months and uncertainty of the global economy continues to loom.

Candle executive general manager, Linda Trevor, said demand from major private and public projects would increase competition in the marketplace for prospective employers and force many to move from contractors to permanent staff as wage salary demands increase.

“We are very close to the optimum supply of computing professionals and competition is going to increase wage demands. Employers will need to manage the changing job climate and plan ahead,” Trevor said.

“Remuneration is expected to grow around 10 per cent across all states and territories and given the project cycle, upward wages pressures will likely emerge for testers and developers in the next six months.”

The index revealed the supply of computing professionals grew 1500 people to 213,400 in the September quarter but demand only added 1300 jobs (to 214,300), narrowing the skills gap.

This followed a significant jump of 17,000 computing professionals through the June quarter when demand increased by 8.2 per cent to 213,100, outstripping supply which rose from 195,000 to 212,000.

The types of computing professionals in demand are business analysts, developers, helpdesk personnel, intelligence analysts, testers and java programmers.

Trevor said the shift between demand for contractors and permanent staff follows the business cycle, and greater uncertainty in the wider macro economy was causing the current shift away from hiring permanent staff.

“Businesses currently find it difficult to commit to permanent staff because of the uncertain outlook. The slowdown in permanent positions has happened very quickly between September and October. But this will change in the New Year,” Trevor said.

The Index noted the Melbourne market took the longest time in making hiring decisions, which was more demanding for contractors, due to the lack of skilled candidates such as project managers, business analysts and developers.

The Sydney market for IT contractors has slowed, but a turnaround is expected within the next six months that has been put down to a growing demand for iPhone programmers, according to the Index.

In Perth, companies are dealing with the skills shortage through taking on less experienced people and providing training. Demand for developers, business analysts, systems administrators and higher-level helpdesk staff was still strong in Perth.

“There are upward wages pressures for people with these skills,” she said.

Trevor said there was a trend towards new graduates from Perth going to Asia for a couple of years to gain experience.

“The market in Canberra is also now picking up due to the Federal Government’s hiring plans,” she said.

“The recruitment market for Computing Professionals in Adelaide is steady, and it is not difficult to fill a role where business analysts and developers are in demand.”

But statistics on the future supply of Computing Professional graduates out of tertiary education nationally is slowing.

The Department of Education, Employment and Workplace Relations’ (DEEWR) statistics on Award Course completions in 2010 show that 13,500 persons graduated with a degree in IT in 2010. This is only 14 per cent more than the number who graduated with this type of degree in 2000.

In comparison, the total number of higher degrees awarded grew 68 per cent from 1999 to 2009.

“The slowing rate of IT enrolments and graduates coming on to the market is going to be increasingly difficult for organisations, in both the private and public sector, to find the right computing skills for a wide range of critical projects,” Trevor said.

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Tags managementClarius Skills IndexCandlemacrco economyIT contarctors


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