The ICT sector is facing increasing uncertainty as new job advertisements drop, available jobs are filled, and shorter contract roles become more popular, according to the latest Longhaus-ITCRA Australian Tech Index.
The study is a combination of eight indicators which provide a summary of changes in the level of ICT business activity within Australia, drawing on information from the Australian Bureau of Statistics, Department of Employment and Workplace Relations (DEEWR), the Australian Stock Exchange and ITCRA’s SkillsMatch data.
It also polled 50 ICT decision makers from medium-to-large Australian ICT organisations on their forecasts for ICT spending, project approvals, and demand for ICT permanent employees and contractors in the third quarter of 2012.
The most significant contributor to the trend is the fall in DEEWR’s Internet vacancy index, which shows a 29 per cent drop in ads for ICT professionals since the beginning of 2011.
Longhaus managing director, Peter Carr, said while the Tech Index has remained at the same level during 2012, a longer-term downwards trend is evident.
“The Index has fallen each quarter since the beginning of 2011, aside from a minor two point increase in the fourth quarter of 2011.This softening has been particularly pronounced for software and applications programmers, and ICT business and systems analysts,” he said.
Carr mentioned it comes on the back of strong growth in employed ICT workers, as with higher employment overall, the gap between supply and demand narrows over a relatively short period of time.
“With falling job demand, low unemployment and employed labour trending, we expect the number of employed ICT workers to increase. However, many placements will be made as a function of regular turnover, particularly due to the trend of shorter contract durations,” he said.
However, ITCRA CEO, Julie Mills, said more organisations are looking to take on workers rather than downsize their workforce in the coming quarter.
The index indicated 46 per cent of organisations plan to significantly or slightly increase the number of permanent or contract ICT staff while 24 per cent want to considerably or slightly decrease their contract ICT staff. Six per cent are planning to do the same with permanent staff.
“In the second quarter of 2012, we saw the number of ICT contractor placements increase. However, we also saw a trend towards shorter contract durations of 1-3 months, which we believe may be a strategic move in response to prospective cost cutting,” she said.
The study also showed that the respondents were no less optimistic for the coming quarter than they were over the preceding 12 months, but they predict slightly more turnover of ICT contractors than in previous quarters as well.
“For the remainder of 2012, we expect that ICT economic activity will be sustained by the continuation of initiatives begun in late 2011 and early 2012. We’ll also see continued confidence in the financial and insurance industries, which are significant employers of ICT.
“In light of shorter contracts and the expected completion of a number of projects, new projects will become increasingly important to maintain existing employment. We do expect that there will be a drop in the number of employed ICT workers, albeit from a relatively strong position,” Mills said.