Growth stifles web firms

The web development industry in Western Australia is, like many other sectors, benefiting from the flow-on effects of the state’s mining boom.

But it has also fallen victim to the staff shortages that are curtailing businesses across a range of sectors, particularly among mid-tier firms.

South Perth-based Clue Design has nearly doubled the size of its web development team in the past year, taking the company from 20th to 10th on the WA Business News Book of Lists web developers list.

The company’s revenue also doubled last financial year, driven by growth in demand from services companies associated with the resources sector, such as training and employment agencies.

According to Clue Design director Michael Craig, the company has increased its salaries by 40 per cent year on year, in order to retain its workforce.

“We’ve got to start putting our prices up because we just can’t survive otherwise,” Mr Craig said.

Leederville-based web development and design company, SUMO, has also grown its team from seven to 10 developers in the past year, bringing its total staff to 14.

SUMO is ranked 13th on the Book of Lists.

According to business development manager Chris Braine, the company has hit capacity in terms of the workload it can manage with the present team.

“Our pipeline is probably three months out in terms of being full. It’s a day-by-day issue, looking at the schedule and figuring out how to get the work out,” Mr Braine said.

The company plans to increase its staff to 20 if a larger office space can be found.

Mr Braine said the company was actively looking at other options, including recruiting people from overseas.

He said client growth was being driven by companies in the mining industry, as well as associated businesses such as human resources firms.

“Traditionally, we’ve been heavily involved in the business to business market, but there has also been a fairly strong pick up in the retail and consumer side of the market,” he said.

Mr Braine said companies were increasingly adopting a strategic plan for their websites.

“Rather than a flat brochure, companies are lifting the bar with services like virtual boardrooms, to link people from mine sites and overseas,” he said. 

Another trend is an increase in requests for customised applications, such as online shopping carts, web marketing functions and search engine optimisation tools.

Fujitsu Australia is WA’s largest web development company, employing 140 web developers within a total staff of 380.

The company has put on an additional 20 web developers in the past year, although staff shortages continue to be an issue, according to the company’s western region general manager, Tom Hayes.

“WA is one of those areas where you can’t hire enough people,” Mr Hayes said.

“What we’ve found is you really have to change the conditions you’re offering people, in order to get the bright, young kids on board.”

While there has been little movement among the sector’s bigger players, several takeovers have occurred at a mid-tier level in the past year.

In March, Subiaco-based advertising agency 303 Group acquired Pivod Technologies’ web business, Pretzel Logic.

Two months later, Bentley-based WebFirm Business Solutions was bought by ASX-listed search engine and online media company, Ansearch Ltd, which is based in Melbourne.

WebFirm has increased its staff by 50 per cent in the past year to 18 full-time developers and is hoping to expand internationally with the backing of Ansearch.

Meanwhile, Freckle Creative, which was ranked eighth on the Book of Lists last year, went into liquidation last month.

The company, which had 14 staff, had just won two of the Australian Web Industry Association’s awards in August.

Newcomers to the top 20 in the Book of Lists include Inglewood-based BAM Creative and Mt Hawthorn-based Multiverse Pty Ltd.