Working in a contracting market

PERTH IT professionals have abandoned the freedom of contract work and are pursuing the security of permanent tenure.

There are several factors behind this shift, but for once nobody is suggesting the September 11 events were directly responsible.

Instead, what one recruitment specialist referred to as a “candidate-rich market” has developed in the past three to six months, and this is allowing businesses to be particularly selective when employing staff. While IT salaries have remained steady of late, a lack of appealing contracts and the need for greater employment certainty are drawing professionals to prefer permanent positions.

“I think (recruitment) clients realise that, rather than paying contract rates, they could get somebody just as good on a permanent basis,” a recruitment specialist said.

“We’re finding a lot of the contractors are considering permanent work because the contract market is not as good as it has been.”

Brian Halberg, a consultant at recruitment firm Mason & Partners, said that two base-level IT positions the company recently advertised attracted 280 applications.

He said the signs of a decline in contract work in the sector probably first appeared in late 2000, after the so-called Y2K bug proved to be insignificant. Since then, employers have not taken computer systems so seriously and have been willing to spend less money on that part of their business.

He said the IT sector was probably the most rapidly changing sector in the employment game, while in many other professions, the mix of permanent and contract workers had been steady for the past two years.

Under the influence of the tech boom of the late 1990s, many businesses hired more IT people than they really needed. Since then, however, they have not replaced these people when they’ve left.

“If I were to go back in time seven years and tell a managing director that, five years from now he was going to employ a 22-year-old, pimply faced kid and give him 40 grand a year just to look after his computers, I would have been laughed out of the office. That’s fact. They would have thought I was a nut,” Mr Halberg said.

Many current IT job seekers previously worked with a strategic focus – formulating e-commerce policies or developing marketing plans – whereas today’s market is more interested in lower level positions, like database administrators. Mr Halberg considers this to be a short-sighted view.

“That’s what they look at. That guy can fix things and doesn’t cost much, this guy is strategic but he costs a squillion, and you don’t know when the pay-off is going to come, so they get rid of him,” he said.

But Tony Ciallella, managing director of specialist IT recruitment firm Gryphon Consultants, said the current downturn in the broad technology market was just part of the global cycle that followed the implosion of 2000.

He said economic growth forecasts for Australia and WA were promising, and predicted that within a few months, businesses again would be seeking to employ more IT staff.

“But it’s a fool’s paradise … (IT workers) get back into a job, they take what they believe will get them through,” Mr Ciallella said.

“But ideally they’ll shift again when the money is out there in contracting.”

He said demand had remained high for professionals with some specialised skills – particularly on Legacy-style mainframe computers and in firewall security and advanced Internet development – and these people were still able to draw high-paying contracts.

On the other hand, many unemployed IT workers have received training in desktop support and HTML editing, for which there is good demand in boom times, but far less during a downturn.

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