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David Braue, Information Age

10/08/2002 17:13:29

Tight economic times and a glut of IT workers have created a buyer's market that's left thousands of Australia's tech workers out in the cold. With corporate Australia still feeling its way out of the economic malaise of the last two years, job seekers may have to compromise their standards now in anticipation of greener pastures down the road.

It's a far cry from the explosive days of IT recruitment years ago, when corporations were snapping up talent like shoppers at a closing down sale. But study after study has confirmed the bad news: hiring is down, and those who are fortunate enough to have jobs are nonetheless getting paid less.

The 2002 ACS Remuneration Survey found that IT salaries increased just 4.2 per cent last year in the private sector and 3.5 per cent in the public sector. That's even less than in the US, where Gartner subsidiary people3 recently found IT workers managed a 5.1 per cent increase despite the continuing aftershocks of the dotcom bust and a September 11-induced layoff spree.

Contractors have been hit particularly hard, with hourly rates dropping by as much as two-thirds across the board, according to some estimates. "Contractors aren't being as demanding as they were 12 months ago," says Andrew Rodger, knowledge and e-commerce manager with recruitment firm Peoplebank Australia.

"Companies are justifying a lot of their expenditure at the moment, but the money has run out on companies' new development work. We're telling our contractors they're lucky if we can get them an extension, and we're not finding a lot of rate rises on these extensions."

Declining salaries should come as little surprise given that what was a screaming deficit in IT skills a few years ago has now turned. With large corporations shedding their own staff, newly penny-wise companies have been reluctant to bring on any more staff than those that are necessary.

Partners for life?

An estimated 8000 skilled IT workers are now haunting the dole queues in Australia, with many well qualified and ready to work but simply unable to find positions that suit their skills. The Department of Employment and Workplace Relations recently dropped its count of in-demand IT skills to 12, half of the previous level.

While these results may give job hunters an idea of where they should focus their training efforts, they also reflect a slowdown in hiring and a reduction in the number of positions opened to the market. For those jobs that remain, many companies are demanding specific combinations of skills and experience that few candidates can demonstrate.

Unfortunately, there doesn't seem to be much latitude for candidates who fall even a bit short. With executive boards tightening purse strings across the board, companies simply don't have the time or budget to accommodate candidates whose skills are less than a perfect match. They need the job done quickly and well, and don't have the time or money to spend training contractors who mostly fit the bill.

Specifying more skills in their ads, according to Rodger, is also a defensive method of thinning applicant numbers now that widespread unemployment has pushed up the volume of workers applying for any given position.

While recruitment companies may do their best to convince employers to look beyond technical qualifications to pick the best candidate, Hugh Evans, principal consultant with Howth Technologies in Melbourne, concedes recruiters face their own pressures in the wake of an "incredible contraction" in the IT market.

"It's a buyers' market, and what a recruiter has to do to compete is to hit the target, with a very low degree of tolerance, on a consistent basis," Evans says. "All it takes is for a client to lose faith in the recruiter's capability to discern what the key deliverables are on any given project, and they may look elsewhere. So recruiters need to be extremely confident in the proposition they have with a particular candidate."

In what might be a small consolation to frustrated job seekers, many recruitment companies report a levelling off or even slight increases in the number of jobs into which they're placing candidates. Howth saw 50 per cent month on month growth last quarter, although Evans concedes the company's relatively small size may dilute the importance of such results.

For recruiters, anecdotal evidence and boardroom murmurings suggest that the worst is behind us: many companies are once again beginning to consider their long-term IT strategies, and may slowly resume their intake of skilled workers. But with the tables now well and truly turned, every job seeker will need to take some time to reassess their career paths - both in terms of their skills, and the direction they expect their careers will head.

That's a particularly sobering reality for new university graduates, many of whom entered IT-related courses three years ago after listening to the IT industry's exhortations about the need to fill the skills gap. Now graduates, they've entered a much different jobs market with few definite prospects. Skilled contractors are the first to snap up the high-paying positions that graduates had been led to expect, and few companies can afford the tolerance to hire graduates without the business and technical acumen they need.

Looking to higher ed

The industry's demand for hands-on experience has led many recruiters to wonder why universities aren't teaching undergraduates more of the hard skills necessary to secure a job in today's working environment.

That's not really the point, argues Professor Peter Eades, head of the University of Sydney's School of IT, which has seen enrolments double over the past four years - to around 1200 - as a flood of students chased the dotcom dream.

"We're not teaching people for their first or second job," he says. "We're in the game of education for fundamental skills. If we did teach them skills that were not going to be relevant after two years, we would be worried about the job market. But we're teaching them skills that will be relevant in 20 years; the idea is to educate them in fundamentals and give them lots of practice in whatever the current methodology is."

Recognising that graduates increase their value to potential employers by getting on-the-job experience, many university programs now include formal requirements that students complete an internship with an industry partner. Such an approach benefits both the student and the company, which can count on the programs as a steady flow of short-term and inexpensive labour to help with the grunt work in their IT plans.

Yet with corporate purse strings pulled so tight, Eades concedes it's not as easy to find appropriate businesses for students: "Especially when the industry is down, as at the moment, it's a little bit difficult because they're worried about their own business plans," he admits. "I think there will be some uncertainty in the next set of graduates."

Such measured responses hide a deeper problem that angers recruitment specialists like David Little, general manager of Icon Training & Reskilling, a division of Icon Recruitment tasked with helping workers upskill to improve their employment prospects. Little sees the current situation as more of a "skills imbalance" and believes universities need to shed their ivory-tower image to address the real problems in today's labour market.

"Many people thought they could get their paper, go to a client and be set forever," he explains. "But certification does not always mean [workers have] an objective delivery of the skills. Unless they've practised it for a while, how can employers be sure they can deliver in a real situation? Degrees have to be much more modularised and allow for more practical delivery. The rest of the world has had change, so why can't the universities?"

This isn't the first time there have been debates over the proper relationship of universities and the business community. IT academics argue that their programs turn out far more appealing candidates by giving them a good grounding in soft skills that pave the way for graduates to pick up new skills under their own initiative.

"We'd like to think our use by date is a bit longer than that of training institutions," says David Kelly, a senior lecturer within RMIT University's School of Business Information Technology and coordinator of the university's undergraduate Bachelor of Business (Business Information Systems) degree. "We hope to produce graduates who can quickly assimilate a wide variety of packages. As they progress through the degree, we put more pressure on them to learn for themselves."

Every year, Kelly's program graduates around 75 overseas students with degrees and injects another 75 qualified business technologists into the Australian market. They do offer a difference compared with conventional computer science graduates, however: by following a strict regimen of courses that includes business subjects like accounting and statistics, they offer more value to prospective employers than simply acting as code monkeys.

Participants in the course must complete a year of on-the-job training with a corporate partner, who regularly liaises with degree coordinators to report on how the students are doing. This provides a feedback loop that allows the university to continually adjust its course to ensure students are meeting employers' requirements.

In theory, that should mean that business-focused courses are producing more appealing candidates than tech-only degrees, but Kelly says it's hard to track what happens to graduates once they leave the course. "Anecdotally, I'd say that if a student was having trouble getting a job they'd probably contact us," he says. "We very rarely hear from them."

Soft skills still soft

Kelly's experience confirms what recruiters unanimously agree: IT-skilled candidates are even more appealing to employers if they've got business skills to match. This is where experienced contractors have a leg up on their younger competitors, since their past assignments will have exposed them to the nuances of specific industries. And you simply can't buy industry experience through any training course.

But even then, experience is no guarantee: experience in a different industry can be just as problematic as a lack of technical skills if the employer needs someone who can hit the ground running.

While recruiters will do what they can to match candidates with jobs, many employees may have to find a job the old-fashioned way - by creating their own opportunities. So concedes Robert Collins, managing director of Candle Australia Limited, who sees workers' difficulties in securing continuous work as "a tragedy. My advice to those people is to do anything to get yourself into a job aligned with the kind of job you'd like to have. Don't wait for the advertisement. Employers will engage staff that show entrepreneurialism, so be persistent in trying to find opportunities."

For graduates who thought their university or TAFE was supposed to give them the hard skills that would make them qualified for work in IT, the prospect of clawing their way from the bottom of the heap may well be unthinkable. Work in a call centre, restaurant or similar may be far from the glamour careers that were sold to workers in the early days, yet serving burgers with a smile can teach a lot about good customer service, quality control, effective speaking, and more.

Such soft skills, many recruiters believe, can make candidates more attractive to employers by demonstrating their capacity to move into leadership roles down the track.

More attractive, that is, once businesses get enough breathing room to turn recruiting into more than an exercise in skill matching. For customer service skills, like assertions of business acumen, are difficult to measure in any quick and meaningful way. Many recruiters offer psychometric assessment or proprietary tools for assessing soft skills, but there's a world of difference between offering them and getting businesses to acknowledge them.

Even Little - who describes ICON's DNA methodology as "a holistic approach to objectively measuring and benchmarking clients on soft and business skills" - concedes now may not be the best time to convince companies to start looking at contractors' inner beauty.

"Clients know they want a lot of soft skills, but they don't screen for them," Little explains. "We have to look at the economic equation of getting someone with a technical skill who doesn't suit the company culture. The majority of roles are not that technical. What companies want and what they need are two different things, and the onus is on people like myself to better sell the concept of the holistic fit by giving CEOs better ROI models."