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Cover story: Fewer ACS members out of work

Peter Hind, Information Age

20/04/2005 08:09:48

Throughout 2004 the evidence seemed to show that jobs in the local ICT industry were picking up: recruitment agencies reported an increase in available positions to fill, and the Olivier Index, which monitors ICT job vacancies advertised on the Internet, showed a steady growth in demand for ICT professionals.

Research by IDC Australia revealed a growth in ICT investment levels in local organisations as a percentage of turnover.

What though were the experiences of workers at the coalface of the industry?

Last December, for the third year running, the ACS conducted its annual employment survey among its members. The aim of the survey was to enable the Society to track, statistically, trends over time in local ICT employment.

By collecting these data the ACS can analyse the responses to draw conclusions to some of the questions asked. Moreover, these answers also highlight priorities where the ACS can gain the maximum advantage for its members through concentrating its energies and resources.

Furthermore, the data will help underpin any arguments that the ACS makes when it is lobbying governments and business, and developing policies.

The results from the 2004 survey have recently been collated and this article summarises the trends in local ICT employment in the 15 months since the 2003 survey.

ICT unemployment levels The first thing to report is that there has been a significant reduction in the numbers of ACS members reporting they are unemployed. In the 2003 study this figure stood at 10.3 per cent. This has now fallen to 7.2 per cent. This represents a fall of 3.1 percentage points in the ICT unemployment rate in the period between surveys.

Interestingly, this fall is much more pronounced than in the national unemployment rate as a whole. Australian Bureau of Statistics figures show that between October 2003 and December 2004 the national unemployment rate went down from 5.7 per cent to 5.1 per cent, a fall of 0.6 of a percentage point .

Nevertheless, the ACS survey still shows that the rate of ICT unemployment is currently 42 per cent higher than the national unemployment average. Last year it was 81 per cent higher and in 2002 it was slightly more than double.

However, as in past years, there are still sectors within ICT where there are pockets of high unemployment. In 2003 this was among new graduates. This year the challenge seems to be in different states, especially Victoria and in South Australia.

In fact, the highest level of unemployment in the survey responses was reported from the combined group of Victorian and Tasmanian respondents. This stood at 11.3 per cent though this represented a decline from last year when this figure was 12.3 per cent and from 2002 when this was 13.6 per cent. Among South Australian respondents 10.3 per cent reported they were unemployed. This, though, may represent an even bigger concern as it continues a trend evident over the last three surveys of a growth in unemployment levels among ICT professionals in that state.

In 2002, 7.3 per cent of these respondents reported they were unemployed, significantly below the survey average for that year. In 2003 this had grown to 8.6 per cent, still below the average for the survey as a whole. However, this year the figure is significantly above the ICT average.

Another thing that needs to be pointed out is that for the first time the survey distinguished between those who were students and not looking for work and those who were students and looking for work; 3.1 per cent reported their status as students but looking for work.

These responses were excluded from the unemployed ratios of the survey results.

The rationale was that the type of work they might be seeking could, perhaps, be as a part-time worker in the hospitality industry to finance their studies rather than as a professional in ICT directly.

Nevertheless, their existence should be recognised and they could well indicate an undercurrent of ICT unemployment that is masked by the respondent's student status.

The questionnaire also asked respondents to specify in months how long they have been under- and unemployed in the last five years. The aim was to track whether this time has been growing or falling.

In the latest study there was a slight increase in the numbers who said they had never been unemployed. This went up from 53.8 per cent in 2003 to 56.4 per cent in 2004. However, the time spent either under or unemployed in the last five years, as an average, has also been steadily dropping over the last three years.

In 2002, respondents reported that they had spent on average around 14 months under or unemployed over the last 5 years. In 2003 this average had dropped to just over a year. Today it is around 7.5 months.

However, this year, at the suggestion of Access Economics, the ACS also questioned for under employment periods and unemployment periods separately. The average for under-employment was just over 9.5 months. The working week Since its inception in 2002, the ACS Employment Survey has explored the employment status of respondents as well as both their current working week and what they envisage as their ideal working week.

The rationale has been a desire not only to understand trends in ICT employment but also to gain insights among ICT professionals into what the Prime Minister has described as "the barbeque stopper", namely the challenge many workers express in getting balance between their work and family responsibilities.

Fewer contractors The survey does not support any argument of an increasing "casualisation" in the employment status of ICT people. In 2002 just under 61 per cent of replies indicated their employment status as full-time salaried staff. Over the last two surveys this has grown steadily and now represents nearly 68 per cent of respondents.

Conversely, in 2002 just under 4 per cent of those responding identified themselves as part-time salaried staff while another 8.8 per cent said they were hourly contract employees. By 2004 these figures had fallen to nearly 3 per cent who specified themselves as part-time salaried and 8.3 per cent who said they were contractors.

Elsewhere in the survey the results reveal a growth in the number stating they are working 30 hours or more per week. In 2002 nearly 80 per cent of replies fitted into this category. In 2003 this had risen to 81.3 per cent of respondents while in the 2004 study this figure had increased to 83.6 per cent.

Much of this growth is the result of an increase in the number of ICT employees working an average 40 to 49 hour working week. This grew from 41.7 per cent in the 2003 study to 47.8 per cent in 2004. On the other hand there was a decline in the numbers working, on average, a 30 to 39 hour week from 24.3 per cent to 21.3 per cent over the same period.

Nevertheless, it would be wrong to conclude that people were unhappy with any trend towards a longer working week: in fact the opposite seems to be the case. The 2004 findings show another increase in the percentage of respondents who express satisfaction with the length of their working week. In 2002 31.2 per cent of survey participants nominated the length of their existing working week as their ideal. This increased in the 2003 survey to 33.8 per cent. In 2004 this figure had risen again to 38.3 per cent.

Given these figures it could be concluded that, by and large, ICT professionals appear to be getting a better balance between their working and personal lives.

Job skills Another examination of changes in ICT unemployment levels between 2002 and 2004 can be made through the aspect of job positions. Last year there was a significant fall from the 2002 results in the percentage of those unemployed identifying their main skill sets as being either business analysts or programmers.

In contrast, unemployment among project managers was almost static in the same timeframe. The author concluded then that this might reflect that the development activity was happening prior to the systems roll-out and that we may expect to see an upturn in the employment prospects for project managers in the 2004 study.

This seems to have been borne out. The percentage of those unemployed who gave their main ICT job responsibility as project managers dropped from 19.6 per cent in 2003 to 8.9 per cent in the latest employment study. However, while these systems are now being implemented it seems that there has been a stall in the level of fresh development activity.

This is reflected in an increase in the percentage of the ICT unemployed who state their main job responsibility is programming or business analysts. The former group made up nearly 18 per cent of the survey unemployed in 2003. Today they represent 22.2 per cent of this total.

But the figures are even more striking among the latter category: business analysts equated to only 5.4 per cent of the ICT unemployment in 2003. In the 2004 survey they made up 17.8 per cent.

This might well be the most worrying statistic from the latest employment survey. It might well reflect the fact that the local ICT industry is condemned to several more years focusing on operational effectiveness rather than being allowed to investigate how it might be able to enhance the business with new systems and technology.

A final look at local ICT unemployment can be made through examining it via the industry experience of those who are out of work. In the 2002 survey there was a higher than average representation in the unemployed among those who had spent most of their working lives in either the public sector, or in the financial arena or else in consulting.

In 2003 there was a dramatic drop in the numbers of people with public sector experience reporting they were without work. However, in 2003 there was growth in the percentage of unemployed respondents with predominantly finance sector experience. Furthermore, those with consulting industry experience were still over-represented among the ICT jobless.

These trends were continued in this year's results. However, the noticeable growth area in ICT unemployment was in those who specified that they had spent most of their working life in the education and R&D sectors. In 2002 these people made up 4.4 per cent of the survey unemployed. Today they comprise 11.1 per cent of the ICT unemployed.

Attitudes to training Besides looking at employment and life style trends the ACS also appreciated that it needed to explore the issue of ICT worker adaptability. The ICT industry is characterised by a plethora of new products. Were people unemployed because they had refused to recognise that they needed to re-equip themselves with fresh skill sets to support the latest waves of technology?

Alternatively, are there barriers that stand in the way of industry practitioners widening their knowledge base?

Interestingly, after the recorded growth between the 2002 and 2003 surveys in the number of ICT professionals undertaking training there was a sizeable number of respondents to the 2004 study who stated they had done no training in the past 12 months. The questionnaire has a wide definition of training and includes ICT-related courses, business training and personal development.

It is surprising that over 10 per cent of respondents felt none of this was important for them.

This might be dismissed as a reflection of the fact that a large proportion of respondents, over 22 per cent, were under 30 years old. However, while people in this age range may be reluctant to take further ICT-related study it, would be surprising if they were not able to enhance their careers prospects by undertaking greater business-related training.

Don't know, won't learn Disappointingly, those classifying themselves as unemployed also showed a reduced enthusiasm for undertaking further training: 15.6 per cent of such people stated they had undertaken no training in the past 12 months. In particular, there was a marked drop between the 2003 and 2004 surveys in the number of such respondents who reported they had undertaken business-related training (down 15.3 percentage points) and personal development courses (down 12.5 percentage points).

Clearly, one of the few compensations with being unemployed is that people are more likely to have time available to participate in further education. Such activity will embellish a resume and impress a potential employer with a get-up-and-go attitude. Why then has there been a reduction in the number of ICT unemployed who are undergoing training? The study examines what people see as the major obstacles that hinder their ability to do training.

The dominant survey responses to this question in the 2004 survey are very much in line with results from past years. They are: sparing the time to do these courses (38.7 per cent); the cost of these courses (almost 33 per cent) and doubts they will enhance the respondent's employability (over 18 per cent).

However, there were some striking differences between the 2004 responses as a whole and replies from the unemployed category. Nearly 58 per cent of the unemployed gave cost as the major barrier preventing them from doing further training. Time, though, is not seen as an issue as this was nominated by only 4.4 per cent of unemployed respondents, but 22 per cent, compared with 2.6 per cent for the survey as a whole, stated they had difficulty finding out that the courses were available.

There was also a marked increase in the number of unemployed respondents who said they had doubts training would boost their employment prospects, (33.3 per cent compared to 18.2 per cent).

For the second year running the most favoured source for ICT training among respondents was that provided by conferences and seminars: 29.8 per cent of replies indicated that this was their preferred means of learning, up from 28.0 per cent in 2003 and 25.7 per cent in 2002.

The author suspects this may reflect an increasingly time-poor world where people want succinct and snappy insights rather than deep understanding.

This is, perhaps, supported by the slight decline in those nominating tertiary courses as their preferred method for skills development. Almost a quarter of replies identified vendors as the best source of ICT training. As such, they are still clearly seen by ICT professionals as an important training avenue.

However, the figure for them has fallen for the second year running and ICT suppliers need to reflect on how they can best engage industry practitioners in learning about their products and services.

Finding a job With their enhanced skill sets how do ICT professionals go about finding new employment opportunities and what are the challenges they have had to address in job interviews? The employment survey examines what ACS members regard as the best source of new ICT positions. It also asks respondents views of recruitment agencies and whether they have experienced any form of discrimination when they have applied for a new job.

Increasingly the Internet is seen as the best source of new ICT positions. In the first year of the survey most respondents selected word of mouth networking. While around 35 per cent of replies in each of the three surveys nominated this option, respondents choosing the Internet have grown from 32.7 per cent in 2002 to 45.0 per cent in 2004.

It would appear that much of this growth has been at the expense of newspapers. In 2002 19.3 per cent regarded these as the place to look when seeking a new job. Today only 7.9 per cent are so positive towards them.

Interestingly, these selections differ markedly depending on the age of the respondents. In 2004 56.8 per cent of respondents aged 35 or under identified the Internet as the best place to look for jobs. Only 37.1 per cent of those over 50 selected the Internet.

Instead they preferred word of mouth networking: 38.4 per cent of this age group marked this option compared with 27.2 per cent of respondents under 35. This is perhaps understandable; the longer someone works in the ICT industry, the wider their network of contacts is likely to become.

One area where everyone in the industry seems of equal opinion, regardless of age, is the view of recruitment and employment agencies: 10 per cent believe these organisations are the best place to turn when looking for a new job. This response rate is more or less consistent across the age groupings of respondents.

Recruiters gain some favour As mentioned in the summary to the 2003 survey, this low appreciation by ACS members of these organisations as a source of potential jobs is in stark contrast to local findings by the research organisation IDC Australia. Its annual Forecast for Management survey revealed that 39.5 per cent of local IT managers use such agencies as their preferred method of obtaining new recruits. This compares with only 7.8 per cent who prefer the Internet.

However, since in effect these agencies could well be gatekeepers to new positions, the ACS employment survey asks respondents to classify their experiences with them on a five point scale ranging from excellent to abysmal.

This year there was some encouragement in the replies for those working in recruitment. Those identifying their dealings with employment agencies as "excellent" or "good" grew from 17.9 per cent in the 2003 survey to 22.1 per cent this year. There was also a continuing decline in those regarding their experiences with such companies as either "poor" or "abysmal".

This has dropped from 40.4 per cent in the 2002 study, to 39.6 per cent in 2003 and 38.8 in 2004. These results seem to highlight a modest, but encouraging, growth in the professionalism of the ICT recruitment industry.

Age, ethnic prejudice Another undercurrent among work-seekers is the issue of discrimination against applicants. The ACS employment survey enquires whether job candidates have ever experienced any prejudice against them in terms of their gender, age or ethnicity. 58.3 per cent of survey respondents reported they had never encountered any discrimination, a slight decline on the findings from the 2003 study. However, when they did the most likely cause was discrimination against their age. This was encountered by 28 per cent of survey respondents.

Regrettably, these figures change when the results are filtered by the age of the respondents. There is a significant increase among older ICT professionals, those over 50, who report they have encountered discrimination against their age. This figure rose to 42.8 per cent. Another disturbing trend in this year's results was a strikingly large number of unemployed respondents who reported they had encountered discrimination against their race and ethnicity.

In the overall responses to the 2004 survey this figure was 7.7 per cent. However, among those identifying themselves as unemployed this figure grew to 21.2 per cent.

On the road to recovery By any analysis, a 3.1 percentage point survey drop (from 10.1 to 7.01 per cent) in those reporting to the ACS that they are unemployed is good news. The results support evidence from the recruitment sector that things are picking up and it seems clear that the ICT industry is getting back to health.

One of the most encouraging findings from the 2004 survey is the marked decline in unemployment levels among those aged under 35. All three of the age groupings in this category reported ICT unemployment levels below the survey average. In fact, in the under 25 category, the unemployment levels at 4.2 per cent were the lowest across all age ranges. This is clearly a good sign for the future health of the industry.

After the industry malaise of the first years of this century an upturn of this nature will come as some relief to those in ICT. However, the author believes it would be wrong to let this positive news mask the fact that there are still some areas of concern in this year's results.

ICT unemployment in Victoria is well above average and it has grown each year since 2002 in South Australia. If governments in both these states want the ICT sector to be an important contributor to their local economy, then they need to think about what they can do to give the industry, and the local ICT professionals in it, some boost.

The other area where there may be some long-term concern is the increasing percentage of the ICT unemployed from a programming or business analyst background. These people represent the creative edge of ICT.

If their capabilities are not being adequately utilised this may well reflect the fact that Australian business sees IT largely in terms of operational effectiveness. This attitude could well stifle ICT initiative among local practitioners and this could serve to hamper future industry progress.

However, at this stage these concerns are a long way off. The 2004 survey results coincide with the re-election of the Howard government to its fourth term. After July 2005 it will have a strong mandate for its policies in both parliamentary houses.

As such, this survey puts an important stake in the local ICT ground. How will the policies undertaken by the Federal Government in the years ahead influence the buoyancy of the Australian ICT market? Certainly, we shall be able to contrast the encouraging situation today with where we are when the next Federal election is called.