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Overview

The figures for the last quarter of 2009 indicate that the improvement in IT recruitment first seen in the third quarter 2009 is continuing to gain some momentum. The number of vacancies advertised went up by 1.9% between the two quarters. From 65,723 jobs to 66,983. However as we have mentioned in previous surveys this slight upturn needs to be treated with some caution as the number of vacancies are down by some 9.8% compared with the start of 2009 and have more than halved since the heady days of the last quarter 2007. Historically recruitment consultancies have dominated IT recruitment. The very first issue of this survey some twenty two years ago showed that 72% of all advertising was through consultancies. This increased to 84% by the end of the 1990,s when advertising was still predominantly magazine/press based. By the end of this decade the proportion has risen to over 87%, virtually all of it web based. However advertising by consultants depends on volume. During the latest quarter 4,256 consultancies advertised jobs compared with 2,515 companies advertising directly. There are now 27% fewer consultancies advertising since this time last year. This contrasts with just 9% fewer companies advertising.

Although pay restraint has been the order of the day in many organisations there does seem to be some indication that this is moving into positive territory. Salaries for most of the past eighteen months have been in decline. The latest quarter shows this may have bottomed with advertised pay up by 0.1% compared with a year ago and by 0.9% since the previous quarter. There are however wide variations to this depending on location, business type and the required software skills.

During the second quarter 2009 contract recruitment showed a big quarterly hike of 27% in vacancies. At the time we reported that this was due to an over-reaction in the market during the first two quarters of 2009. This seems probable in that the jobs on offer are down this quarter by 6% compared with the previous quarter. Even so compared with the second quarter 2009 jobs are up by 18%.

Skills Summary

The top skills in demand have shown little change since the previous quarter, with the top nine skills remaining the same. Linux crept into the top ten for the first time. In the meantime Unix slipped further down the table to occupy seventeenth place. SQL remained the skill most in demand with jobs up by 0.9% quarter on quarter. Elsewhere the top ten skills of C#, .Net, SQL server and ASP have more jobs on offer. Only C, Javascript and HTML has seen demand fall off.

Contractors have inevitably seen jobs on offer going down since the previous quarter. Within the top ten just two skills have gained ground with C# jobs up by 8.1% and .Net by 0.9%p on the previous quarter. Other skills such as the SQL, C, Java, Oracle, SQL server, SAP and Unix are all down.

Regional Summary

This quarter’s figures continue to highlight the North/South split in the distribution of IT jobs. During this quarter London and the South, combined with the M4 corridor to the West, attracted 72% of all IT jobs being advertised. This is up from the 70% recorded in the previous quarter. London now represents 35.2% of these jobs, up from 34.3% quarter on quarter. Total London recruitment is up by 1.4% and the South by 0.3%. This compares with jobs down by 3.9% in the Midlands, by 4.0% in the North West, by 5.5% in the North East and by 10.6% in Scotland.

In line with their permanent colleagues contract staff jobs in the South suffered the least with jobs in London and the South down by 3.9%, but in Northern regions and Scotland by 10.7%. The worst affected region is again Scotland down by 18.7%, followed by the West Midlands down by 18.1%.

Industry Summary

For much of the past ten years Software Houses and Finance have been the biggest employers of IT staff. This has over the past two years moved more towards Software houses as financial organisations cut back on recruitment and outsourced large parts of their operations. The position now is that Software houses account for 59.7% of IT recruitment and Finance 21.2%. Four years ago the equivalent figures were 33.3% for Software houses and 43.4% for Finance. Quarter on quarter jobs in these sectors are up by 2.1% and 1.2% respectively. Demand however is down in all other sectors.

Contract demand within business sectors shows a somewhat different profile to permanent recruitment. Here Software houses make up 42.9% of the market and Finance 31.9% Quarter on quarter all sectors have seen job counts going down. However when compared with the second quarter 2009 jobs in Software houses and Finance are both up.

Management

Having seen management vacancies go down for most of the past two years this quarter is now showing job offers stabilising. Compared with the previous quarter the number of jobs remained virtually the same with a slight increase of 0.3%. From 4,024 jobs to 4,037. Whilst this is good news for Helpdesk Managers and Technical Support Managers where jobs are up by 16.3% and 13.6%, it is not the same story for the most advertised job of Systems Development Manager where the number of job advertisements is down by 10.3%. Other functions see demand for Computer Services Managers down by 10.3%, but Software Managers and Communication Managers up by 6.1% and 7.6%.

The pay offers being made for managers is slightly above that seen twelve months ago, with just a 0.7% increase being recorded. Quarter on quarter the trend in quoted salaries is more positive with advertised pay up by 1.1%. The increases are pretty much across the board with System Development Managers benefiting with a 1.8% increase since a year ago.

System design, business analysts & project management

The number of advertised jobs this quarter is up by 4.5% compared with the previous quarter. From 11,730 jobs to 12,259. Increase in demand is being seen for Senior Business Analysts by 15.6%, Business Analysts by 8.8% and Management Consultants by 10.0%. Project Managers represent the largest job function in this group and here the number of jobs is up by 8.2%, from 2,706 to 2,929 jobs. The only jobs to see reduced demand are Systems Auditors down 12.4% and Test Analysts down by 5.5%. The top skill requested for Project Managers this quarter is Prince followed by SQL, .Net, C, SQL Server & CRM. Salaries across all job functions in this group are down on average by 0.5% since last year, but showing signs of improvement with a 2.3% increase since last quarter.

Contract vacancies slowed down during this quarter with vacancies down by 5.8% quarter on quarter. This follows a big increase in the previous quarter. Since the start of 2009 jobs have increased by 6.8%. The key job of Project Manager has seen vacancies down by 3.8% quarter on quarter but up by 11.2% compared with the second quarter 2009.

System development & programming

This benchmark group of jobs represents over 39% of all jobs advertised and as such is a key indicator of what is happening within IT recruitment. This quarter showed the number of jobs increasing by 3.9% compared with the previous quarter. Up from 25,939 jobs to 26,952. The prime job of Systems Developer saw jobs increasing by 5.1%. Up from 19,291 jobs to 20,284. The main employer of developers continues to be software houses and financial organisations. These two sectors account for over 80% of all IT development staff recruitment. However it is noticeable that graduate recruitment of IT developers has tumbled by 4.3% quarter on quarter The downward pressure on salaries in this group continues with salaries stagnating at virtually the same levels as the previous quarter. Compared with a year ago advertised pay for developers is actually down by 0.7%. Pay can vary considerably dependent on the region, industry sector and software skill. Developers in London are seeing salaries that average £45,339, whilst those in the North East are looking at £33,664, down by 3.7% since the previous quarter. Senior Developers are seeing offers averaging £51,769 nationally, whilst a similar grade in manufacturing in the North West averages £35,349. This highlights the large variation in salaries dependent on location and business type. Further variations are also dependent on the software skills being requested. At present the top skills in demand for developers are SQL, C, C#, .ASP, .NET, SQL Server and Java.

The demand for developers continued to be healthy with job counts down by only 0.2% since the previous quarter. Rates are starting to reflect a more buoyant market with national rates up from £46/hour to £48/hour. This average varies somewhat from £56/hour in Inner London to £38/hour in the North East. Software skills most in demand are SQL, C, C#, Java and .NET.

PC Support

Jobs for permanent PC support staff this quarter were up by 5.4% against the previous quarter, up from 3,776 jobs to 3,980. The biggest quarterly increase of over 15% was for Senior Help Desk Analysts, followed by Help Desk Support up by 7.5%. The leading job function of PC Support Analyst also so demand increase, with 5.7% more jobs advertised since the previous quarter. Average salary levels for support job roles are up by 0.3% against a year ago, but are down quarter on quarter by 1.7%. Top skills required are for SQL, Office, SQL Server, Access and Exchange.

Compared with other job groups the demand for contract PC support is holding up well with 0.5% more vacancies available since the previous quarter, the only contract group to show any positive growth this quarter. Top software skills required are for Office, Windows XP, Exchange and SQL.

Technical support

For the seventh consecutive quarter the number of jobs in this group fell. This time by 1.0% compared with the previous quarter. Down from 9,330 jobs to 9,235. System Administrators make up 43% of jobs in this group followed by Technical Architects making up 25%. Whilst quarter on quarter jobs for Administrators are down by 6.7%, jobs for Architects are up by 5.9%. Administrator recruitment in London is down by 5.4% and in finance by 10.4%. This is a considerable improvement on the previous quarter when demand from the finance sector was down 20%. One bright spot is that for the first time in two years recruitment for Technical Architects is up by 5.9% and for Technical Pre-Post Sales by 1.5%. Over 61% of all jobs advertised for Administrators require skills in Linux, Unix, SQL or Solaris. Having made rapid inroads over the past two years Linux has now firmly established itself as the main platform, with 10% more jobs advertised than for Unix. Salaries for the group are showing some resilience with pay offers in advertisements showing a 1.7% increase since last quarter, but still down on a year ago by 0.4%. National salaries for administrators now average £36,677 up by 1.6% on the quarter. Equivalent figures show that Senior Administrators with substantial experience now average £49,275 up by 3.5%.

Jobs for contractors this quarter followed the overall trend with jobs down by 16.3%. From 2,071 jobs to 1,733. However since the second quarter 2009 jobs are up by 3.9%. Rates for the group as a whole have remained the same as a year ago, but with some variations. System Architects have seen advertised pay down by 3.4% on a year ago, whilst administrators offers are up by 5.3%. Average rates for administrators are now £40/hour. Skills required are for Unix, Linux, SQL and Solaris.

Software engineering

The number of jobs for software & test engineers increased by 0.9% compared with the previous quarter. Up from 3,953 jobs to 4,003. The first increase for almost two years. However vacancies for the main job function of Software Engineer are down by 2.1%, whilst jobs for Test Engineers are up by 4.7%. Salaries on offer compared with a year ago are up by 0.1%, but down quarter on quarter by 2.1%. Software Engineers are now being offered average salaries of £35,265, with variations of up to £49,771 for Senior Software Engineers. The top skills required are for C, C++, Embedded software, C#, .SQL and Java.

Demand for contract Software Engineers went down by 10.2% compared with the previous quarter. This had little effect on national rates, which are up from £35/hour to £36 quarter on quarter. Skills needed are for engineers with experience of C++, C, Embedded, Java and C#.

Database administration

The number of jobs advertised for Database Administrators/Analysts fell by 2.8% compared with the previous quarter, down from 2,211 jobs to 2,149. This group of jobs is intended to reflect the design and administration functions related to large-scale corporate databases. In smaller installations the responsibilities may well be covered as part of system administration or even PC Support. Average salaries for Database Administrators are down by 2.5%, compared with last year and are now being advertised at £38,206. This trend may now have come to an end with pay increasing quarter on quarter by 1.6%. Senior Database Administrator pay is down 1.4% over twelve months, but at a national average of £59,047 is still up by 6.0% quarter on quarter. Software skills being sought cover SQL, SQL Server, Oracle, Access and CRM.

Over the past quarter contract vacancies are down by 14.3%. From 754 jobs to 746. Rates associated with Database Administrators are still maintaining the same level of £42/hour as seen in the previous quarter, but are down on a year ago when rates were running at £44/hour. Top skills required are for SQL, SQL Server, Oracle and Access.

Networking & communications

For the seventh successive quarter the demand for networking jobs has fallen, this time by 14.4% compared with the previous quarter. From 2,366 jobs to 2,026. The impact on recruitment for the benchmark job of Network Support Engineer is somewhat less with 7.4% fewer jobs advertised this quarter. Salaries for this job role now average £30,956 nationally, with up to £42,200 for engineers with substantially more experience and expertise. The top skills being looked for are Cisco, Firewalls, Exchange and SQL.

Jobs for contract network people have continued to fall for over two years. This time round the quarterly decline has seen vacancies down by 17.1%. From 673 jobs to 558. However rates for Network Support Engineers have increased from £32/hour to 33/hour. This is still down on the £34/hour advertised a year ago. The top skills being requested are for Cisco, Firewall, Exchange and Wan’s.

Operations

This group covers operations roles that are predominantly seen in large-scale computer centres. The exception to this are Hardware Service Engineers, which covers all aspects of hardware support, including peripherals. Quarter on quarter the number of jobs advertised in this group went up by 6.8%, from 725 jobs to 774. This upturn is reflected in the pay on offer for Hardware Engineers, which has increased by 0.1% on a year ago and by 2.8% in the previous quarter. The average national salary is now £26,261, ranging from £28,892 in Inner London to £21,222 in Scotland. Top skills required are for SQL, Office, Linux and Exchange.

The number of contract jobs in this group fell by 5.8% since the previous quarter. Hardware engineers represent 73% of the jobs in this group and here jobs are down by 9.6%. Rates compared with a year ago are actually up by 1.5%. Skills required are for Windows, Office, Access, Exchange and TCP/IP.

Internet Design

The number of jobs on offer within this group went way down by 17.5% compared with the previous quarter, from 1,653 jobs to 1,364. The main job function of Web Designer accounts for 74% of the jobs advertised in the group and it is here that the decline has been most prominent. Average salaries on offer for Web Designers range from £28,750 in manufacturing to £43,513 in London within the finance sector industry. The main skills being requested are for Photoshop, Flash, HTML, Illustrator and Dreamweaver. The job functions in this group can also be associated with other design and development jobs where similar software skills are requested.

Summary

The tentative green shoots seen in the third quarter 2009 quarter continued to grow during the last quarter with the number of permanent vacancies advertised for IT jobs increasing for the second consecutive quarter. Throughout most of 2008 and 2009 sectors such as software houses and finance bore the brunt of layoffs as the financial crisis reached it’s zenith. It is clear that in some area’s this was overdone, particularly in the contract market where the discarding of staff was swift and initially deep. This resulted in an upward swing in the third quarter of 2009 followed by more subdued activity in the last quarter. However most of the fall off in contractor activity, as to be expected, occurred during December, following a very buoyant October and November. The net result of this is that those already employed in IT should be able to look forward to a more stable environment as we enter 2010.

What is encouraging is the demand for design & development staff increasing. This is particularly significant in that the number of vacancies for graduate developers is still falling. It will probably be another twelve months before we see much change in this situation, but will hopefully resolve itself as eventually a shortage of more experienced personnel starts to dry up. It is hoped that in the meantime this will not detract too much from school leavers taking up courses in IT. Compared with other countries, notably the Far East giants, the UK’s ability to produce an adequate level of high quality IT graduates is woefully inadequate.

Unfortunately the stabilisation of the market does not benefit all equally. Prospective job seekers looking for opportunities in support roles have seen a further decline in the number of vacancies available. This is an area where outsourcing has been in full swing right through this decade. This can be beneficial when the operation is kept within the UK. The recent announcement by Essex County Council to outsource most of its IT functions to IBM should result in a more cost effective service based within the UK. This is not the norm. Most outsourcing deals such as those seen by oil companies, banks and even the NHS result in jobs being exported.

The bottom line is clearly that whilst we are in recession there is no justification in companies using overseas companies to outsource their development. This is very much the case where unlimited visas seem to be granted to far eastern companies to bring designers and developers to the UK. The recruitment of home grown talent must be a priority for the government to urgently address. As the economy picks up then shortages will inevitably appear as the lack of new graduates over the next few years will probably not meet demand. Recently the government announced that the introduction of the ‘Personal Account Pension’ is to be delayed until 2013. Even this action was insufficient to stop the Great-West consortium from withdrawing their bid. Logica had already pulled out which leaves just the Tata Consultancy as the only supplier remaining. In effect the government has accepted that no UK based organisation has the skills to provide the system. It remains to be seen how many home grown developers will be used on the project and where subsequently the operation will be based.