The IT sector has been hit by a number of high profile job losses in the past few months. High profile closures such as that of Gateway together with development and expansion postponements, such as Intel’s Fab 24 project, have all affected the recruitment market in one way or another.
The tables have turned – what once was a job seekers market has changed to a recruitment buyers market.
The desire to keep costs down in an increasingly competitive industry has meant a cut-back on hiring. With an increased number of workers competing for what’s there, the time-honoured principle of supply and demand applies. At present, supply is exceeding demand; IT courses are churning out graduates who joined the courses at the height of the dot com boom, when the phrase ‘skills shortage’ was causing concern in the industry.
But despite the downturn, there are some firms that are still recruiting. Oracle currently has 50 vacancies to fill and is expected to need approximately 200 more workers in the coming months. Sap Support Service Centre Ireland, Microsoft, IBM and Compaq have also been recruiting staff.
There are numerous reasons for this situation: for some companies, a shift in business focus has created the need for additional staff; others have been preparing for a downturn and began cutting costs a couple of years ago.
In the current climate, some may expect the new job opportunities to be contract positions that can be easily shed if additional cost-cutting is required to keep the business profitable. However, it appears that many are permanent, full-time posts.
‘Employees need to build up significant in-depth knowledge on a broad range of SAP Industry Solutions. This can only be accomplished by everyone taking a long-term view,’ explains Liam Ryan, Managing Director of Sap Support Service Centre Ireland.
At some levels, employers now have a wide range of skilled candidates to choose from. ‘It’s also easier to get an “exact fit” for the job, due to an abundance of CVs,’ says Liam Ryan. ‘There are no disadvantages to recruiting at the moment.’ Attrition rates have also decreased.
However, there is still a demand for skilled candidates, particularly at the higher technical skill level. Recruiting internally has also created some vacancies at lower levels; existing staff are trained for a higher skilled job, leaving their previous position open.
According to IBM’s Recruitment Manager, Larry Swan, the company advertises every vacancy internally first. After two weeks, if the best person for the job cannot be recruited from existing staff, the vacancy is advertised externally.
Training is still an issue for employers, and with attrition rates reduced, the companies may find they are getting a better return on their investments. Along with internal courses, IBM offers tuition refunds to enhance its workers’ training.
While these new jobs may seem to be an indication the market is slowly recovering, Seamus Byrne points out that not all the jobs in Oracle have been created by growth. While some may be growth led, part of the recruitment drive is to replace people.
Static salaries
There have been additional repercussions for employees. According to NewMediaCV, salaries are generally static and very high earners may have to lower their salary expectations. In general, employers are no longer having to constantly increase salary offers to win staff and have regained control.
Although some companies may choose to use the current economic climate as an excuse to lower wage costs, this is not the norm, and most companies are offering packages in line with published salary reports.
Catherine Lambe, Head of Human Resources at Compaq, points out that to attract the highly skilled workers, companies have to offer attractive packages and competitive rates. If companies try to take advantage of the situation by offering a reduced package, the candidate will simply go to a company that is offering the market rate for the work. Businesses are looking at the long-term effects of hiring staff and are looking to attract staff who will drive business.
Alan Townsend, Managing Director of Monster.ie, says that companies are recognising the overall picture. ‘Nearly all companies are recruiters – they still need certain skills,’ he says. Losing good people now could lead to difficulty in growing the business in the next five to ten years.
Lower performing candidates may also find themselves ‘recycled’, as employers can now replace them with someone more productive.
The lay of the land
The instability in the market is manifesting itself in many ways. The business world may have re-evaluated its attitude towards start-up technology firms, but job seekers are also changing their focus. Instead of seeking opportunities in a fast-growing start-up company, many are now choosing to go for more stable prospects, according to NewMediaCV. Stock options are also less attractive.
Employers may also have to re-evaluate their approach to recruitment. A recent report by IDC consultants revealed that firms may be weakened by a recession if they do not adapt their recruitment practices to the market trend.
There are some things companies can do to change their approach to recruitment. Keeping CVs on file is something a lot of companies claim to do in the numerous rejection letters sent out to job applicants. However, some companies may receive thousands of CVs over the course of time and keeping track of these to find suitable candidates when opportunities arises may seem a daunting task.
By encouraging potential applicants to submit CVs via its website, Oracle has built up an extensive database that its Human Resources Manager, Seamus Byrne, says will be examined for suitable candidates should vacancies arise.
E-recruitment is becoming more popular – employment Website Monster.ie reported a record number of visitors to its site in January. Alan Townsend, believes the Internet offers those who want to move outside Dublin the opportunity to explore those options.
Foreign workers may also be attracted through the Internet. While companies may prefer to hire locally, there is still a need for some skills, such as fluency in certain languages, that may not be as widely available on the Irish recruitment market. The need for foreign workers has decreased though – making life easier for IBM’s recruitment officers, says Larry Swan. In the past, the company has travelled to South Africa and India to recruit workers.
Hardest hit
NewMediaCV’s salary report identified graduates as one of the hardest hit sectors in the current downturn, along with marketing, ‘front-end’ specialist content staff, top-range software developers and contractors, and senior management.
While there are still opportunities for graduates in the market, it makes sense that in a recession, companies want the best and most experienced workers. This is a commodity some graduates lack. Although they have the qualifications, whether they can put the training to use or not is something that has to be explored.
According to Alan Townsend, graduates now have to sell themselves to companies, instead of sitting back and waiting for high-paid positions. They may also have to start a slightly lower level than they had anticipated.
Graduate training programmes are often a way into companies for those just out of college, but not all companies offer them.
In Ireland, Oracle has six different divisions. None is large enough to support a graduate training programme, so Oracle has no dedicated graduate training programme. At present, Oracle is mainly searching for candidates with a couple of years experience behind them.
However, Compaq employs graduates at a trainee level, and Catherine Lambe says that once the placement is finished, many stay on with the company.
Glimmer of hope
There is some good news for job seekers. The current downturn in recruitment is not expected to be a long-term trend. NewMediaCV has speculated that perhaps by the end of this year, there may be an increase in demand for all types of employees. In fact, research by IDC shows the IT market in Europe may increase if the economy picks up, potentially leading to growth of some 5.5 percent.
The same research shows that the most resilient sector of the market is IT services, not least in outsourcing. Dot com job losses are also falling, and in Australia, the IT industry is reportedly experiencing a revival.
However, in the short term we are unlikely to see a return to heyday 1998 – 2000 employment levels in all sectors of the IT market.
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