The fourth quarter figures for 2010 show that the IT jobs market for permanent staff continued to expand between the third and the fourth quarters where there were 4.6% more jobs advertised. This is the sixth consecutive quarter that has seen higher demand, but the rate of improvement is somewhat lower than the 8.1% and 7.6% seen in the second and third quarters of 2010. However, it is worth remembering that these increases are in a market that has seen demand for IT people almost half since the start of the financial crisis.
The benchmark job function within IT is for software developers. This quarter, developers made up over 39% of all IT jobs advertised. It is also the group accounting for much of the overall increase in IT vacancies with 4.5% more jobs being advertised this quarter. Elsewhere prospects are equally as good with virtually all job types, such as support, administration and networking, seeing more job opportunities.
Traditionally contractors are the first to be discarded and the first to be engaged which makes this a strong indicator on the state of IT recruitment. Over the last quarter there has been an increase of 0.9% in the number of advertisements for freelance IT staff.
Some of the key points for the quarter:
- Demand for permanent IT jobs up by 4.6%
- Contract vacancies are up by 0.9%
- Vacancies in finance down for the first time since 2009 by 5.5%
- Vacancies in software houses/consultancies up by 8.1%
Key salary trends
Advertised permanent salaries reflected the state of current employment levels with average pay in advertisements increasing by just 1.1% compared with a year ago. This is less than the 1.3% recorded in the third quarter 2010.
However, these general figures can hide the wide variations seen in salaries dependent on the job function, region, business sector and the software skills. Nationally developers have seen advertised pay up by 4.8% over the past year. For other job functions there are 3.0% increases for project managers, 0.6% for development managers and 1.3% for network support engineers. Other support staff fared less with pay for PC support down by 0.5%.
Contract rates started to improve in the first quarter and have continued to rise throughout 2010, with median rates in the latest quarter up by 5.0% compared with 12 months ago.
Key IT skills trends
The demand for IT staff is primarily driven by the need for specialised software skills, and how these are applied by different business sectors. The Microsoft development tools of C# and .Net have seen demand continue to rise, by 2.8% and 2.9% respectively, between quarters three and four. In another role, people with experience implementing and supporting Linux are increasingly being looked for with quarterly demand up by 4.2%.
Key regional findings
The main trends in IT staffing across the various regions over the past quarter has highlighted the following:
- 75.5% of all IT permanent jobs advertised were in the Southern and Western regions of England, leaving the remaining regions of the Midlands, North and Scotland with less than 25%. A year ago the North/South split stood at 72%/28%
- In the South 2,098 more IT jobs were advertised whilst the Midlands and North managed an additional 911 jobs. Compared with the third quarter of 2010 this represents a major turnaround in the fortunes of the Midlands and North, where previously jobs were declining
- Overall the number of jobs in the London area remained unchanged between quarters three and four. However, this disguises an increase of 5.4% in Inner London and a surprising fall of 2.3% in Outer London. Compared with 12 months ago the figures for Inner and Outer London show an increase of 28.9% and 22.53% respectively
- The Northern resurgence has seen 7.8% more jobs in the North West and 3.7% more in the North East. The East Midlands sees jobs up by 5.4% and the West Midlands by 4.9%. Completing the picture jobs in Scotland are up by 2.2%
- Contract vacancies continue to show a North/South split with 81.3% of all vacancies advertised in the south. In general the quarterly movement in jobs show the South up by 0.9%, the Midlands by 1.1%, the North by 1.3% and Scotland by 6.4%.
Key results by business sector
The main changes that have affected various business sectors are as follows:
- Recruitment in the finance sector suffered a setback with the first decline in the number of advertised jobs seen since 2009. This quarter there were 5.5% fewer vacancies than the previous quarter
- Software houses and outsource consultancies are the biggest recruiters of IT personnel in the UK and this quarter made up over 62% of all permanent jobs advertised. Demand in this sector is up by 8.1% since the previous quarter. This may well be due to further outsourcing coming from the finance and public sectors, as they cut back on recruitment
- From the low points in 2008 jobs in retail are up for the fourth successive quarter, with 5.1% more jobs on offer, followed by manufacturing up by 7.4% and the electronics sector up by 3.2%
- The impact of the coalition’s policy on public sector recruitment has resulted in vacancies tumbling by 18.4% in the third quarter and by 31.1% in the fourth quarter. More outsourcing may be evident in this sector in the future.
In the contract market the main driving force in staffing demand is also from software houses and financial organisations that make up 46.0% and 34.8% respectively of the market. This time around software house recruitment for contractors is up by 2.5%, but for finance down by 3.6%, a similar trend to that seen for permanent recruitment. Elsewhere retail is up by 6.7% and the media by 3.7%. The fallout from public sector cuts continues with 14.8% fewer vacancies this quarter.
In summary, we have now seen six quarters of consecutive growth in the IT staffing market and this trend looks set to continue. This has been largely fuelled by the financial sector, though growth rates there did slow in December when other business sectors grew at a faster rate. Market reports from January this year (such as the Markit Report on Jobs, sponsored by the Recruitment and Employment Confederation and KPMG) clearly show growth has increased from December with demand for permanent IT staff growing the fastest. Demand from the public sector has unsurprisingly reduced and may yet impact overall employment levels.
Our view is that the demand for business and technology staff will continue to rise at steady rates this year and we believe recruitment of most roles and skills will become more challenging through the year.
If you feel that ReThink can provide any further information to help you plan or bring in additional resource please contact your consultant of go to www.rethink-recruitment.com.
Information based on advertised roles and supplied by Salary Services Ltd/ Jobadswatch, February 2011
