Despite the concerns over the impact of the public sector cuts we are pleased to report that IT recruitment levels continued to rise during the third quarter of 2010. We have now seen five consecutive quarters of growth in demand for IT professionals, with the rate of demand more pronounced through 2010 – 4.4% in Q1, 8.1% in Q2 and 7.6% in Q3.
This increase is in line with other economic indicators showing an improvement in the economy and coincided with the UK coming out of recession at the end of 2009. However, the rate of increase in Q3 was slightly less than the 8.1% seen in Q2 and, compared with the start of the financial crisis IT recruitment is still down by 152%. But we are encouraged with this sustained revival and believe that demand at the ‘professional’ end of the staffing market (e.g. IT and finance roles) will continue to rise.
Key points to note:
- Demand for permanent IT jobs up by 7.6%
- Vacancies in finance up by 7.5%
- North/south split of vacancies widens to 75.5/14.5%
- Demand for management up by 8.7%
- Increase of 13.3% for contract IT staff
Key salary trends
Advertised permanent salaries reflected the state of current employment levels with average pay in advertisements increasing by just 1.3% compared with a year ago. This is marginally higher than the 1.1% recorded in Q1 2010. These general figures tend to hide the wide variations seen in salaries dependent on the job function, region, business sector and software skills. For instance, developers have seen pay offers increase by up to 4.3% over the past year, with a 2.8% increase for project managers.
Contract rates started to improve in Q1 2010 and have continued to rise in Q2 and Q3 with median rates up by 4.8% compared with twelve months ago.
Key IT skills trends
Demand for the Microsoft development tools of C# and .Net grew by 3.6% and 9.6% respectively between Q1 and Q2. Contract skills also show demand for C# and .NET up with 14.5% and 10.6% more vacancies available in Q3. Elsewhere Agile is in the table for the first time.
This indicates there is a significant rise in the number of business projects in UK organisations that now require development resource.
Key regional findings
The main movement in IT recruitment across the various regions over Q3 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, the north and Scotland with less than 15%. The gap between the south and north has widened by over 8% in the last year and clearly demonstrates how influential the finance sector is on demand
- Compared with the Q1 2010, Q3 has seen jobs in Central London increase by 7.7% and in Greater London by 8.6%. Compared with twelve months ago the figures for Central and Greater London show an increase of 23.8% and 27.3% respectively
- The east Midlands have shown some improvement with jobs up by 3.2%
- In contrast to this Scotland managed to show better prospects with 1.5% more jobs advertised, mainly due to the growth in the finance sector
- Contract vacancies show the same north/south split as seen for permanent recruitment, with 81.5% of all vacancies advertised in the south
Key results by business sector
The main points affecting various business sectors are as follows:
- Software houses and outsource consultancies are the biggest recruiters of IT personnel in the UK and in Q3 made up over 60% of all permanent jobs advertised. Demand in this sector is up by 8.3% from Q2
- Finance, with 23.2% of the market, has seen 7.5% more job advertisements in Q3 from Q2, and again has been one of the main reasons for the improvement in job opportunities, particularly in London and the south
- From the low points hit in 2008 jobs in manufacturing are up for the third consecutive quarter, with 7.9% more jobs on offer, followed by the media sector which is up by 7.4% and retail by 6.8%
- Having seen some upward trends in public sector recruitment in Q1 2010 this has now gone into reverse. The impact of the new government’s policy has seen recruitment fall by 18.4% during Q3. Since the start of 2010 vacancies are down by 35.9%. It does not look good for the short term prospects in this sector
In the contract market the main driving force in recruitment is also from software houses and financial organisations making up 44.5% and 35.8% of the market respectively. This time around, software house recruitment for contractors is up by 12.5% and in finance by 13.6%. Elsewhere manufacturing is up by 13.4%, retail by 9.2% and the media by 6.9%. In addition to reducing permanent IT recruitment the public sector is also pulling back on contractors, with jobs advertised down by 20.1% since Q2.
In summary, we believe that our market will continue to grow but the rate of growth could be impacted by the reductions in investment in the public sector.
We hope this information and analysis helps you plan your recruitment and retention strategies. If you need any further information or assistance in planning permanent or contract recruitment please contact your consultant or go to www.rethink-recruitment.com.
Information based on advertised roles and supplied by Salary Services Ltd/ Jobadswatch, October 2010
