Greythorn Technology Market Landscape 2014


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Greythorn are proud to announce the release of our Technology Market Landscape 2014. Drawing on information from our in-depth Hiring Manager and Candidate surveys this presentation will inform you of trends and issues currently affecting the IT and Technology markets.

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  • Greythorn’s experienced Technology consultants, technology specialisation and absolute dedication to premium delivery creates loyal and valued partnerships with our key clients.
    Depth of Knowledge
    Greythorn Account Managers are experts in Technology recruitment with an average of 4 years tenure and 6 years Technology recruitment experience.
    Greythorn have been developing its brand and reputation over a 37 year period and is recognised today as one of the Australia’s leading specialist recruiters, by our candidates and clients. Our consultants are vertically aligned and are pure specialists, that are passionate about being recognised as leaders in their field.
    Premium Delivery
    Greythorn’s reputation in service delivery is unrivalled, our recent survey results showed:
    99% of our candidates would use us again and recommend us
    100% of our clients would use us again and recommend us
    Value Adds
    Premiums resume with detailed profile, premium reference checks, daily recruitment updates, automated SLA tracking, candidate and client care programs, comprehensive candidate evaluation process, regular IT market landscape presentations, free technical testing with TeckChek, salary surveys and market intelligence reports.
  • Over 1100 Hiring Managers voiced their opinions in on the Australian technology sector.
    This year we have seen a significant increase in responses from the Finance and Insurance sector, with a 13% representation in 2012, growing to 21% in this year’s survey. We have seen a decrease in responses form the government sector, moving from 15% in 2013 to 9% in 2014.
    We have also seen a 49% increase year on year in the number of respondents with large IT departments (500+). 
  • Nearly 1800 professionals voiced their opinion about the job market in Australia. All survey responses, comments and insights have been consolidated for this Australian Technology Recruitment Market Insights and Compensation Overview 2013-2014. These survey results are recognised throughout the Australian technology industry as an accurate representation of the industry and a market leading source of quality insights and opinions. The survey was carried out during the first quarter of 2013, and it was distributed in the form of an online questionnaire.
  • Hiring Managers are not only taking a positive view of the economy, they’re also optimistic about the impact of the Liberal Party’s election win. 40% believe that the election of the Liberal Party has had a positive impact on their business with only 13% believing it will have a negative impact.
    Once again, the most pessimistic were those actually working in government. 32% of those surveyed believed that the Liberal Party win will have a negative impact on their business.
  • Optimism remains low in the ACT, mainly due to the transition period currently being experienced as the new Liberal Government settles in.
  • Technology professionals in Australia, are in their majority, optimistic about the future of the economy. Positivity from the candidate side grew this year, moving from 36% to 43%, however there were traces of negative sentiment with a third still having 1/3 a pessimistic outlook.
    Hiring managers are also much more optimistic about the future of the economy in 2014 compared to 2013. This has risen from 37% to 46%.
    Looking at optimism by industry those working for Government organisations were the least optimistic about the future of the economy, with only 33% taking a positive view of the future.
  • With nine out of ten candidates looking for a new role and 36% of managers predicting increased headcount there is no bunkering down when it comes to IT. However, hiring intentions are slightly lower than 2013 - 36% plan to increase headcount in 2014 vs 39% in 2013 and 10% plan to decrease vs 11% in 2013.
    The main reasons to increase headcount in 2014 remain the same as 2013 ie Project specific work and workload, however expansion dropped from 27% in 2013 to 19% in 2014. Of those hiring managers who plan to decrease headcount in 2014, budget restraints remained the key reason for 60%, however this has dropped from 70% in 2013.
    Although more hiring managers are planning to reduce their contractor numbers, these are slightly more positive than 2013 with 21% aiming to decrease contractors this year (vs 25% 2013) and 17% looking to increase (vs 15% 2013).
  • Looking to industry sectors, the Technology/Digital industry showed the highest expected increase with 58% planning an increase in headcount and only 4.5% expecting a decrease in headcount. Tying in with their lack of optimism those in Government were least expecting to see an increase in headcount in 2014 at just 24%, with 29% predicting a decrease. Those in Queensland are the most polarised, with 49% of respondents planning to increase headcount in 2014 and 16% also planning to decrease headcount. Interestingly, those with large IT teams of 201-500 are planning the largest increases, with 35% predicting an increase in headcount.
  • Once managers do decide to hire their biggest challenge remains a lack of skilled IT candidates, with 42% citing this as an issue. The exception to this is in the ACT, where managers believe economic uncertainty is the biggest challenge. Overall, economic uncertainty as a challenge has dropped by 16% year on year. Internal processes, however, are getting worse, 17% saw this as the biggest challenge in 2013 vs 22% in 2014. This is most prevalent in Government, with 37% citing internal processes as the biggest challenge.
  • The most important attribute when recruiting IT staff is cultural/team fit (32%), which has skyrocketed from 19% in 2013. The ability to do the job now has dropped to second spot. For Government however, the opposite was true – a significant 41% felt the ‘ability to do the job now’ was most important followed by ‘cultural/team fit’ (22%). In 2011, cultural/team fit was only most valued by 20% compared to 42% ability to do the job now – a massive turnaround for 2013.
  • Managers continue to underestimate the percentage of their workforce that is job hunting, while that same percentage of candidates job hunting continues to grow year on year. The fact that over 90% of candidates are looking for work should be quite shocking for employers: Greythorn’s Hiring Intentions survey revealed the majority of employers believe only 11-25% of their staff would consider changing roles.
  • Job insecurity has ranked this year at historically high levels (highest since 2011) with one third of respondents feeling insecure or very insecure in their current role. This is probably linked to the rise of redundancy, which as we will see later is the second most common reason for leaving a permanent job.
    This insecurity was particularly evident within the contractor workforce, the biggest threat being the fear of having their contract terminated at short notice. Candidates within the Government sector were particularly insecure, perhaps due to the upcoming election and budget cuts within the public sector.
    The implications are simple – if your staff do not feel they are secure in their job they will look elsewhere before they are left high and dry
  • The majority of hiring managers believe that there will be no change or a slight increase in contractor rates, however 33% of Hiring Managers in the ACT believe there will be a decrease, with a further 50% believing they will remain the same.
  • Looking to those that are expecting strong to moderate increases Education & Training are the biggest winner, followed by Financial & Insurance Services. 34% of those working in government believe contractor rates will decrease, compared to average of 18%. This his lack of optimism likely due to the new Government still being in the transition stage and the yet to be understood full impact of the permanent and non-ongoing hiring freeze.
  • Hiring Managers and candidates agree: Cloud Computing is the skill to watch. Aside from that though, candidates and hiring managers have very different ideas on what to watch over the next 12-24 months.
    Business Intelligence came in a close second for Hiring Managers, growing in demand from last year (42% to 45%).
    Also from a Hiring Manager point of view, Business Analysis and Programming saw the biggest drops as skills in demand, from (39% to 29%) and (32% to 22%) respectively.
    Soft skills are also growing in importance – 30% of hiring managers believe this is one of the most valuable skill sets to have. From our candidate survey, 56% of candidates also reported that they are getting growing pressure to increase their non IT skills in order to advance their careers.
    New to the list in 2014 was also Big Data - 30% of hiring managers viewing this as a key skill.
  • According to Hiring Managers Project management is the most valuable skill for the next 12 months in the ACT, rising from third when we look at Australia as a whole. Programming has also made it into the top 5 for the ACT, a skill that has not showed up as being in demand for any of the other states.
  • Hiring Managers in QLD have taken a very similar outlook to the country as a whole, with cloud computing remaining the most valuable skill set for the next 12 months.
  • Hiring Managers in the VIC have taken a very similar outlook to the country as a whole, with cloud computing remaining the most valuable skill set for the next 12 months. Soft skills are more highly valued in the VIC, rising from fifth when we look at Australia as a whole to third in the VIC.
  • Hiring Managers in the NSW have taken a very similar outlook to the country as a whole, with cloud computing remaining the most valuable skill set for the next 12 months.
  • Despite widespread discussion, the majority of organisations do not expect to be impacted by skills shortages in 2014. Those that are going to be affected by skills shortages in 2014 are planning on addressing the issue internally, with training, flexible working arrangements and graduate programs. A smaller percentage of organisations are looking externally to address skills shortages, implementing hiring schemes to target international candidates.
  • Our results show that less managers would hire international staff than in the past, indicating that negative experiences outweigh the positive. There is the option to outsource the risk by getting agencies to sponsor the international candidates on contracts.
    The United Kingdom and its surrounds remain the number one places candidates are sourced from outside of Australia. We have seen a significant decrease in the number of hires coming from Africa and the Middle East. India has also moved from the third most popular country to source from to the second.
  • Surprisingly, clients remain in the dark about inadequate on-boarding processes, with 70% of Hiring Managers believing their induction and on-boarding processes for IT contractors are adequate or comprehensive, compared to only 59% of candidates. One of the key reasons for this failure at on-boarding is that new online on-boarding and induction processes lack human touch. Contractors are the biggest losers when it comes to on-boarding, with 41% rating their companies on-boarding processes as inadequate or non-existent.
    Employees biggest gripe is that they are missing the context of their roles, with many saying they were not introduced to the team they would be working with.  These employees are lacking crucial information about the team and their company such as: who is accountable for what, who do they go to with a problem, who do they work with on these deliverables?  In the case of contractors this may be simply that they seen as being short-term employees, however the majority of contractors do end up extending, and for any employee having a good understanding of their role within a company is key to being productive as early as possible.
  • With the volatile GFC period behind us the technology market has stabilised. We experienced the traditional drop in jobs around the Christmas and End of Financial year periods while remaining steady overall.
  • Our placement data shows a larger proportion of contract placements in Q4 than Q3. This backs indications of a strengthening technology project landscape as well as predictions that project based recruitment will be the next centre of growth in technology recruitment.
  • Across both permanent and contract sectors Victoria has some of the highest paid employees nationally.
  • ACT and VIC have the highest paid permanent and contract employees.
  • 69% of candidates have lost interest in a role because it took too long. The cost of losing a good candidate to a competitor, having to start a recruitment process from scratch and the damage caused to a company’s brand by taking too long means that speed to fill should taken very seriously by hiring managers. Speed to fill is a competitive advantage for only a few successful organisations.
  • Although recruitment process lead times still remain an issue, this has fallen slightly from 70% reporting it an issue in 2013 to 66% in 2014. There has been no change in the overall satisfaction of IT staff as seen by their hiring managers.
  • The obvious pressure across many IT departments is on headcount, with team reductions stemming from ongoing corporate restructuring and rationalisation programs.
    In response to this we are witnessing a solid march towards SOW (Statement of Works) projects. This is not a superficial change; project-driven recruitment drives dramatically different financial implications at department and whole-of-company level, and is monitored and evaluated not only by the known HR (but also?) tracking and performance metrics.
    Candidates also believe project based recruitment is on the rise and remain positive with 28% believing there will be more jobs available in 2014.
    The decrease in remuneration rates of contractors in some states combined with the large number of candidates interested in new roles point towards improved opportunities for hiring talented contractors.
  • Greythorn Technology Market Landscape 2014

    1. 1. 1 Technology Market Landscape: Outlook for 2014
    2. 2. 2 Greythorn Overview Market Leader Greythorn is one of the most reputable specialist technology recruitment firms in Australia: • Largest Permanent IT recruiter in Australia: >500 IT placements per annum • Significant Contracting IT specialist supplier: >1000 new engagements placed per annum • Established in 1976 with offices in Melbourne, Sydney, Canberra, Brisbane, Chicago, Dublin, London, Sao Paulo, Seattle and Singapore. Key Differentiators • Vertical specialisation. We are experts in the professional markets we service. • Premium, value-based delivery. • Unrivalled consultant depth of experience, industry knowledge & tenure. Awards, Certifications & Memberships
    3. 3. 3 Technology Industry Sentiment: The Survey
    4. 4. 4 Greythorn Hiring Manager Survey Source: Greythorn Client Survey
    5. 5. 5 Greythorn Candidate Survey
    6. 6. 6 Economic Outlook: Liberal Party Election Source: Greythorn Client Survey The election of the Liberal Party has boosted morale, with 40% of Hiring Managers believing the change in government has had a positive impact on their business. What impact has the Liberal Party (Coalition) win had on your business?
    7. 7. 7 Economic Outlook: State Source: Greythorn Client Survey Business confidence is increasing, with 48% of NSW Hiring Managers feeling optimistic about the future of the economy. ACT Hiring Managers were the least optimistic, with only 13% taking a positive view of the economy .
    8. 8. 8 Economic Outlook: Candidate & Manager How are you feeling about the future of the economy? Source: Greythorn Candidate and Client Survey In a significant change from last year Hiring Managers are more optimistic than Candidates. Optimism from the Hiring Manager side is also continuing to rise, having gone up by 24% year on year.
    9. 9. 9 Hiring Intentions Source: Greythorn Client Survey What are your hiring intentions in 2014?
    10. 10. 10 Hiring Intentions Source: Greythorn Client Survey • 58% of Technology/Digital sector Hiring Managers are expecting increase in headcount. • Only 24% of Government sector Hiring Managers predicting an increase in headcount. • Queensland the most polarised state. • Companies with large IT teams (201-500+) planning on expansion.
    11. 11. 11 Hiring Challenges Source: Greythorn Client Survey
    12. 12. 12 Hiring Challenges Source: Greythorn Client Survey Cultural/team fit is increasingly important to Hiring Managers, pushing ‘the ability to do the job now’ down from the number one most important attribute last year to number two.
    13. 13. 13 Job Seeker Behaviour: Manager Perception Source: Greythorn Client Survey What percentage of IT staff do you think are actively looking for a new role or keeping an eye on the market? The majority of Hiring Managers believe that only 2.5/10 candidates are looking for a new role, where in reality a significant 9/10 are.
    14. 14. 14 Perceived Job Security: Candidate How would you rate your job security? Source: Greythorn Candidate Survey Job insecurity sits at a record high with 33% of respondents feeling insecure or very insecure.
    15. 15. 15 Remuneration: Candidate & Manager In spite of rising optimism about the economy Hiring Managers are predicting little change in contract rates. Source: Greythorn Candidate Survey
    16. 16. 16 Remuneration: Manager Education & Training are expecting the largest increases, with 43% of Hiring Managers expecting a strong to moderate increase in contract rates. Source: Greythorn Candidate Survey
    17. 17. 17 Market Conditions: Skills Source: Greythorn Client & Candidate Survey What do you believe the most valuable skill sets in ICT will be in the next 12 months? Hiring Managers Candidates
    18. 18. 18 Market Conditions: Skills ACT Interestingly, Cloud Computing is not nearly as valuable in the ACT as it is across the rest of Australia. Source: Greythorn Candidate Survey
    19. 19. 19 Market Conditions: Skills QLD QLD Hiring Managers have very similar expectations to Australia as a whole. Business Analysis is seen as a skill to watch here and in VIC. Source: Greythorn Candidate Survey
    20. 20. 20 Market Conditions: Skills VIC While similar to the national outlook, soft skills are far more highly valued in VIC than any other states. Source: Greythorn Candidate Survey
    21. 21. 21 Market Conditions: Skills NSW NSW Hiring Managers have taken a similar outlook to Australia as whole, with the majority seeing Cloud Computing and Business Intelligence as the most valuable skills. Source: Greythorn Candidate Survey
    22. 22. 22 Market Conditions: Skills Shortages Source: Greythorn Client Survey Rather than looking outside of themselves organisations are turning to training to address skills shortages in 2014.
    23. 23. 23 International Sourcing Source: Greythorn Client Survey Interest in hiring international candidates has decreased year on year as companies find the negatives experiences and risks outweigh the benefits.
    24. 24. 24 Workforce Engagement: On-boarding How would you rate your company’s on-boarding and induction process? 24 Source: Greythorn Client Survey 41% of candidates believe companies are failing at on- boarding, citing a lack of human touch as the main reason.
    25. 25. 25 Technology Market Landscape: Activity & Trends
    26. 26. 26 Jobs Received by Greythorn Source: Greythorn Database
    27. 27. 27 Contract vs Perm Placements Source: Greythorn Database
    28. 28. 28 Remuneration – Permanent NSW Source: Skills Match IT Contracting & Recruitment Association Permanent salaries in NSW have followed the Australian trend for 2013, with steady growth from Q3 2013.
    29. 29. 29 Remuneration – Contract NSW Source: Skills Match IT Contracting & Recruitment Association After reaching a high in Q3 2013 contract rates now remain steady, in line with the national trend.
    30. 30. 30 Remuneration – Permanent VIC Source: Skills Match IT Contracting & Recruitment Association Victorian permanent salaries remain somewhat volatile, slipping slightly blow the national average in Q1 2014.
    31. 31. 31 Remuneration – Contract VIC Source: Skills Match IT Contracting & Recruitment Association Contract rates have jumped to their highest level in 3 years. Victorian contractors are now paid significantly more than their counterparts interstate.
    32. 32. 32 Remuneration – Permanent ACT Source: Skills Match IT Contracting & Recruitment Association Permanent salaries have stabilised significantly since 2010. While salaries have dropped slightly in Q1 2014 ACT permanent employees are still receiving salaries above the national average.
    33. 33. 33 Remuneration – Contract ACT Source: Skills Match IT Contracting & Recruitment Association Contract remuneration in the ACT remains steady quarter on quarter . ACT contract are also now receiving remuneration above the national average.
    34. 34. 34 Remuneration – Permanent QLD Source: Skills Match IT Contracting & Recruitment Association QLD salaries continue to be highly volatile, having dropped significantly below the national average in Q4 they are now on the rise.
    35. 35. 35 Remuneration – Contract QLD Source: Skills Match IT Contracting & Recruitment Association Contract rates in QLD continue to be highly volatile. After dropping well below the national average rates are now climbing back up.
    36. 36. 36 Topical Issue 1: The Recruitment Process
    37. 37. 37 Recruitment Process Time Lines: Candidate Source: Greythorn Candidate Survey The cost of being too slow; speed to fill is a strong competitive advantage.
    38. 38. 38 Recruitment Process Time Lines: Manager Candidates report that the recruitment process has taken longer, would you agree with this? Source: Greythorn Client & Candidate Survey Speed to hire when part of a quality selection process can be the cheapest comparative advantage in sourcing quality resources. Is it “not good enough talent” or “not ticking ALL the boxes”?
    39. 39. 39 Topical Issue 2: Contractors
    40. 40. 40 Improved opportunity for hiring Contractors Source: Greythorn Client Survey • Project based recruitment pillar of growth for Technology industry • Higher proportion of candidates contracting • Contract remuneration down in NSW and QLD • Contracts placements on the rise
    41. 41. 41 Disclaimer This research was carried out by means of an electronic questionnaire. The remuneration tables are supplemented with data and market information that Greythorn has access to. The results are provided as generic market information only. Greythorn does not make any warranties regarding the use, validity, accuracy or reliability of the results and information obtained. Greythorn will not be liable for any damages of any kind arising out of or relating to use of this information.