Australia demands more IT contractors

Like most countries, the Global Financial Crisis has affected Australia, and this led to the suspension of a large number of IT projects in 2009, particularly within the Australian banking sector.

As the crisis spread to other sectors there was a further drop in demand for skilled IT labour resulting in a significant number of skilled IT contractors needing to enter the open market to look for work, which led to a downward pressure on contractor rates during 2009.

At the same time, as a further squeeze on contractor positions, a change in Government procurement policies led to the Australian Federal Government agencies beginning to advertise a large number of permanent IT roles. These new roles were intended to replace as much of the IT contractor base in the public sector as possible.

The overall result was a severe contraction in the IT contract labour market throughout 2009, leading to a fall in contractor roles and rates.

Not surprisingly therefore, many contractors are now employed within permanent positions.

Now the good news - 2010 has so far seen improved confidence in the market and a strong rebound in demand for IT skills which looks likely to continue as the IT sector is driven by longer term considerations than, say retail jobs, which is dominated by consumer sentiment. Added to that, recent data shows business investment in Australia is on the rise.

Demand is being led by the banking sector, as the banks are once again investing in new technology and system upgrades.

The largest demand is for IT contractors in Sydney (Banking and Telecoms), Melbourne (Banking and Utilities) and Perth (Resources Sector). Demand is also growing for candidates with Infrastructure experience however.

With confidence picking up and cash limitations receding, we're finding that companies are beginning to revisit deferred IT projects. February saw IT&T job adverts increase by 8.1% over January to a total of 18,000 vacancies mostly in Sydney and Melbourne for instance (source Advantage job index).

Government projects are also creating IT opportunities - the National Broadband Network and Smart Grid projects are expected contribute to a strong IT sector in 2010-2011.

The National Broadband Network, is a Fibre to the Home network set to be built in Australia. The Australian Government has established a Government business enterprise, NBN Co Limited to design, build and operate an Open Access Network providing download speeds of 100 Megabits per second to 90% of Australian homes and businesses, for which it is offering to contribute an initial cash injection of up to A$43 billion.

The remaining homes and businesses will be supplied using wireless and satellite technologies. The network will be built as a public private partnership and it will be the largest single infrastructure investment in Australia's history.

This project alone is sure to revitalize the IT&T sector and put a strain on available skills. On top of this massive project, the Australian Government has committed to investing $100m in smart grids in 2010. The aim of this initiative is to transform Australia's electric power grid with advanced communications, automated controls, and other forms of information technology and the sort of skills to make this happen are in short supply in Australia.

This is why I see plenty of opportunity for UK IT contractors to find work in Australia. Such demand for IT skills is likely to lead to an IT skills shortage in Australia, possibly as soon as the latter half of 2010; skills shortages will lead to considerable job churn with many positions becoming open or difficult to fill. There are many IT skills/jobs still included on the Australian Government's skill shortage list and maybe more to be added.

This, in turn, will see contractor rates progressively rise during 2010 and on into 2011.

For more information on skill shortages and visa requirements in Australia, a good place to visit is the Australian government website which is regularly updated with any changes.

Particularly encouraging to UK IT contractors wanting to see plenty of sunshine, JobServe Australia has had numerous customers enquiring as to how they can best get UK exposure to their Australia based IT roles.

Update from Sydney Australia by Darren Wright, JobServe Australia.