Irish contract market - Part 1: Green shoots emerge

With the number of positions available showing a marked increase over last year, specialist recruitment firms are confident the contractor market in Ireland has bottomed out.

Demand for contract IT staff in Ireland reached its peak in late 2007-early 2008. Over the following two years the downturn was as sharp as that experienced across the economy as a whole, explains Paddy O'Connell, business unit manager Berkley IT Recruitment.

"Developers with .Net or Java have seen rates decline by up to 17% and other areas experienced even more severe falls, up to 40% in disciplines such as ERP and data warehousing/business intelligence as large capex projects were pulled."

Shorter contracts also became the norm, with three month rather than six month deals being offered.

Grainne Bagnall, manager at Verkom Dublin, admits there will not be a return to the rates available at the end of 2007. However, she also says there has been an increase in demand for contractors over the last 12 months as employers look to fill new positions having released large numbers of staff in 2008 and 2009.

According to Bagnall, interest in cloud computing is driving demand. "Application support is the major growth area and something that few people were studying even five years ago, so specialists with experience are in short supply. The centres of excellence established in Ireland by many multinational firms are another source of demand for contract professionals."

Export-driven product development houses and some financial institutions are also hiring contractors again, while the release of SharePoint 2010 has boosted demand for SharePoint specialists in both Microsoft consulting houses and software companies. The poor take-up of computer related third level courses in the years following the dotcom crash has resulted in developers with more than four years .Net or Java experience being much sought-after, adds O'Connell.

"The number of contract vacancies in January 2010 was four times that of January 2009," Verkom Dublin said. "The financial services sector plays a key role in the IT contract market. While it was stagnant for the last 18 months from a recruitment perspective, companies have started to hire again."

Like most other countries, Ireland offered substantial financial incentives to the likes of eBay and Google to locate there and a corporation tax rate of just 12.5% is undeniably appealing. However, there are those who maintain that tax breaks are only part of the reason why Ireland punches above its weight as a location for technology-related projects.

"Corporate tax rates apply equally across all sectors, not just technology," says Joan Mulvihill, chief executive of the Irish Internet Association, adding that the incentive for IT businesses to invest in Ireland is driven more by the availability of people with appropriate skills, including languages.

"If you take the gaming and digital animation sub-sectors, we have proven expertise as well as a natural creative talent that has been showcased internationally in success stories such as Brown Bag (which has just signed a deal with Disney) and Jolt Online Games, sold by Dylan Collins to Gamestop in the US."

Inward investment by the world's largest technology companies has indicated to a global audience that Ireland has the necessary workforce, and infrastructure, to contribute to their success, O'Connell says, prompting other organisations to establish a presence in Ireland

For the second part of this report, CUK will consider the prospects for the Irish IT contractor market over the remaining months of this year, and up to 2011, with insights from the country's major employers on the skills and experience they are looking for.

Paul Golden

Part 2 of our spotlight on the Irish Contracting Market follows here 'Hot' skills for 2010/11.

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