Outlook for IT staff remains bleak

2003

Recruitment consultants have reported a slight improvement in labour market conditions. But the outlook for IT staff remains bleak, with redundancies rising and salaries falling.

The latest Report on Jobs by Deloitte and Touche and the Recruitment and Employment Confederation (REC) shows that although both permanent placements and billings from temporary and contract work have risen for the first time in four months, overall private sector employment contracted for the 25th month in a row.

The growth in permanent jobs was largely fuelled by temporary positions becoming permanent, according to employment agencies, with the greatest demand coming from hotel and catering and the nursing and medical professions.

But the job market continues to be weak at the upper end, a fact highlighted by the marked decline in the levels of press recruitment advertising compared to a year earlier in May.

The REC survey also makes particularly depressing reading for IT staff. The computing sector had the weakest demand for staff in June, figures that are confirmed by the latest e-skills UK quarterly review of the information and communication technology labour market.

Office for National Statistics figures recorded a £75m, or three per cent, decline in hardware and software investment particularly in the manufacturing sector. As a result, the overall number of IT staff made redundant in the UK rose to 10,000 for the quarter with unemployment rates for IT staff climbing to 4.6 per cent. IT managers suffered most with a drop of 21,000 people to 249,000.

The brief rally at the start of the year that saw an increase in advertised IT vacancies has also come to an abrupt halt, according to the e-skills report.

Brett Walsh, head of Human Capital at Deloitte and Touche, welcomed the REC figures as an overall sign that the market was improving.

"The fact that both permanent staff placement and temporary staff billings rose for the first time in four months indicates that employers are taking a slightly more positive approach to staff recruitment," he said.

But Toni Cocozza, chair of the REC's IT and communications division, said signs of growth will take longer to filter through to the IT sector.

"The higher costs involved in recruiting IT professionals means that it takes longer to see the signs of improvement. Employers are understandably cautious about spending, however IT is a business critical investment, and one can expect improvement in our sector to follow."