Usually the IT sector is a barometer for the recruitment market and indeed the economy as a whole. This year the scene seems to be stable, buoyant and indeed lucrative for some, let’s hope this is a good omen for everyone.
The current demand for IT skilled workers is still at a strong level reports Anthony Sherick, Managing Director at Technojobs. IT job levels are expected to grow by 20% by 2020 according to various estimates. The market is still being labelled with a ‘skills gap’ especially in specific skillsets, for example Java, Cyber Security, Digital Media, .Net, and UX. Sherick thinks that this will ensure the healthy contracting market continues that is a way of life for many IT professionals. Contracts as a percentage of IT jobs advertised is quite static however – on Technojobs, this is 22% of all jobs.
Sherick reports that demand for technology graduates in particular is at a high level. Since 2010 technology graduate vacancies have risen over 50% which far outperforms the majority of other sectors. University applications for IT subjects though have shown minimal growth, hence there is a fight amongst employers for future top tech talent. Start-ups in the tech sector are also thriving, especially in London and now they are starting to compete with bigger brands for tech talent, by offering attractive packages including share options and lucrative future pay-outs. “Thus the market is still characterised by an imbalance between supply and demand which makes quality of sourcing for good candidates very important,” comments Sherick.
There are areas of change that will impact contractors from next year as outlined in the 2015 Budget, according to Sherick, namely a higher rate of dividend tax and potential IR35 changes. He says it remains to be seen whether contractors will move to fill the multitude of permanent roles widely available. Sherick thinks political factors, such as making it harder to source from abroad or stringent immigration quotas may also limit the ability to hire the right skills. With this in mind, he advises that from an employer perspective there is nothing more important than building a positive and inspiring employer brand.
Huw Martin is the Managing Director at Head Resourcing. They also perceive the market is really buoyant at the moment, with lots of companies hiring both permanent and contract resources. “We’ve seen a huge spike in the demand for all software skills, and this is projected to continue for the foreseeable future, given the disparity between supply and demand. We work with a number of organisations across the UK who are looking at more and more creative ways to address this gap in skills, or looking further afield (outside of the UK) to find the skills they need.”
Various channels to the people market are opening up all the time, says Martin. “There are the standard job boards and such, and LinkedIn, which do their job (advertising and providing the ability to contact people), but there are also new sites popping up, predominantly in the States/Silicon Valley where the war for talent is especially heightened, which cut out the recruiter altogether (e.g. Crew, Anthology). On the one hand it’s a huge risk for recruiters, but an alternative viewpoint is that unless that end company gives brilliant customer service to every candidate who applies, it could do them reputational damage in the long run.”
Martin thinks sites that enable people to rule themselves in or out seem to be the way forward, (like with Hackajob where candidates complete technical challenges, and ratings-based sites like Glassdoor) and can have a big impact on the decisions people make whilst looking for a role, by informing them on the questions they really want to ask.
Head Resourcing has a good mix of permanent and contract roles, with a noticeable increase in the permanent side over the last few years, Martin tells Onrec. He says they have more companies looking for harder to find IT skills and with the shortages in software development skills and IT security, the permanent side will likely continue to increase. This will likely have a knock-on effect on the contract side as companies turn to fill roles with contractors as they may struggle to find the permanent headcount.
The projections are that the need for IT skills will continue to increase at a pace that the demand cannot fulfil, warns Martin. In Scotland alone there are between 7000 to 10,000 fewer people than there are roles in IT and this is projected to continue for the next five years. A recent UK skills report suggested that there were over 120,000 roles in IT in the UK and yet only 20,000 software graduates entered the market last year, so the gap is widening and is likely to remain for a good time to come. Martin acknowledges the challenge facing recruiters. “Finding better, quicker ways to get to and qualify talent, hire that talent, then retain it is the utopia for companies at the moment, and we’re all trying to find ways to make that happen.”
Chris Rogers, Director of Cortex IT Recruitment reports that his team are working on more recruitment projects than ever before, because: “Being London based in the tech hub of Europe attracts many start-ups and fast growing firms keen to take advantage of super tech talent.” However, Rogers says the challenge for them is that there is a chronic shortage. They see the rise in permanent vacancies coming from companies wanting to grow a stable team rather than the effects of AWR (Agency Workers Regulations). Rogers has found that contractors they are working with are coming back to the permanent market (perm) for career enhancement and stability as opposed to money or AWR.
The market is very fast paced with new technologies emerging all the time, explains Rogers. “Web technology is constantly evolving too with more firms requiring Angular for example. Mobile apps mean iOS and Andriod are increasing in demand. Cloud servers are really prominent plus Azure and Amazon Web Services (AWS) constantly in demand. As a result there is a rise in pure DevOps opportunities as a pure role rather than part of a developer position. Google language ‘GoLan’ or ‘Go’ is also in demand, especially around Silicon roundabout in London.”
Rogers says the nature of recruitment projects varies from client to client; start-ups or companies who experience rapid growth in a short time often have to hire contractors for an interim period, whereas it takes longer to find a perm candidate and secure them.Rogers comments: “Often the work is only guaranteed for an initial period so contractors make sense, but over time our companies will move towards a perm model.”
So, the trend is upward for the IT sector with no signs of slowdown in growth. Rogers knows that many candidates opt to set up their own firm rather than contract, so he expects even more tech firms to be established in London in the future. Plus, foreign firms are also investing more in the capital, so Rogers suggests this will put a further strain on the labour market which will also have a ripple effect across the rest of the UK. It will be interesting to see how the IT sector’s progress is reflected in the recruitment market of the nation.