Technojobs Market Report: whatís in store for 2007

The UKís engineering jobs market has undergone a sea-change; as the pendulum of demand has swung to ídesign and buildí organisations - at the expense of traditional client companies.

Such is the verdict of Beechwood, the technical jobs specialist, which yesterday said a slowdown over the past two years in Automotive and Aerospace industries is to continue into 2007.

Major EPC organisations in and servicing the Oil and Gas, Nuclear and Power Generation industries will fill the vacuum, to demand project engineers/managers and commercial designers.

Alongside Power Transmission Distribution projects, the trio has been fuelling demand for this narrow candidate pool since 2004, resulting in PM salaries today of up to 65,000p/a.

However these managers - though not technical or engineering managers - are working in buoyant areas like on petrochemical, LNG and GTL projects, said Colin Woolford, Beechwoodís resourcing manager.

Typically, these large projects are based in the Middle East, such as Bahrain or Iraq, and clients include US-owned engineering or construction consultancies like Halliburton and Bechtel.

Based on 200 íliveí vacancies on the agentís database, most of which are permanent, Mr Woolford said the startling trend is the shift away from Aerospace and Automotive placements.

A leading Electronics, Defence and Aerospace recruiter yesterday confirmed the decline to Technojobs, saying the current climate was not only far from buoyant, it was íhorrid.í

We donít follow the same slowdown as is typically seen in the IT market as the year-end approaches, said Kay Alexander of John Prodger Recruitment.

Usually, except for the last couple of weeks prior to the Christmas holiday, weíll be reasonably buoyant all the way through. Usually at this time of year, candidates return from their summer holidays and say, íI canít stand this placement any longer I want to move.í

But this is not the case; we are currently suffering in terms of new candidates. The current climate on the market is horrible. Weíre witnessing a dwindling supply of CVs. Partly this is due to the skills shortage, but I find it hard to believe that this is the only reason.

In a statement, the firm explained vacancies for candidates are plentiful, evidenced by a 15% rise in the volume of placements coming onto the agentís database in the last six months.

The Defence jobs specialist did however add some good news: salaries have crept up for permanent commercial managers, and similarly, client organisations are ífighting overí systems engineers.

These two roles are for Ministry of Defence projects and we expect demand [for these] to continue into January. In 2007, demand for permanent staff in the sector will be generated by the MoDís Watchkeeper project - a tactical unmanned air vehicle system.

Thereís also a portfolio of Defence Communications projects. These, like the Watchkeeper programme, will take on some contractors, but mainly at the front-end of the programme. This is because it takes quite a long time to intake a new permanent placement in the Defence industry, due to security clearance as well the notice period, so contractors often fill the gap in the short-term.

Asked whether more should be done to tempt permanent candidates to step into Aerospace and Defence, the agent replied: Itís something we have loudly suggested.

It added: The Defence industry is very, very slow to pick up on treats to attract candidates, such as lifestyle incentives. A survey we carried out 18 months ago revealed a distinct difference between our (private sector) Telecoms customers and our (public sector) Defence customers in terms of the ísweetenersí offered, such as flexi-time, health cover and enhanced pensions.

We have loudly suggested that the MoD and its supply chain should consider offering such job perks to attract candidates. [But] the Defence industry is like a Supertanker - it takes a long time to turn.

More agile are private sector clients in the electrical, mechanical and construction engineering industries, which have responded to their staff not to incentivise, but for retention.

Experts at Beechwood explained: Itís easier to source an engineering manager, project manager, production manager or operations manager than it is a production engineer, or project engineer, with say five yearsí experience in Power Generation.

This has forced an upward pressure on salaries for this narrow pool of engineers. In addition, incentives are being offered such as company cars and pensions schemes by organisations.

A lot of companies now regard their engineers with greater gravitas; hence the financial incentives, and Iíd expect this continue into next year, as end users wish to hold on to an important staff resource.

ICT contractors, consultants and freelancers are excluded from sweeteners seen as commonplace to their full-time counterparts, such as training, though they can take reassurance in the premiums offered for their services.

E-skills reports during the first quarter this year, database experts commanded an average of 1,660 per week, while the highest paid freelancers; Senior Business Analysts were being sought for 2,050 per week.

The UK skills shortage will continue to build the profits of these freelance specialists into 2007, though the sector skills council said long-term contract demand centres more on Linux and PHP.

Evidencing claims of a widening ICT skills gap, e-skills says the number of contract and permanent candidates seeking new placements (during Q106) fell to its lowest level in almost five years.

CBS butler, the technical recruiter, yesterday echoed the problem of a short supply of suitably skilled ICT candidates, saying client company demand was now firmly outstripping supply.

David Leyshon, managing director, said: We are seeing a demand for C# developers and are struggling to fill this demand: there seems to be a shortage in the market. Other skills [in short supply] include Sharepoint, SAN, UNIX and TIBCO.

He added that IT professionals can expect public sector clients to compete for their talents, in wake of a strong portfolio of government IT projects.

There are going to be a lot of ongoing contracts moving into 2007 - NHS, Department for Work and Pensions, Aspire(HMRC), DII(MoD), to name a few and the trend looks to be continuing.

The trend this year has seen a massive increase in demand, especially for permanent candidates, Mr Leyshon said in a statement to Technojobs.

It continued: However...salaries appear to be moving in the direction of pre 2000/2001. I expect this to level out in 2007 and as the permanent market makes inroads, the amount of contract work may reduce slightly.

Meanwhile, the IT industryís closest bedfellow, the telecoms industry, remains competitive and candidate-driven.

Recruitment firm Hudson said there are two different stories to be told, however.

The mobile market-place is currently one of outsourcing, consolidation, mergers and acquisitions, but the fixed and broadband markets are resurgent and gaining an increasing market share, explained Phil Clarke, the firmís managing director of IT and Telecoms.

Speaking to Technojobs, Mr Clarke said the advent of Broadband and Wi-FI/Wimax technologies poses a very real threat to the 3G mobile space.

For staffing companies, this indicates a need to realign their business to ensure they are reading the market trends rather than reacting to them, he said.

For candidates, he explained industry clients, particularly Operators, are striving to drive down personnel supply costs, to ensure maximum efficiency for their networks.

Therefore increasingly commercial roles are becoming prevalent such as change managers, service delivery managers, business analysts and vendor managers.

On the technical side the newer technologies are in demand and therefore engineering personnel in the following domains are vital: Wi-Fi, Wimax, HSDPA/HSUPA, DVB, W-LAN and IP, he said.

According to the agent, these specialisms will remain firmly in demand for the closing months of 2006, and well into 2007.

However, only those telecoms contractors with such íhotí skills are expected to be able to command premium rates, as industry clients agonise over íthe bottom line,í hungry for potential savings.

By contrast, and similar to the outlook for permanent IT candidates, there is more flexibility in the full-time salaries available.

Mr Clarke said: Clients have to be more competitive with their salaries and creative with their accompanying packages as again, the leading resource will have their pick of the companies that they can and want to work for.

Telecoms companies are looking to retain talent and hire permanent personnel and this trend has been consistent for some time, he said.

But the focus on permanent staff should not dilute demand for short-term contractors - especially for those whose CVs display niche skill sets.

The companies that have merged or acquired are using contractors as they are unable to hire permanently, Hudson said in a statement.

And as usual; to obtain rare skill-sets, contract-hiring will be used to attract the right people at the right price.