IT leads improving job market

21:59, Jul 11 2010

Competition for staff is heating up as employers position themselves to take advantage of the economic recovery, surveys show.

A net 20.3 per cent of businesses intend to increase their permanent headcount by September, up 0.5 percentage points from the June quarter, according to the latest survey from recruitment agency Hudson.

Those intentions were backed up by a 29 per cent increase in online job listings on Trade Me.

Hays' New Zealand managing director, Jason Walker, said the start of a new financial year would see a "flurry of recruiting activity" to strengthen the workforce.

"Employers realise they are understaffed, after downsizing during the downturn to a point where they no longer have sufficient headcount to take advantage of recovering market conditions", Mr Walker said.

Hudson New Zealand head Marc Burrage said the increase in confidence, although marginal, extended a positive trend for a fifth quarter.


"Although this positive sentiment does not match the levels enjoyed during the boom, it suggests that businesses are feeling more certain about the future," he said.

"The market has reached a new equilibrium, after the turmoil of 2009."

But employers were being cautious about staffing, with the recruitment of contractors and temporary staff up 6.9 percentage points to a net 13.2 per cent, providing flexibility to increase and reduce staffing quickly if needed.

Historically, a rise in contractor and temporary employment indicated improving economic conditions.

However, in this cycle business appeared to have focused on filling critical permanent roles left vacant during the downturn, Mr Burrage said.

The IT sector led the market with more than half of employers planning to add fulltime staff – up nearly 23 percentage points.

"The sharp sentiment improvement in the IT industry is one of the clearest indicators that businesses are ramping up many of the projects that were put on hold recently, signing off the large-scale capital expenditure required for IT projects and back-filling vacant roles," he said.

Demand was also strong in private healthcare and the construction sectors.

Competition for skilled staff in key sectors would ramp up quickly.

Trade Me's Jimmy McGee said listings for IT, sales and human resources staff all increased by more than 30 per cent on last year.

Pay rates for IT project managers and business analysts increased by 17 per cent and 11 per cent respectively, reflecting the demand for their skills, he said.

Listings on the website were also up 15 per cent on the first three months of this year, including 19 per cent growth in Wellington.

"Businesses appear to have taken a more expansionary approach, confident the recession is behind us," he said.

That, along with improved consumer confidence in anticipation of the October tax cuts, had fuelled recruitment demand, he said.

Wellington regained its mantle as the highest-paid city with an average pay of $74,647.

Employer confidence fell in the North Island but rose by 8.4 percentage points to 34.5 per cent in the South Island, according to the Hudson survey.

Lower North Island regions experienced declines of 2.4 percentage points to 16.9 per cent.

The upper North Island was down 1.0 percentage point to 16.6 per cent and.

Mr Burrage said that the fluctuation in demand between industries and geographically supported the general expectation that the economic recovery would be a bumpy ride.