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Computing contractors set to become more expensive than permanent staff

A firming economy over the next few months could reverse the growing trend of contracting Computing Professionals as they become more expensive to hire than permanent staff, according to the latest Clarius Skills Index.

The September quarter Clarius Skills Index for Computing Professionals was balanced at 100.4, with the skills shortage of 1,100 people in the June quarter reduced to 900 this quarter.

However, as the economy should firm in coming months and uncertainty about the global economy abates, contractors will become too expensive and there should be a push toward hiring permanent staff.

Linda Trevor, Executive General Manager of Candle, said continued demand from major private and public projects would increase competition in the marketplace for prospective employers and force many to move from contractors to permanent as wage salary demands increase.

“We are very close to the optimum supply of Computing Professionals and competition is going to increase wage demands. Employers will need to manage the changing job climate and plan ahead,” Ms. Trevor said.

“Remuneration is expected to grow around 10 per cent across all states and territories and given the project cycle, upward wages pressures will likely emerge for testers and developers in the next six months.”

The supply of Computing Professionals grew by 1,500 people to 213,400 in the September quarter but demand only added 1,300 jobs (to 214,300), narrowing the skills gap.

This followed a significant jump of 17,000 Computing Professionals through the June quarter when demand increased by 8.2 per cent to 213,100, outstripping supply which rose from 195,000 to 212,000.

Ms Trevor said the shift between demand for contractors and permanent staff follows the business cycle, and greater uncertainty in the wider macro economy is causing the current shift away from hiring permanent staff.

“Businesses currently find it difficult to commit to permanent staff because of the uncertain outlook. The slowdown in permanent positions has happened very quickly between September and October. But this will change in the New Year,” Ms Trevor said.

Read the full media release here.

Download the latest September 2011 Clarius Skills Index to learn more about the latest labour demand and supply in Australia.

The Clarius Skills Index is Australia’s first ever National skills index that measures the extent of skilled labour shortages or oversupply across 20 occupation categories, using labour force data supplied by the Department of Employment and Workplace Relations and the Australian Bureau of Statistics.

Contact a Candle consultant for more information or access previous editions from the Clarius Skills Index Archive.