Market Review A presentation

January 2003

IT Industry

What is going on in the IT Industry?

Projected Market Strengths

• Mobile devices and infrastructure• Interactive voice response systems• Microsoft XP• Thin-client devices• Broadband internet• Security• Disaster recovery• Legacy application platforms• Storage

Current Market Weaknesses

• Consulting• e-Commerce• ERP• CRM• PC hardware and software• Workstations• Fixed network infrastructure• Business communications• Mobile terminals

What is Most Important to any Organisation

• Email• Internet - intranets/extranets• System security• Increasing bandwidth• CRM is leaving ERP behind• Improving existing systems/developments

What is in the News

• Mergers of consultancies, eg LogicaCMG – T/O £2b, 24,000 employees, 34 countries

• Huge outsourcing deals, eg – Unilever o/s BT £640m– Consignia o/s CSC £1.5b

• Company ‘streamlining’, eg Sun• Business strategy (not IT strategy)

Focus on Recruitment

• Current market• Skills• Advertising• Salaries• Costs• Career motivators• Retention

Current Market

• 1m IT employees in UK

• 30% freelancers are ‘resting’

• IT contractors business closure has doubled to 16%

• In-house recruitment specialists

• MV/ managed Agent

• PSLs

• Outsourcing/managed supply

• Recruitment agency consolidation

• Smaller agencies closing

• Legislative changes - working time directive, IR 35

PAYE liability, right to work

Skills – Supply and Demand

Skills in most demand

2002 2001 20001. C++ C++ C++2. SQL UNIX UNIX3. UNIX SQL SQL4. Oracle Java Java5. VB Oracle VB6. Java VB Oracle7. C HTML Windows NT8. Windows NT Windows NT HTML9. Office TCP/IP TCP/IP10. TCP/IP SQL Server C

Skills – Supply and Demand

Skills most in supply

Skill Salary1. HTML £28,4862. Windows NT £30,1123. Unix £35,5484. Java £32,2445. MS Access £29,0566. Oracle £35,9097. MS Visual Basic £31,9348. MS SQL Server £33,2349. C++ £32,56710. Javascript £30,676

Current Advertising Market

• Jobs advertised in hard copy during 12 months to October - 69% on same period last year

• Jobs advertised on-line during 12 months to October - 69% on same period last year

• The on-line IT recruitment market is now fully mature

• YTD October 2002 - Consultancy advertising 76% Direct

advertising 55%

Current Advertising Market

Average number of pages

Computer Weekly

• 2002 - 9• 2001 - 25• 2000 - 49• 1999 - 68

Methods Considered Best when Looking for a Job within IT/Computing

21%

20%

15%

14%

13%

5%

4%

Recruitment consultant/agency

Specialist IT web site

Word of mouth/throughfriends/colleagues

Computer/IT publications

Local/regional newspapers

National newspapers

Contacting potential employer direct

Future Advertising Market?

• Internet - continues to develop

• Companies - brand marketing

• More multi-channel packages

IT Salaries

• Wage premiums IT staff diminishing

1992 +60% average annual wage

2002 +30% average annual wage

• Salaries increased by 4% 2002

5.1% 2001

Advertised Salaries

Q1 2002 Q1 2001 % ChangeSystems Achitect £53,852 £56,709 -5%IT Manager £51,366 £53,641 -4%Project Manager £46,326 £47,033 -2%DBA £36,888 £37,326 -1%Software Engineer £31,280 £30,534 2%Test Analyst £30,537 £29,520 3%

Recruitment Costs

• Buyers market

• Renegotiation of fees/contractor rates and margins

• Shift of contract headcount to permanent - reduce costs

• Advertising costs levelled

Career Motivators

32%

26%

7%

9%

14%

8%

3%

2%

1%

5%

4%

27%

21%

17%

11%

7%

7%

5%

6%

6%

2%

3%

0% 10% 20% 30% 40%

Personal ambition/achievement

Financial/money

Enjoyment/satisfaction

Progression of tech

Gaining IT knowledge

Commitment to company

Challenge

Interest

Customer focus

Team building

Opportunity

< 20 Yrs

21+ Yrs

Retention

Most leavers - push factor - poor management

- low morale

- one-offs

Line managers have most influence on a companies ability to retain, not HR!

Top Tips form Computer People’s Contract

Consultant

• Flexibility• Realistic Rates• Don’t negotiate contract• Be careful with umbrella companies• Specific front cover sheet• Don’t spread skills to thinly• Specify ideally your needs and wants• Take on board constructive criticism

Top Tips form Computer People’sPermanent Consultant

• Apply to as many jobs as are relevant on the internet• Follow up with a call to the consultant and get

through• Apply to fresh jobs every day• Tailor your CV • Highlight relevant skills• A job posted on a Friday well have 300 responses by

the Tuesday - Act quickly and Follow up• Establish good rapport with consultant

Conclusion

• There are jobs out there

• Differentiate yourself

• The IT market is not in depression - The boom is over

• Good Luck