The Year Ahead: Skills trends for 2002

2001 was notable for being one of the worst years for job losses in the tech sector for the last two decades, with the market affected by the devastating effects of 11 September and the economic downturn.

Technology companies continued to suffer a downturn, with the global recession becoming more pronounced. In the UK, Marconi saw its stock price plunge from a high of 872 pence to less than 12.25p, and even the recent upturn in the technology sector has only seen it rise to around 40p. The company has had to lay off tens of thousands of employees. Other significant job losses have come from Motorola, ntl, Vodafone, Compaq -- and BT Retail, which intends to shed 13,000 jobs over the next three years.

Peter Anthony, business development director of IT recruitment consultant Elan Computing, says the last quarter has been the worst he has seen in 20 years. "Twelve months ago the markets were particularly buoyant and it would be fair to say that we were all taken by surprise by the speed and the severity of the downturn. Those companies that were recruiting heavily only a year ago have made large-scale redundancies."

But things are improving -- notably, says Anthony, in the contract market, which is normally the first to suffer in an economic downturn but which also tends to be the first to show signs of a recovery. "October was the first month we saw a pick-up," says Anthony. In fact, the consultancy saw a jump in requests of about 30 percent for the month. "We are expecting this to be sustained," he adds, with many key IT players now saying they expect their markets to improve.

So what skills are most in demand? John Norman of Executive Recruitment Services has noticed a slowdown in the last three months of good quality candidates for specialised roles such as Developer C++ / Derivatives, which demand both financial and technical skills. For banks, maintenance and support of the front office is critical to their operations. Looking after derivatives and data feeds are crucial skills that are always in demand.

At Robert Walters recruitment consultants, Joseph Ghazal has seen a big shift in demand for different types of skill. "With the downturn in the jobs market, a lot of the leading-edge and mission-critical projects have been put on hold," says Ghazal. "So in terms of recruitment there has been a massive shift from J2EE or Java, C++ projects, or at least projects that require those technologies to more database export orientated projects."

Lucy China of the Haymarket Consulting Group started recruiting in September for the Netherlands IT market because the UK market was so flat. Her view is that there is increased demand for project manager work and people with SAP and Oracle skills.

Now is a good time to be looking for new work, because January, February and March are traditionally the best months to move jobs. Senior roles tend to be available in January, and project managers are now being recruited to handle large projects for the coming year.

Not everyone will want to move to a new permanent job. The 'last in first out' syndrome will keep many employees in their current jobs in a climate where jobs cuts have been evident across the board in virtually every level of every sector. If there is a cull, new staff are often top of the list.

Deciding whether to take permanent employment or contract work is always tough, but is usually aided by market conditions. There are now fewer permanent opportunities than there were a year ago, but more jobs in tech support. Contractors, meanwhile, are finding more work in security-related fields following the events of 11 September, as many firms rethink their disaster recovery and security issues.

Despite improving prospects for contractors, many are looking to go permanent. For some, this decision has been prompted by a desire for career progression, while for others it has been the poor state of the market. JP Morgan cut the rates of their existing contractors two months ago by 10 percent. Credit Suisse First Boston cut 10 percent off the rates of their contractors, ING cut 15 percent and Merrill Lynch cut 7 percent.

The transition from contract to permanent is not always an easy one. John Norman of Executive Recruitment Services says employers are not willing to employ contractors full-time because of the fear that they will jump back into the market when it picks up. This is primarily aimed at reducing costs and falls into line with HR policy, he adds. Another consultant says line managers recruiting permanent staff will not look at a contractors' CV unless he or she has had long-term contracts and really good justifiable reasons for wanting to go permanent.

But if you are looking to leave the contract life for a permanent post, the new year could be the time to make the move. The events of 11 September precipitated a big rise in demand for contract workers at the end of 2001, according to a senior Visual Basic consultant at London-based consultancy 1st IT People. "After that, companies were not able to offer as many permanent opportunities, but the work still has to be done," she said. However, the trend is already reversing again. "People are sitting on budgets now, but January and February will see big turnaround with many more companies hiring on the permanent side -- we could start to see contract jobs suffer as a result." This is a view echoed by recruiters elsewhere.

Skills trends for 2002

See ZDNet UK's Christmas & New Year Special for our look at the tech world in 2001 and what's coming up in 2002, plus a shopping guide with reviewers' best buys.

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