Australian IT sector sees skills glut

New research by the Australian Department of Employment has shown that the domestic information technology market is a long way from experiencing a skills shortage, with an average of almost 50 applicants per advertised job in the sector.
Written by Leon Spencer, Contributor

Professional information technology job vacancies are among the easiest for employers in Australia to fill, according to the latest research by the country's Department of Employment.

Far from representing what is sometimes identified by the nation's recruitment industry as a sector afflicted by an increasing skills shortage, the domestic IT market is seeing plenty of suitable applicants for advertised jobs -- an average of almost 50 per vacancy, in fact.

According to the Department of Employment's latest figures, the proportion of vacancies filled by IT professionals in Australia for 2014 was 84 percent -- a much higher result than in building, construction, automotive trades, and food trades.

The average number of applicants per professional IT vacancy stood at 49.9 -- five of which were considered "suitable" applicants -- up by 18 applicants per job compared to the 2013 figures.

Vacancies for accounting, engineering, IT, and resource-related occupations attracted particularly large numbers of applicants (in excess of 35 per vacancy).

Electrotechnology and telecommunications trades recorded the largest rise in the number of applicants, from 15.1 per vacancy in 2013 to 17.3 in 2014.

The toughest jobs to fill, according to the research, were in the trades and building professions, along with hairdressing and the automotive and food trades.

According to the research, the average number of suitable applicants has not changed markedly over the past few years, but rather employers are now more selective, overlooking some applicants who would have been considered in a tighter labour market.

While the average number of applicants per IT job has risen compared to 2013, the department's findings mirror the results from its Skills Shortages Australia 2013-2014 report (PDF), with the IT industry representing one of the industry areas not facing a shortage.

The Department of Employment's reiteration that the local IT sector is being well served by the number of available skilled professionals in Australia comes at a good time, with new research from Clicks IT Recruitment indicating that companies are moving to increase IT staffing.

"Australia's steady improvement in economic outlook has fed through to IT budgets, particularly in the public sector," said Clicks IT Recruitment's managing director Ben Wood. "This growth is due to an increase in projects that focus on digital transformation, cloud uptake, and refreshing core systems."

Meanwhile, Clicks' 2015 Recruitment Report indicated that there has been a significant reduction in plans to hire IT workers on 457 Visas -- down from 12 percent of respondents in 2014 to 4 percent this year. Sponsored 457 Visas allow skilled overseas workers to come to Australia to work for an approved business for up to four years.

The hiring of IT graduates was the lowest in five years, a trend that Clicks refers to as "mystifying", while external IT contractors are becoming more highly favoured than in-house employees.

"Whilst hiring demand is growing overall, respondents favour contractors over permanent staff. In fact, those organisations looking to hire permanents is less than half the level of five years ago," said Wood.

According to Clicks' 2015 Recruitment Report, although IT hiring demand is on the rise, salaries in the sector are set to rise by a "miserly" 1.54 percent.

By contrast, the annual minimum award wage increased by 3 percent in the financial year ending 2014, under the direction of the Australian Fair Work Commission.

The findings come just five months after another local IT recruitment firm, Greythorn, suggested that the local IT industry could be heading towards a "huge" skills shortage within the next five years.

In July, Greythorn revealed that a May survey of almost 3,000 IT professionals indicated that Australia was at risk of losing what IT professional workforce it had to opportunities overseas, with around 66 percent of IT professionals under 30 stating that they would consider a move internationally if a suitable opportunity arose.

According to Greythorn, the combined impact of fewer graduates entering the IT industry and more graduates considering leaving would further compound the skills shortage highlighted in its research.

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