Oakton, SMS slow 2009 hiring plans

Two fast-growing Australian IT services firms have planned a more cautious approach to hiring in 2009 to reflect unpredictable conditions.
Written by Liam Tung, Contributing Writer

Two fast-growing Australian IT services firms have planned a more cautious approach to hiring in 2009 to reflect unpredictable conditions.

Australian IT services firm Oakton has quadrupled staffing levels in the past three years, but its CEO Neil Wilson yesterday said in 2009 it would be more cautious and adopt a greater focus on "all things around cost".

"As I reported at our annual general meeting this morning we're expecting to grow this year, but with stronger caution and less predictability given the current climate," Wilson told ZDNet.com.au yesterday.

Market volatility and the credit crisis had negatively impacted some clients' spending, while others remained stable for Oakton, the company today told investors.

Wilson said Oakton was "minimally exposed to the finance sector", however, it represented 16 per cent of its 2008 revenue — its third largest source.

He said greater general unpredictability meant Oakton would focus on more stable sectors such as state and federal government. Wilson said he expected federal government spending — currently 22 per cent of Oakton's revenue — to perk up in the second half of the year, while state government infrastructure projects held great promise.

Missing from Oakton's 2009 plans, however, are large acquisitions on the scale of Acumen, which in 2007 doubled its staff levels from 457 to 1,003. Oakton currently has 1,294 staff. Over the course of the year it has shed 17 contractors, but has picked up 22 permanent staff.

Wilson said Oakton had not made any recent redundancies, but admitted there have been "some roles that were not replaced". In addition, Oakton has stated plans to introduce a "just in time" hiring policy as it conducts an extensive cost review.

Tom Stianos, CEO of local IT services company SMS Management and Technology, expressed a similarly cautious attitude to hiring in the coming year.


SMS M & T CEO Tom Stianos
(Credit: SMS M & T)

While SMS has "significant bids" valued between $15 million to $40 million in the pipeline totalling around $198 million if successful, Stianos said it would be more prudent over the coming six months.

"We're being prudent and recruiting people as we need them rather than doing so in advance. You could say we're not ramping up [hiring] until the fat lady sings," he said yesterday.

Stianos, though, admitted that turmoil in the finance sector had caused the demise of one investment bank customer. "There's no further exposure," he added.

"We've already told the market that growth this year will still be there, not another 40 per cent increase, but still growth," he said.

Two major projects Stianos said SMS had partially engaged, and that would require more people if it came through, were its current bid for a slice of Defence's $8 billion Airwarfare Destroyer project and BHP Billiton's Olympic Dam mine operations in South Australia.

SMS has also pegged hopes on opportunities in core banking system replacements underway amongst Australia's top four banks. Both National Australia Bank and the Commonwealth Bank of Australia have said that current financial conditions would not result in delays to existing schedules.

"Core banking won't be delayed by current market crisis," a CBA spokesperson told ZDNet.com.au today.

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