Contract rates for CIOs and IT managers have plummeted by up to 37 percent from last year, according to an annual remuneration survey from IT placement firm Ambition Recruitment.
The alarming results - which vindicate a slew of mail to Computerworld and clash sharply with other recruiter statistics based on job ads - are contained in Ambition's Market Trends and Salaries report which canvassed 194 CIOs, CTOs, CFOs CEO and IT managers in national positions based in Sydney and Melbourne.
According to Ambition's daily charge sheet (what it charges enterprises per day for IT talent), contract CIO rates took the worst hit, with daily pay rates of between $1200 and $1800 (December 2003) plummeting to between $760 and $2000 (December 2004).
This equates to a 36.66 percent freefall for entry-level CIOs, while upper-end CIOs collected a rise of 11.11 percent. However, in median terms contract CIO rates are 12.77 percent lower than at the same time last year.
Contract IT managers fared little better. In December 2003, Ambition was charging between $1000 and $1300 daily. It is now between $800 and $1250, or a fall of 20 percent and 3.8 percent respectively and a median fall of 8.1 percent.
Figures from the Australian Computer Society, the Information Technology Contracting Recruitment Association and numerous IT placement agencies, indicate that between 25 and 35 percent of all IT positions in Australia are staffed by contractors, with a skew to as high as 60 percent in senior IT project-related roles.
Jane Bianchini, Ambition recruitment technology director, said the reason for the fall in IT management contractor rates is twofold. Firstly, permanent roles are being offered as companies come to regard contractors as a potential security risk and secondly as part of a seasonal, three- to five-year refresh cycle to secure technology staff internally.
"What is interesting is that in 2004 we did see an increase in the number of contract staff, but in areas of support - not in areas of control," Bianchini said.
"The shift has been in the contract area, because those that were previously on contract were offered permanent positions within the organizations; there has been a change in the supply and demand of contracting.
"There are not many opportunities around now where organizations pay contracting roles, especially near to Christmas when an organization wants someone permanent to immediately grasp the technology challenges and come up with solutions over the January period to go directly into projects in the New Year."
The falls may also be part of an east coast correction. On the west coast of Australia, contracting positions have either remained steady or increased, according to Bruce Henderson, director of Robert Walters recruitment.
Henderson said that he has not seen a backward trend in the IT industry, countering that rates are moving upward in the West.
"Contractors are savvy enough to know their level of demand, and their rates," Henderson said. "It could be a strategy by key players to try and have contractors they deem too expensive to get a haircut."
Australian Computer Society president Edward Mandla, said that after 10 months of good news, Australian companies are now in a position to consider permanent, full-time staff.
"Late last year and early this year we started to see positive signs as organizations put on more contractors until they were sure the market turned around; now organizations have been stable and can consider their permanent employees," Mandla said.