Contractors flee Canberra in search of private money

Continuing skills shortages placing strain on government ICT projects

Contractors have left Canberra and the public sector behind as they seek higher pay in Sydney and Melbourne, according to the latest statistics from recruitment firm Peoplebank.

The Peoplebank Intermedium Federal ICT Labour Hire Index for April indicates a steep decline in the number of contractors available for public sector work in Canberra. While the number of labour hire contracts reached a peak at the beginning of the 2008/2009 financial year, statistics derived from the AusTenders website show that the value of contracts has dropped significantly from $112,594,246 in the second quarter of the 2007/2008 financial to $69,985,997 in the second quarter of the current, 2009/2010 financial year. This comes despite a continuing rise in contract rates.

“It’s a volatile market: where the downward trend of recent years is likely to be replaced, quite rapidly, by an upward trend in both demand and rates,” Peoplebank acting chief executive officer, Jeff Knowles, said in a statement.

According to the hire index, skills shortages are particularly being seen in Java/J2EE and .NET developers, as well as business analysts and SharePoint maintenance staff.

“As we are experiencing a net migration of contractors away from Canberra, there is a substantial risk that there will be too few skilled ICT contractors available to meet the Government’s needs."

This would, in turn, place further pressure on contract rates and on general projects by government department. Several agencies have already flagged a deficit in the number of skilled staff required for existing and future ICT project, with the Federal Government issuing a whole-of-government workforce strategy to better organise ICT hires across departments.

A raft of new ICT projects and consolidation regimes inspired by Sir Peter Gershon's review of whole-of-government ICT systems has already placed strain on the hire pool in the past year. The private sector has also seen some difficulty in hiring both contractors and permanent skilled ICT staff with the amount of jobs ads only beginning to stabilise in the latter part of this year's second quarter.

Despite this strain, neither the Government or the Opposition paid attention to the potential ramifications in the 2010/2011 Budget.

Knowles said that, even if government departments begin to rely on large ICT vendors for systems and services, these companies may begin to feel the same pressures for the private sector job market.

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