ACS: IT contractors increasingly worse off in tough job market

A new survey released by the Australian Computer Society (ACS) paints a sober portrait of the ICT sector for contractors, reporting many independent IT workers are being forced to cut their hourly rates to match tougher competition in an increasingly harsher industry.

According to the 2003 ACS Remuneration Survey, 24 per cent of contractors and consultants responding to the survey were forced to decrease their rates between April 2002 and April 2003 in order to keep working. Some 46 per cent said they had kept their rates at the same level over the past 12 months, while the remainder said they had increased their rates.

The combination of these rates resulted in a median rate increase of zero for these professionals, the ACS report stated.

Contracting rates reported by respondents varied considerably, ranging from $50 to $100 per hour, depending on the work being undertaken, according to the report.

Two-thirds of those identifying themselves as contractors were working as consultants at an average rate of $75 an hour, project managers at $90 an hour while programmer/analysts attracted an average $65 per hour.

It wasn’t good news for salary-based ICT professionals either, with the report finding average ICT salaries had risen by 3.1 per cent over the 12 months to 2003 – short of the Australian Bureau of Statistic’s (ABS) consumer price index (CPI) growth of 3.4 per cent and significantly lower than its overall Average Weekly Earnings increase of 4.7 per cent. The average growth rate recorded in the ACS' s previous survey (May 2001 to May 2002) was 4 per cent.

Of those ICT professionals surveyed by the ACS, private sector IT employees experienced 3.1 growth in remuneration paid. Public sector employees were found to be the best off, matching CPI growth rates quoted by the ABS. Employees in the education sector fared worst, recording 2.3 per growth over the 12 months.

ACS national president Richard Hogg said the slackening growth rates represented a downward trend across the ICT sector, which began to surface 15 months ago.

“The average increase of 3.1 per cent is the lowest recorded in the 11-year history of the ACS salary survey,” he said.

“But it comes as no surprise given the current situation in the ICT sector.

“The results show that ICT professionals can no longer demand a premium for their knowledge and skills compared to other professions, that salaries are remaining static and that the tough times are affecting both employed staff and independent contractors.”

The survey, which was conducted for the ACS by the Association of Professional Engineers, Scientists and Managers Australia, was based on responses from 1612 ACS contract and salaried members across Australia. Contractors and consultants represented about 35 per cent of respondents.

On the positive side, Hogg said the ACS expects the ICT market to turn around in the next year, driven by the “gung-ho” attitude of the government towards growth in the economy.

But, Hogg warned, “rates will stay relatively low – we won’t go back to the late 90s and early 2000 rates when $200 an hour was normal”.

“Those days are gone, with the exception of niche markets, such as large-scale strategic planning, which requires very focused skills, and large consulting firms – not a one-man band,” he said.

The survey also looked into the skills of respondents, finding nearly two-thirds of programmers and analysts possessed programming knowledge in at least five major applications. Of these, the most popular was SQL at 67 per cent. Other widespread skills set included Cobol, C++, Unix, Oracle, Visual Basic and Java.

ICT LEVELS OF INCOME
Job Function Median Total Package
General Management $147,225
Sales & Marketing $129,028
IT Management $111,488
Consulting $109,000
Project Management $103,968
Research & Development $94,985
Database Administrator $92,923
Systems Management $90,470
Project Leader $87,284
Research & Teaching $74,597
Programmer/Analyst $74,597
Analysis & Testing $73,488
LAN Manager $70,850
Computer Support $64,406
Teaching/Training only $64,077
Figures taken from 2003 ACS Renumeration Survey

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