Abbott's public sector hiring freeze could hurt ICT skills

Government warned to remember the dangers of the dotcom crash

The Opposition Leader Tony Abbott’s 2010 Budget reply has left some serious questions within the ICT industry around its impact on the ongoing skills shortage within the sector.

The reply commits the Opposition, upon taking power, to implementing a freeze on public sector graduate recruitment for two years and the non-replacement of 6000 senior bureaucrats who retire or resign each year.

According Bob Olivier, director at recruiter the Olivier Group, announcing a headcount freeze, rather than hiring freeze would leave the public sector without the flexibility to manage its skill base.

“I could understand if they said they wanted a headcount freeze… but if you freeze recruitment it’s a really short sighted thing especially if you have key people leaving, or simply don’t have the talent existing at the government agency,” he said.

“Government departments do a lot of graduate recruitment and they do it so they can build from the bottom up. If you pull the plug on that you, it is again a very short sighted thing to do, as you will inevitably suffer down the track."

Olivier also stressed the importance of managing the growing number of senior baby boomer staff who would be retiring in the next couple of years, leaving a “black hole” at the top of many organisations and departments.

“The public service will have quite a few people who fall under that category, and find it hard at the best of times to replace them, so it will leave a vacuum and will be probably even more catastrophic, so it doesn’t bode well at all.”

Bruce Lakin, CEO at the Australian Computer Society (ACS) said the industry organisation was concerned about the potential impact on skills – particularly around those used to maintain the legacy systems common to the public sector.

“We would have concern if Tony’s policy caused the loss of skills relating to established legacy systems as that could expose the government, in terms of the ability to provide services,” he said.

“However, we would support the policy if it brings more focus on the use of ICT to increase the productivity of government because if they are to maintain the level of services they commit to supply, and with less employees, then it’s difficult to see how they would do that without better leveraging their ICT. It’s an excellent challenge for ICT professionals.”

On the issue of freezing graduate hires Lakin said the two-year time frame could allow universities the space to adopt a greater degree of “workplace integrated learning” into their ICT curiculla.

“In the horizon Tony has painted – if we can get universities and industry onboard – the government sector would get the added human capital resource of undergrads with ICT qualifications as interns which might offset the hiring freeze, plus at the end of Tony’s horizon, you will have a pool of ICT graduates much better equipped to enter the workforce at a time when their skills are in high demand.”

Despite this potential upside, Olivier said that the Opposition would do well to remember the dangers of hiring freezes as seen in the private sector following the 2001-02 dotcom crash.

“Organisations that didn’t hire – just put freezes on for a couple of years – constantly struggled significantly after that,” he said. “Whereas what hasn’t happened this time around with the GFC is that organisations have continued to hire – albeit in smaller numbers – because they don’t what that situation reoccurring.”

Olivier said that recent hiring within the public sector had not been particularly high - largely due to cutbacks driven by the Gershon Review and the GFC – so further cuts to hiring could hurt the sector.

Despite this, the Opposition’s plan could potentially be worked around by the public sector - via the use of third party consultants and outsourcers – effectively negating the fiscal saving intended by the hiring freeze, he said.

“It’s all in the wording,” he said. “Yes, there’s no new, fresh hires, but [Abbott] has left open a way to escape this and get around it so it is just political posturing.

“And what about the NBN? There will have to be some exceptions there otherwise the thing won’t get off the ground.”

Earlier in the week the ICT sector appeared to have missed out on a share of a new $200 million Critical Skills Investment Fund announced as part of the Budget.

In addition to the fund, the Federal Government announced it would create 39,000 new training places in sectors facing high skills demand.

It highlighted the construction, infrastructure, renewable energy and resource sectors as priority markets.

No mention was made of the ICT sector despite recruitment firms and analysts warning of a skills shortage in the industry for some time.