August 2022 I.T. & Digital Market Update

Maree Hayes & Chris Reid • Aug 16, 2022

WHAT'S BEEN HAPPENING?


Regional roundup


In Auckland, demand for talent remains high, while availability remains low. However, we have seen a shift in hiring behaviours, with more businesses focusing on the outcomes they need to meet their business objectives, as opposed to remaining hung up on specifically hiring either a permanent or contract team member.


Large pockets of employers have moved to hybrid work environments in the transition to a new normal post-Covid lockdown. We are seeing an increase in employees being required to work one or two days in the office, with some working from home still a common theme for all organisations in some form. Those candidates required to return to the office, with less flexibility, are certainly more likely to be looking at new opportunities. 


In Wellington, the market continues to be tight for candidates from both a permanent and contract perspective. We’ve seen the candidate market tighten again in Wellington, with candidates saying their current employers are now responding to the hot market and focusing on retention, providing them with the right opportunities, including better flexibility and benefits, which is still increasingly important for candidates. 


Despite this improved flexibility, we are also hearing of organisations who have embraced WFH asking people to return to the office 2 or 3 days a week to help increase the economic recoveries for retail and hospitality. 


We see Government organisations particularly affected by the market, struggling to attract staff due to being restricted to offering mid-point range salaries to potential employees. 

Permanent Demand, Contract Supply

We continue to see permanent work come in, especially in BAs, Test, and Development. In saying that, the demand is in permanent, but the supply is in the contract market. 


With an increased supply in the contract market, some clients have shifted from permanent requirements to contract requirements and are open to considering either contract or permanent when hiring. Those who have taken this approach are getting the business outcomes they need, focusing on the outcome, as opposed to a fixed hiring ideal. 


We have more people wanting to enter the contract market, with clients more than happy to wait four weeks for the right talent considering the current candidate shortages. Clients struggle to fill fixed-term roles as they don't offer the security of pay that permanent or contract roles do.

Financial Services Transformations

Many companies in the financial services space are hiring, with significant transformations underway, further driving demand for tech talent. The financial sector is certainly not unfamiliar with the various disruptive forces shaping the future of the industry, and some of the focuses for organisations in this sector include maximising the use of process automation, AI and machine learning, along with ensuring they are prepared and fit for purpose heading into Web3 (3rd Iteration of the World Wide Web).

Post-Covid Brain Drain

With Covid-related restrictions dropping worldwide, we are now seeing a clear increase in those leaving our shores for international opportunities. Some are leaving for travelling and delayed OEs, whereas others haven’t seen loved ones in a long time or are relocating back home at last. 


Due to the flexibility of many tech roles, responsibilities can be transferred to a new location along with the talent, and global barriers have been reduced for all. Staff no longer need to resign if planning an extended trip overseas; some will retain their jobs even when relocating abroad. 


Equally, international companies continue targeting NZ-based candidates with extremely large offers, tempting them away from the local market. 


Whilst the ‘young’ brain drain is almost a given and will likely continue, we are seeing smart startups work hard to snap up good graduates and secure this talent before they look to move overseas. 

Movement at the Borders

In terms of attracting talent into New Zealand, the overall AEV (Accredited Employment Visa) has kicked off with many organisations completing (or completed) their AEV to ensure they can hire offshore candidates.


Whilst the accreditation process has reportedly been smooth for most, since the Job Check opened on 20 June, very few of the high number of applications have been approved. 


Issues facing businesses around the Job Check primarily pertain to advertised hours and wages not being listed or not matching the IEA or employers being unable to prove candidates possess the skills required for the role. 


At Recruit I.T., we have a dedicated Global Talent Solutions team that works across mobilising international talent for our clients, both on and offshore, so please reach out to our experienced team for advice and guidance in this space. 

The Big Sick

First, it was the big resignation, and now it is the big sick! A second Covid wave around New Zealand, compounded with a worse than usual flu season, has been affecting workplaces resulting in increased illness and absenteeism. This has had a flow-on effect on recruitment, with hiring managers impacted and unable to fast-track interviews and offers.

Diversity and Inclusion at the Forefront

New Zealand workplaces are becoming increasingly aware of the importance of diversity and inclusion in the workplace and implementing better values, policies and initiatives to support their employees in this space. 


As well as better initiatives to support gender balance and fair hiring practices, we are also seeing innovative and new policies supporting the LGBTIA+ community, such as special leave for those transitioning. 


The Government recently announced Te Mahere Whai Mahi Wāhine Women’s Employment Action Plan, launched on 30 June 2022 by Minister for Women Hon Jan Tinetti – to support all women in Aotearoa to fulfil their potential.

Employers Adjusting Hiring Practices

We are seeing an increase in our customers moving quickly to make offers and working to ensure their recruitment and offer processes are as smooth and effective as possible. As a result, we have seen a lot less candidates drop off during the offer stages. 

More and more employers are stepping up and offering candidates the salary they are asking for, rather than waiting around and getting in a bidding situation where offers are being made back and forth. 


This comes down to the continual dialogue we’ve been having with our valued customers around the market and ensuring we continue to advise them on best practices to ensure they are positioned to capture top talent.


One area we still identify as a weakness is where clients are hampered by only being able to offer fixed-term to candidates rather than permanent or contact. With so much choice in the market, a fixed-term offer simply does not hold enough appeal for most candidates. 


Improved recruitment practices must also extend into onboarding and inductions, as these are incredibly important in setting a platform for success for a new employment relationship and getting value from your investment in recruitment. Candidates who have not had a great experience in their first three months are not waiting around and may already be considering leaving.


With such a tight talent market, retention is still critically important, and as employers recognise the importance of adjusting salaries and benefits to hold on to valued employees, we are ensuring we advise candidates to speak with their current employers before looking elsewhere, especially if their primary motivator is salary. 

CONTRACTOR CHAT

The contractor market remains extremely buoyant, and contractors are essentially able to pick and choose who they want to work for, as they are so heavily in demand. 


Some organisations that are stubbornly sticking to paying lower hourly rates are losing contractors to others offering higher rates – and we are still seeing many contractors opting out and finishing their contracts early for more lucrative offers. 


Due to contract rates being the highest in the market for years, we are also seeing more contractors taking a break between contracts rather than working for an entire year.

With so much choice, candidates are also more discerning and more interested in working on meaningful projects that provide a feel-good factor for them.


Due to the competitive contractor landscape – especially in Wellington – some contractors are being offered extensions through until June next year, with clients looking to lock in the talent early rather than risk missing out and putting business projects and priorities at risk.

TOP TALENT REQUIREMENTS

As expected with the current market conditions, demand is high across all role and skill areas. We are seeing specific tech stacks being asked for, with some clients not being able to train in certain areas. We are still seeing an ongoing, significant demand in data, test, BA’s and development. 


  • Business Analysis – As always, the BA market continues to be buoyant, with candidates constantly in demand. 
  • Security – a continued emphasis here, particularly within the Government space
  • Architecture and Testing – both permanent and contract candidates are in high demand in these particularly tight markets. 
  • Test Automation – with more and more clients trying to automate as much as possible, experienced test automators are sought after.
  • Development – it is not slowing down in terms of dev requirements, with requests most typically across Java, .Net, and various JavaScript frameworks. 

LOOKING AHEAD

In the Government Space

New budgets came into effect on 1 July, so government organisations have begun kicking off new projects – particularly after the budget announcement. The Government has committed to health – with Health New Zealand coming into operation on 1 July. Education and Transport will also benefit from more investment.


Large programmes will look to increase their headcount, and some agencies will need to factor in replacements where candidates have indicated they are moving to increase their pay due to the salary freeze in Government.

Lingering Covid Impacts


Orange light settings seem set to stay put for the foreseeable future, despite many companies hoping for green so they could return to ‘normal’ or full operations. Many large organisations are still operating on bubble systems or rosters.


This, combined with the ‘new normal’ of flexible and remote working, means more of our clients are looking at new and improved ways for teams to collaborate – both online and in person – as some businesses are finding the cultural aspects of working together in a post-Covid world challenging, which can also result in more staff turnover. 


Events Return


We are seeing the slow return of large-scale events in the tech industry, with the Hi-Tech Awards held early August at TSB Arena in Wellington, and the CIO Conference and Awards scheduled for November 2022 at new Christchurch Convention Centre – Te Pae.


We expect to see more summits and tech-focused events continue to fill the calendar throughout the end of 2022 and into 2023, as the industry gets used to socialising and celebrating together again. Check out this guide to upcoming events. 


A FINAL NOTE FROM OUR DIRECTORS

Employers must ensure they are not complacent and continue to think innovatively, perhaps even globally, to ensure they can remain competitive in this challenging market.


At the same time, focusing on meeting your existing teams' needs and refining retention strategies remains important, as you can be assured that even your newest recruits will be targeted by both New Zealand and offshore companies.


As always, we continue to nurture our long-standing relationships and talent pools to ensure that despite the tight market, we are delivering the best recruitment solutions for our clients and candidates.


If you have any questions, or would like any advice regarding hiring talent for your team or business in the current market, reach to to Maree, Chris, or any of our team members for a confidential discussion.



Re-entering the Job Market: A Guide for Experienced IT and Technology Candidates in New Zealand

27 Mar, 2024
Entering the job market after many years can be a daunting task, especially in the fast-paced world of IT and Technology. With advancements happening at breakneck speed, it is understandable to feel overwhelmed when suddenly thrown into starting your job search journey anew. However, there are simple steps you can take to get you started, ease the transition, and help you in landing your new dream job. At Recruit I.T., we've seen many experienced candidates successfully navigate this path, and we're here to share some valuable advice with you. 1. Revamp Your CV Your CV is your ticket to securing interviews, so it is crucial to ensure it’s up-to-date and tailored to the roles you are applying for. If yours is still in typewritten format and doesn’t include what you’ve been up to for the last 10 years, now is the time to get it updated. Ensure it includes your most recent and relevant roles, delete your high school work experience, and highlight your relevant experience, skills, and achievements prominently, focusing on how they align with the requirements of the positions you're targeting. If you are unsure where to start, collaborating with a specialised recruiter like Recruit I.T. can provide valuable insights and guidance in crafting a compelling resume. 2. Leverage Your Network Don't underestimate the power of networking, especially in the tight-knit IT and Technology community in New Zealand. Reach out to former colleagues, mentors, clients, and industry connections to let them know you're actively seeking opportunities. Attend industry events, meetups, and conferences to expand your network further. Many job opportunities are filled through referrals, so make sure to stay connected and keep your network informed about your job search. 3. Explore Both General and Specialised Job Boards You may have found your first job via a newspaper classified, but times have changed! While general online job boards like Seek and Trade Me, as well as LinkedIn Jobs are a good starting point, consider exploring specialised job boards focused specifically on IT and Technology roles, and register with a relevant recruitment agency like Recruit I.T. as specialised platforms like our website job board cater to this niche market, offering a curated selection of job openings tailored to your expertise. By targeting your search on these platforms, you increase your chances of finding roles that align with your skills and career goals. 4. Prepare for Interviews Brush up on your interview skills to ensure you make a strong impression during the selection process. Research the company and the role thoroughly, familiarising yourself with STAR and behavioural-based interview techniques (there is lots of info online!), practising common interview questions, and preparing examples that highlight your abilities and experiences. Additionally, familiarise yourself with the latest industry trends and developments to demonstrate your awareness and relevance in the field. It also won’t hurt to review and brush up on your verbal and numerical reasoning skills – once again, there are lots of free resources online to help you practise these types of tests/exercises. 5. Update Your Skills The IT and Technology landscape evolves rapidly, with new technologies and methodologies emerging regularly. Whilst you’ve developed your abilities on the job, do take the time to update your skills and knowledge with formal certifications and training to remain competitive in the market. Consider enrolling in courses, attending workshops, or pursuing certifications relevant to your field. Not only does this demonstrate your commitment to growth, but it also enhances your attractiveness to potential employers. 6. Be Flexible and Open-Minded The job market can be unpredictable, so it's essential to remain flexible and open-minded throughout your job search. Be willing to consider different roles, industries, or a short-term contract opportunity that may not align precisely with your previous experience. Embrace new challenges and opportunities for growth, as they can lead to unexpected career advancements and personal fulfilment. 7. Seek Guidance from Experts Navigating the job market alone can be overwhelming, especially after being out of the game for some time. In many cases, if your position has been made redundant, your organisation may provide outplacement services to offer help with CV crafting, interview prep, job search, practise testing and in some instances will also provide free access to training platforms. Consider seeking guidance from experienced specialised recruiters like our Recruit I.T. consultants. Our team possesses in-depth knowledge of the IT and Technology industries, along with extensive networks and resources to support your job search journey. From resume optimisation to interview preparation, we can provide valuable assistance every step of the way. Utilise all the free and skilled help you can access! 8. Embrace Your Experience and Life Skills It's easy to feel apprehensive about re-entering the job market after a long tenure with a single company or a prolonged absence, but remember to embrace the wealth of experience and life skills you've accumulated over the years. Your past successes, whether in your career or personal life, have equipped you with valuable insights, problem-solving abilities, and resilience that will be sought-after and appreciated by employers. While you may not have a recent job application or job hunt history, your track-record speaks volumes about your capabilities and adaptability. Have confidence in your abilities, and don't underestimate the value you bring to the table. Highlight your accomplishments and transferable skills during interviews, showcasing how they make you an asset to any organisation. By owning your experience and life skills, you can instill trust and credibility in potential employers, setting yourself apart from other candidates in the competitive job market. Embarking on a job search journey after many years can be a challenging yet rewarding experience. By revamping your resume, leveraging your network, exploring job boards, preparing for interviews, updating your skills, remaining flexible, seeking guidance from experts, and remaining confident in your experience and skills, you can increase your chances of success in the competitive New Zealand job market. Remember, you are not alone in this journey, and with the right support and resources, you will find your next opportunity. Our team are always happy to shout the coffee and provide some expert friendly and constructive advice to help you get started on your job hunt, so reach out anytime!

March 2024 I.T. & Digital Market Update

By Kaleb Leeming • 11 Mar, 2024
Field at Present: From a Director’s Perspective Generally, we have seen a slow start to the year, continuing the trend we saw in the latter half of 2023. Despite feedback from the market that suggested a stronger bounce back, we have yet to see this in the market at present. There are pockets of activity - primarily back-fills to existing hires. As we gear towards the backend of the government’s 100-day plan, we should see the firming up of new projects and programmes, which will likely require capability to deliver these pieces of work. Unfortunately, we are still seeing organisations across a range of industries forced into making rounds of redundancies and other operational cuts or changes to help them operate more leanly during challenging times, and we’ve even seen this in the recruitment industry itself.

The True Cost of a Contractor

By Kaleb Leeming • 14 Feb, 2024
With the dynamic business landscape, many companies are embracing flexibility and adaptability as they navigate the ever-changing market. As someone who has worked in the technology and recruitment sector for a while, I’ve come across a common misconception that I’d like to address: the perception that contractors are significantly more expensive than permanent employees. I'd like to give light to the true cost of hiring a contractor and explore why it might be more budget-friendly than you think. Let’s start by acknowledging the elephant in the room – the hourly rate. It’s no secret that contractors often come with an hourly rate that seems higher than what you’d pay a permanent employee. But here’s the thing: an employee salary is just the tip of the iceberg. When you hire an employee, there’s a whole set of additional costs and overheads that can significantly impact on your bottom line. Let’s break them down: 1. ACC (Accident Compensation Corporation) When you employ a permanent employee, you’re obliged to contribute to ACC levies. These can add up and represent a substantial ongoing cost to your business. Contractors, on the other hand, handle their own ACC payments, freeing you from this financial burden. As I write this it sits at approx. $0.63 per $100 of payroll. Example being, a $100K Salary = $630 per annum. 2. Kiwisaver Permanent employees are entitled to Kiwisaver contributions from their employers. While it’s a great benefit for them, it’s an added cost for your business. Contractors manage their own retirement savings, releasing you from this expense. At the minimum contribution of 3% that is $3,000 based on a salary of $100,000 per annum. 3. Training and Development Investing in the professional growth of your employees is essential. However, it can be costly and time-consuming. Contractors typically bring their existing skills and experience to the table, minimising the need for extensive initial training and ongoing development programs. Various benchmarks have this between 1% - 5% of an individual’s salary. Based on a $100,000 per annum this could be between $1,000 - $5,000 per annum. 4. Fringe Benefit Tax Providing certain benefits to your employees can trigger fringe benefit tax liabilities. Contractors are not subject to this tax, which means you can offer perks without worrying about additional financial implications. 5. Benefits Permanent employees often receive benefits such as health insurance, paid annual leave, and more. While these are important for staff retention, they can substantially increase your personnel expenses. On the other hand, contractors manage their own benefits and extras, giving you more predictability in your budget. 6. Insurance A business is responsible for looking after professional indemnity and public liability insurance which cover their permanent employees. On the flip side, contractors typically have their own insurance coverage, reducing your insurance-related costs. 7. Overheads Beyond the salary, permanent employees come with a host of overheads like office space, equipment, and administrative support. Contractors usually operate independently, sparing you from these additional expenses. 8. Productivity It is not as simple as multiplying a contractor’s rate by the number of hours in a week, and then extrapolating that out for the year. They only get paid for the hours they work, which doesn’t include any annual leave, sick leave, or public holidays. You only pay them based on what the hours they actually worked. So, what’s the bottom line? Hiring contractors can be a cost-effective choice when you consider the bigger picture. While the hourly rate may seem higher, it’s essential to factor in the myriad of savings associated with not having to manage all the costs and overheads that come with permanent employees. Don’t get me wrong – permanent employees are valuable assets to any organisation. They bring stability, commitment, IP retention, and a sense of belonging to your team. But the key is understanding the differences between contractors and permanent employees and leveraging them to your advantage. Think of hiring contractors as a strategic move that provides the flexibility to scale your workforce up or down as needed, without long-term financial commitments. It’s not about one being better than the other; it’s about making informed choices that align with your business objectives. So, the next time you consider bringing in a contractor, remember the true cost isn’t just about the hourly rate- it’s about the holistic value they bring to your organisation.
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