Recovery in IT recruitment on the way in 2004

Forecast at ATSCo January meeting

A recovery in the IT recruitment business is on the way, but not until next year, according to Ovum Holway Research Manager Anthony Miller.
Speaking at the January meeting of the Association of Technology Staffing Companies* (ATSCo) Miller forecast a modest growth in the IT recruitment market of between 2% and 3% in 2004. This would follow a fourth year of negative growth in 2003.
Miller stated that normally he would have expected the recovery in IT recruitment, when it comes, to be at a faster rate than he was now forecasting for 2004 and 2005. The difference this time is that the primary driver of growth will be outsourcing deals.
Miller explained that the staffing issues involved in outsourcing deals (transferring workers from one company to another) do not offer the most lucrative opportunities for recruitment companies.
Survival strategies suggested by Miller were:
Other recruitment markets
Solutions offerings
HR outsourcing
Managed Services
Business Process Outsourcing
Public sector business.
Commenting on the Ovum Holway presentation Peter Flaherty, Chairman of ATSCo, said that the meeting was part of an ATSCo programme to ensure that its members were best equipped to deal with difficult market conditions.
Businesses in this industry need to be running themselves at a profit in current market conditions - not hoping for an upturn that may be some way off.

We have a very successful series of Finance Directors' Forums, for example, and we recently published the first of our detailed quarterly surveys into IT contractors' rates which indicate the first tentative signs of a recovery in confidence following the recent economic slowdown.
The survey shows that since September there has been a significant increase in the market value of key skills, with the top five (C , Java, MS SQL Server, MS Visual Basic and Unix) showing a 10% increase in annual salaries and 14% increase in temporary contract rates.
We also keep members abreast of developments in EC and UK legislation, as well as lobbying hard on behalf of the industry.

Flaherty added: Anthony's presentation gave our members some very useful insights but I personally would expect the recovery in IT recruitment, when it comes, to be faster than Ovum Holway are currently forecasting.