IT trends

Other trends in the IT industry

European trend

Of particular interest to the Commission of the European Communities were the number of people working in multimedia and other computer-related (or Information Technology) services, which nearly tripled in size since 1980. The Report stated in part that:

"Employment in consumer electronics, data processing and telecommunications equipment manufacturing has clearly declined. Employment levels in the components industry and telecommunications services has remained stable. By contrast, employment in software and computer services has seen steady growth, almost tripling its size since 1980 and employing nowadays around 750,000 workers in the [European] Union. This sector remains an area in which there are particularly high hopes for employment growth, especially in new high-skill, knowledge-intensive services, such as multimedia software and end user training."

In the UK alone, the Blair government has already spent over AUS$3.5 billion on retraining teachers and getting schools to be fully equipped with computers. Soon the time will come when UK students without laptops of their own will not be considered for the top stream at schools. (1)

Australian trend

Glimpses of a similar trend in Australia may be observed in various career reference books. For example, on page 144 of the 1993 Job Guide for New South Wales, it is stated that Desktop Publishing (DTP) is:

"A rapidly growing field of employment."

In fact, many Australian business professionals are saying that Information Technology (IT) will soon be the major industry of the future. Already the value of the IT industry has grown from less than $20 billion in 1990 to over $33 billion in 1995 (2).

And now it is said to be worth well over $1 trillion. Who knows? The IT industry may already be the major industry of the 21st century right now!

The serious shortage in skilled IT professionals

As a consequence of the huge demand being placed on the IT industry over the past 20 years, businesses have begun recruiting skilled IT professionals. One only has to glance at the employment section of newspapers to see how true this is with up to 90 per cent of jobs needing computer skills (3). Clearly anyone with good computer and Internet skills are ahead of the pack from an employment perspective.

Despite the glut in IT-related jobs filling the market, the void in human resource created by the rapid expansion of the IT industry is not being filled as quickly as many businesses and educational institutions would want.

For example, the demand for Web designing and e-commerce-based skills is said to be the most sought after skills in the marketplace today. Yet only a few quality web designers are available to handle a fraction of the jobs in this particular field. According to reporter Louise Banbury:

"The demand for Web skills is still growing, if recent figures from US research firm RHI Consulting are anything to go by. In a survey of 1,400 companies, Web development skills were for the first time the most sought-after skill set in IT departments.

These figures are likely to map to the UK, and with UK e-commerce worth billions in the next few years (according to the DTI), the demand the designers and developers can only keep growing. But the companies that we spoke to expressed frustration at the lack of graduate skills." (4)

Finding people with good Web page designing skills is now so difficult that employers are no longer expecting potential employees to have a degree in graphic designing at art school. As Chairman of the well-established Web-design company called Lateral (www.lateral.net), Jon Bains, said:

"We don't look at degrees at all - in my experience, the best designers didn't go to art school." (5)

Company director of the Web design agency Interface New Media (www.interface-newmedia.com), Neil Jones, agrees and adds:

"It's amazing the number of so-called designers who come along without any URLs to show us." (6)

Web designing is certainly one area of the IT industry where graduates with no experience could ask for A$30,000 or more from employers. Or designers with two years experience could expect to earn over A$48,000 (or $A85/hr for 6 months temporary work). This is quite surprising considering that graphic designing was supposed to be a traditionally poorly paid area of employment! Even simple HTML document markup work for web distribution with very little graphic designing requirements could see people earn over $A45/hr for a 12 month contract. (7)

To combat this critical shortfall, IT companies are implementing a range of incentives to attract and recruit skilled IT professionals. Among the strategies include allowing IT staff to work from home, giving away free PCs and laptops, guaranteed career advancement, free on-the-job training, providing special discounts on Internet access and interest rates on various loans, and training more women to join the IT workforce. As Cheryl Currid wrote in Web Techniques: Solutions for Internet Professionals:

"With a tight labor market and the increasing need for a computer literate work force, companies have begun distributing free (or heavily discounted) PCs to their employees.

...Aside from using PC perks as a hiring tool, several companies have found that they can get additional nonovertime work from employees. According to one study my firm conducted a few years ago, a corporation can get up to 12 hours of extra work per week from employees who are connected from home. People spend personal time answering email, doing extra research, and polishing reports. Simple math will show you that making a home-based PC and Internet connection part of the job is a good investment.

Another benefit is that workers take off-duty time to hone their skills. Employees are more likely to learn new software and techniques if they have PCs at home. The hassles and hustle of a normal workday makes it difficult to end users to learn efficiency techniques. But the comforts of home make for a better learning environment." (8)

Will the IT companies succeed in their aims? We can only wait and see.

UPDATE
December 2002

A period when IT professionals were retrenched because of tough times between 2001 and the end of 2002 seem to be coming to an end. There is now a good chance for IT professionals skilled in network services, total web site solution providers, and software developers to find employment.

The average salary for IT professionals in Australia is now around the A$70,000 mark.

Technical knowledge less important than the ability to teach yourself and learn

In 2005, the trend towards having technical knowledge in information technology for gaining a job is becoming less and less important. Because technology is changing so rapidly, you need to be able to learn and keep learning new knowledge as the technology changes.

No longer are employers recruiting graduates on the basis of academic results or whether they have gone through university and gained a degree. Rather, employers are testing groups of graduates on their ability to learn new skills and provide hands-on experience through problem-solving exercises lasting around 2 to 3 hours. The tests employed are not unlike what we see on Donald Trump's reality TV show known as The Apprentice. The only difference is that the tests will be tailored to suit the employers' requirements.

To make things more interesting, graduates may be given their own agenda to run at the same time as they are solving the problem. In this way, employers can observe potential employees with the way they interact with other graduates and whether they show skills in adaptability, resilience and the ability to be assertive and decisive at the right times.

As this is happening, employers are beefing up their own in-house training programs so that employees can learn on their own while doing their work.

All this is becoming the norm in today's highly competitive world for jobs in the IT industry.

SPECIAL NOTE: As population increases and we move towards a user-pays system, this approach by employers may be seen as inevitable especially for people wanting to make as much money as possible in these highly paid jobs. However, such an approach could see the emergence of a new class of people in society. Partly created by those people seeking a seachange from the stresses of modern life in the cities despite the promise of high pay and those getting older who are finding the cost of living too high in the cities, it is likely more and more people will create a new world (probably outside the cities) where everyone is treated as equal and able to do any kind of job for the local community. If you are willing to learn and able to help people in virtually any kind of job in your local community (no special skills required), you won't need to be tested, have academic qualifications, or be expected to export products to the world or whatever. Just the ability to show a willingness to learn and an eagerness in the job while accepting a lower pay (or no pay at all in return for food, time to develop your own new ideas, and access to accommodation). It is through this new world where recycling concepts and learning to live simply will ensure these growing numbers of people will not burden the rest of society.

UPDATE
February 2005

Analysts and policy-makers are trying to find ways of dealing with an ever increasing problem of an older population while having the expectation that the current economic and capitalist system with poor recycling mechanisms will be maintained no matter what. If people choose to live in the cities (mainly for convenience and easy access to resources while not contributing in old-life to maintaining and even recycling those resources properly as needed to maintain the current system), policy-makers will have no choice but to legislate people to work longer well into their old-age before receiving benefits. It is either that or everyone employed in business and the government must pay higher taxes. This is now becoming the case for countries such as France, Germany, Japan, Italy and soon the US and Australia. Unless there is a radical change in thinking about our economic system and an emphasis on introducing widescale recycling as well as getting people to live a simpler life independently of the rest of society, we will have no choice but to face a situation where people working in the IT industry must work for a very long time and may even need to start their own businesses as employers look towards employing younger people.

SPECIAL NOTE 2: The current competitive economic and capitalist system in the cities can be maintained (even without the need for testing potential employees in the manner described above) so long as the population levels are sufficiently sustainable, demand for high pay is limited, there are plenty of resources to make products and provide services (recycled or not), low unemployment, and there is a demand to consume these products and services (e.g. by individuals who have a family to support, and plenty of young employed people willing to take up new technologies, the latest fashions etc from businesses).

SPECIAL NOTE 3: Universities are designed to make people think and teach them how to learn (i.e. by researching an original not-for-profit topic and solving the problems which may or may not have a commercial benefit to society in an independent manner through critical thinking). While these skills are still highly regarded by employers, the trend today is more towards hands-on experience in how to work in a team environment in the business world, showing good customer service to the consumer and clients, the ability to quickly sell any products and services, and quickly creating new products and services through problem-solving exercises. As a result, more and more universities facing funding cutbacks from the government are forced to dumb-down their courses, reduce first-year standards, and raise the cost of the courses to meet the shortfall while providing what the employers want (i.e. teach students what they need to know when performing work for businesses).

Reducing IT salary costs for business entrepreneurs

While there is a demand for skilled IT professionals, paying the high salary of the IT professionals is not according to business entrepreneurs and employers in charge of hiring the professionals.

An increasing number of people are outsourcing some of their IT work to cheaper IT professionals living in India such as Bangalore, Mumbai and Chennai and other developing nations, which has amounted to nearly 80,000 IT jobs leaving the US and being oursourced to people in these nations over the past four years. For example, an Indian software engineer with six to eight years experience can earn US$18,000 to US$23,000 a year. Compare this to the same worker in the US where the salary can reach as high as US$80,000.

Yet the quality of work produced is roughly the same according to the business professionals.

Another alternative, and one that doesn't require the loss of local jobs, can be seen in the revolutionary aims of two US veterans in the IT outsourcing industry. In an attempt to keep jobs in the US while minimising the costs including legally capping the salaries to a non-US level and not having to pay for appropriate visas, Californian entrepreneurs Roger Green and David Cook of SeaCode Inc. based in San Diego intends to buy and anchor nearly 5 kilometeres from the coast a cruise ship. The aim of the ship is to employ and bring together 600 of the best IT professionals to work on software development.

In return for a lower salary and the production of high quality work from the IT professionals, American software engineers will enjoy the luxuries commonly found on a cruise ship. This will include a pool, 360 degree office views of the ocean, all-the-food-you-can-eat, games and relaxation rooms, places to sleep, and the list goes on. Or, if you want to return home, there is a half-hour water-taxi ride ready to take you back to Los Angeles.

But given how much the business entrepreneurs want to save money and retain their investment in quality IT professionals, we wouldn't be surprised if the IT professionals will be encouraged to stay on the ship. Well, look at the additional benefits to the business entrepreneurs: the ship is not likely to experience damage in an earthquake as is so often the case with businesses stuck on land in this part of the world or even pay the high council rates. Therefore the insurance costs to cover things such as the loss of the business property during an earthquake would be almost negligible. And you don't have to worry about losing your best employees from a tidal wave hitting the Californian coast.

Nothing like keeping the great American IT industry afloat when California is in trouble.

Dismissing concerns of a possible sweatshop, or should we say "sweatship", where lower-paid employees could be run to the ground in return for highly profitable software products, Mr Green said:

"These will be highly skilled, highly educated people competing for these positions. They will be treated with dignity and professionalism.

'We're a Californian company and we're going to manage this in the way that made America great. This is not going to be an under-the-covers, renegade operation." (Wright, Gerard. Taking technology jobs offshore could create a sweatship: The Sydney Morning Herald. 23-24 April 2005, p.11.)

But as Dr Omar El Sawi, professor of Marshall School of Business at the University of Southern California, said:

"The benefit of face-to-face contact and proximity in development situations is very important." (Wright, Gerard. Taking technology jobs offshore could create a sweatship: The Sydney Morning Herald. 23-24 April 2005, p.11.)

We must assume this will be done by the business entrepreneurs.

How much are IT professionals in Australia being paid?

According to recent research by Perth-based recruiter Candle ICT, market analysis showed IT contractors in the ACT make $85 per hour. Compare this to the national average of A$69 per hour and it makes the ACT the most lucrative place to earn money from IT. Permanent IT workers in the ACT can earn an average A$83,000 a year. But this is less than IT workers in NSW (A$96,000) and Victoria ($86,000).

Results were released on Thursday 25 January 2007. (Alexander, Cathy. ICT in ACT proven path to the rich list: The Canberra Times. 27 January 2007, p.22.)