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Canadian IT Job Market - Quarterly Outlook January 2009

This is a look at the Canadian IT Job market across Canada from our company's perspective. We have offices in 10 cities across the country and our three General Managers have tapped into their market knowledge to write this ... hope you find it helpful. I will stress that this is not a scientific or statistical look at the market ... this is what we see day in day out "in the trenches" of the war for talent across Canada.

In Eastern Canada, the fall wound down quickly and the winter arrived early and abruptly bringing a feeling of pending economic gloom and doom from forecasters, and yes, these are the same people who, months earlier, painted a much rosier picture, at least in Canada. In the technology sector we are used to change but the magnitude and speed with which change came in the latter stages of 2008 was without precedent. A historic, if not transformational, new US president, 150 year old banking giants flaming out in days and in Canada, a Parliament that teetered before the country introduced a new word into our daily lives "proroguing". With all of this uncertainty, the questions heard most often these days are: "What's going on in the job market?" and "What do you see for the next year in the job market in the East?"

So - what's going on in the job market? For the most part, it was business as usual in Ottawa and Montreal as the year wound down with a decrease in demand for full-time positions, especially in Montreal; however, in some federal government departments in Ottawa, there is a marked increase in demand for contract positions.

Other local factors, especially the transit strike in Ottawa, continue to disrupt the economy and there is chatter in the halls of the federal government about departments and/or projects losing funding as the fiscal year end approaches. However, as the Treasury Board deals with a smaller revenue pot, there are still many projects that require skills and resources not readily available in the government. For example, a large BI/Data Warehousing project in one department will get underway this year.

There has been a small reduction in scope in some government projects; however, this reduction seems to be due to the natural end of projects rather than the abrupt stoppage of work seen in the private sector lately. This has resulted in some softening in rates in the market, particularly among testers, tech writers, and some programmers. It is likely we will continue to see rates soften up throughout the next quarter and beyond as consultants become more focused on things like the length of a contract opportunity rather than the rate increases that come with a hot economy.

As to the second question - where is the job market going? One can be reluctant to predict, but it is safe to say, with budgets shrinking in both the private and public sectors, headcount visibility more important than ever, and an overall shrinking economy, particularly in the US, in the next few months consultants will need to be more focused on bringing true value and impact to their roles in order to assure continued opportunities. There are still many demographic factors that, over the long-term, lend themselves to favoring employees if not employers, particularly in technology, and as organizations continue to downsize, there is the potential for increased contract demand over the short- and medium-term as gaps caused by layoffs begin to impact organizations.

Skills and roles in demand in Eastern Canada include BI and Data Warehouse experts, Data Conversion resources, Security Analysts/Architects, Java Developers and Lotus Notes Developers. In Montreal, Senior Security resources, Oracle functional and technical resources, as well as Help Desk and Tech Support roles are in demand.

In the GTA, the unemployment rate seems to have stabilized yielding a rate of 6.7% over the last two months. This is slightly up compared to this time last year when the rate was 6.1% and slightly higher than the national average which sat at 6.6% in the month of December.

The IT labour market for GTA in the fourth quarter started strong with a number of companies in the Telecom and Retail Sectors initiated large network upgrades. In the month of November, the region saw an overall slow down in technology requirements, however, the month of December brought an increase in activity within the government sector.

With the state of the economy, as expected, IT hiring within the financial sector has slowed down considerable. It is expected that hiring within this sector will remain slow over the next quarter.
In-demand skills in the GTA include: Security Consultants, Technical Architects, Business Analysts, and Project Managers. There has also been a noticeable move towards functional requirements, specific to industry experience rather than technology experience for example BAs with Financial Sector experience.

In response to world-wide economic issues, IT activity across Western Canada has become Bear-ish. This, combined with seasonal slow-downs, has resulted in reduced demand for IT resources across the board. Very large business initiatives and projects have been put on hold or cancelled making contractors nervous about getting extensions. There were many who did not receive the extensions that seemed to be given just a month or two before and, due to the cancellation or delay of large projects, a good number of contractors saw their contracts terminated early.

Compared to previous quarters, contractors are getting fewer offers and there is a growing pool of top-quality IT contractors available for work. In response, the industry has witnessed contractors being much more flexible with their rates. In general, rates have leveled off, if not fallen.

Companies, being cost-conscious, are watching their staffing levels very closely and are making changes to their personnel/contractor strategies. There are many hiring freezes in effect. Some companies have removed all but mission critical contractors from their staffing mix; meanwhile, some companies are using contractors where they would previously have hired full time employees.

While the gloomy economy can be discouraging for job searchers, opportunities are available if you know where to find them. The largest IT employers have been the ones to make the biggest cuts; however, smaller to mid-sized companies are taking this opportunity to attract top-level, affordable talent into their projects. Additionally, there are some companies that are more "recession-proof" than others and these companies are also hiring contractors where there is value to be found or because they want a more flexible workforce through this economic turmoil. Finally, the various levels of government, whose "customers" are the tax payers, are less likely to feel the economic pinch and will continue to need/use IT resources at historical levels. Our advice to the contractor community during this "down time" is to take advantage of the opportunity to upgrade skills and education, polish your resume, work closely with the agencies (build relationships with the recruiters), remain flexible with your rate expectations, and secure contract extensions as early as possible.

Skills in demand across the West this past quarter included:
SAP, BAs, and Testers/QA Analysts in British Columbia;
O racle experts (Developers/DBAs), PMs, BAs, Developers (.NET, Application) in Edmonton;
PMs, BAs, Communication/Change Specialists, SAP with Oil & Gas or Utilities experience in Calgary; and,
BAs, PMs in Winnipeg.