Welcome to 2007!! January started out with a whimper in the West – for about 2 days – then it took off like a rocket! All indicators point to another very busy year for the Information Technology sector in Western Canada. Companies, big and small, are reporting that they are planning for the same or a greater number of projects as in 2006. There have been indications that new technologies such as Service Oriented Architecture (SOA) are ready to take off; however, there has yet to be much technology-specific interest shown from a staffing perspective. Microsoft is full into the launch of VISTA and with past releases there has tended to be a number of technology upgrades deployed by organizations wishing to make the most of the new platform. Compliancy, security and business continuity continue to be hot topics as are technology rationalization, collaboration and Information Lifecycle Management (ILM). These “themes” are expected to drive IT spending throughout 2007.
Threats to this positive forecast include rising project costs – huge cost overruns are being reported on everything from the Olympics to the Oil Sands to Health Care spending. Many organizations are recalculating the ROI on their projects to ensure they still make business sense. In Alberta, at least, the overheated economy relies on the continued strength of oil prices which have been dipping down around the key $50 mark. Companies across the West are capping non-budgeted spending and on the staffing-side, we are seeing them hold very firm to their set rate tables. “Economics 101” is playing out as the market searches for a sustainable balance of supply and demand.
What we are seeing now is a strong need for PMs, BAs and Developers, which is a sign of a strong project trend for at least the next 6 months. The permanent placement market is heating up as organizations are making a rash of new hires to meet their growth expectations for the New Year. Companies also are interested in contract-to-hire scenarios that allow them to on-board IT people with known skills and a good organizational fit. The Government of Alberta tendered a higher than average number of staffing RFPs in January and Vancouver continues to heat up spurred on by infrastructure upgrade projects and a general up tick in business conditions. In a “Freaky Friday” phenomenon, there have been a relatively large number of IT people leaving their jobs to try out contracting life while at the same time there has been a large number of long-term contractors accepting permanent positions – this makes for interesting times as these people learn to adapt to the new realities that go with these significant changes.
Across the West’s major cities demand for over the last month could be characterized as follows: Edmonton – BAs, PMs and .NET; Vancouver – Java, Testers; Calgary – PMs, SAP, Content Management, Data Analysts and Architects; Winnipeg – BAs and PowerBuilder.
The employment stats remained relatively unchanged from the previous month in Ontario. According to a report by Statistics Canada, overall employments gains throughout 2006 were in full-time jobs; however, over the past three months, close to two-thirds of these gains have been in part-time positions, most of which were in Ontario and Quebec. According to a report put out by Bentall Capital, the strong service sector output and job growth that has offset the decline in the manufacturing sector in the GTA will experience some weakening through 2007. It is expected that Toronto will post its weakest pace of economic growth since 2003. This is, however, expected to improve by 2008.
At Eagle, January was an unusually slow month across the GTA with many people extending the Christmas holidays into the first week of January; however, momentum seemed to build towards the end of the month. Within the government sector, business is increasing across many ministries. In-demand are contractors with health care experience, followed by architects (solutions, enterprise). There seems to be a downturn in contingency staffing needs within the Financial Sector, which can be attributed to tight budgets and the completion of many projects.
The market continues to be a sellers market with a continued high demand for top talent. Contractors are recognizing this reality and more are rejecting contract extensions. Many are actively marketing themselves through their current contracts in hopes of getting better rates for their skills. In this contract-rich market, contractors are also declining interviews due to multiple interviews and time constraints. This is a trend that we have not experience in quite awhile. Despite the market, hiring managers are still slow to hire and are losing prospective candidates to other contracts. In effort to maintain those contractors already in place, long-term contract extensions are becoming the norm with the average term being one year.
Hot skills in demand in the GTA on the contract side include: SAP (all modules), Peoplesoft, Achitecture (Enterpise, Appliacti), BAs, Testers and Tech Support. In-demand skills on the full-time hiring side continue to include PMs, and Java Developers in addition to IT Cobit, Peoplesoft, BAs and QAs with Insurance skills.
In Eastern Canada and in particular Ottawa, the big news was the arrival of the highly anticipated, long awaited and much discussed Federal Government new Procurement RFP dubbed “The Way Forward”. The Way Forward is in many ways the son of the sponsorship scandal, the Federal Accountability Act, some external procurement consultants who missed the mark (at quite a hit to the taxpayer) and a whole lot of political hot potatoes. Although a long and winding road was taken to get to this point, it is interestingly, a successful example to be held up where the buyer (the Feds) and seller (vendor community) had a thorough, although sometimes challenging, dialogue before going to tender. It is the first step in the government’s overall transformation in the way it procures goods and services, and in this case in particular, how the Feds will buy technology services as it pertains to single body staff augmentation. The next piece to come out will encompass the solutions or project side of The Way Forward. The Feds remain by far the single largest buyer of IT professional services in Canada. How they go out to the vendor community to buy is and will continue to be, of critical importance to both the IT vendor and consultant community.
In the interim, it appears as though activity is heating up with the government as the March fiscal year end approaches and budgets are assessed. There has been particularly strong demand of late by a number of departments for security resources including analysts and security specialists. This is most likely pent up demand that has come as a result of the conclusion and awarding of the Cyber Protection Supply Arrangement (CPSA) , a vehicle that allows for the procurement of security resources. The hot market continues to hamper organizations who are unable to effectively shorten their time to hire and the Feds are one such organization. Restricted by a long and arduous hiring process that sees some RFPs for single bodies take weeks if not months to conclude, government clients often find themselves starting all over having selected consultants who have long since taken other contracts. Although many consultants have a preference towards government engagements due to the potential for longer terms, with private organizations much more willing and in fact adept at hiring more quickly, government clients are often at the losing end of that scenario. It is hoped and expected the new task-based procurement vehicle will be effective in resolving this “time-to-hire” challenge.
Permanent placement activity remains strong throughout Eastern Canada as a number of organizations are operating in a new fiscal year with new budgets. The “looming” talent shortage, as it is often referred to in the m
edia, for many organizations is not “looming” but in fact, very current and very real. And most are actively looking at both creative sourcing strategies, as well as complete fundamental alternative options such as off-shoring or outsourcing.
Skills in demand in the region this month include: Lotus Notes Developers, .Net Developers, SAP Consultants particularly HR and MM modules, SAN and BUR Storage Specialists, Java Programmers with JSF and Senior Project Managers.