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JobStats - March 2003 - Down, down deeper and down.: 30 Mar 2003

30 Mar 2003

Market trends

The market decline has restarted with demand falling about 4% this month. Taking the six month view we are down by about 8%. Permanent rates are down very slightly with the biggest falls at the bottom end of the range: the worse you are currently being paid the bigger the decrease in rate. This means that the differentials between the best and worst paid employees are widening. Strangely the opposite is happening to contract rates where the differentials are narrowing. The rates have moved down more strongly than for permanent rates.

The growth in contract adverts has also been reversed in the last month. But the contract market is still better than it was six months and even nine months ago. It looks as though some sort of floor has been found. I would guess that the level of contract vacancies will remain roughly where it is right now over the next six months (though see below).

The number of permanent jobs is continuing to decline. I would guess that this trend will continue or even accelerate over the next few months (see below).

Microsoft has had a good few months (in terms of demand for staff with skills in its products). Mentions of Microsoft are up and .NET and C# are both growing strongly in popularity. XP is also growing strongly in demand.

Finance-related skills continue to be the best paying skills.

The war

You didn't really think that I could get away without mentioning the elephant in the bed. Everything I've said above has to be read through the lens of the war. The outcome of the war will change everything - the future is far more uncertain than it was even a few weeks ago. Maybe by the time you receive this newsletter the war will be over, grateful Iraqi civilians will be throwing flowers at the allies. Then the Iraqi oil can start to flow again and the price of oil will fall giving a boost to the world economy. Maybe the war will drag on for months with mounting American losses as they try to take Baghdad street by street but the oil flows from the already captured oil fields (see above). Maybe the American losses to guerrilla attacks and suicide bombers are so high that they pull out. Maybe some other thing noone's thought of yet. I don't know which is going to happen and nor does anyone else. Your guess is as good as anyone else. Probably better than Donald Rumsfeld's.

With so much volatility in the future state of the economy any attempt to predict the IT job market becomes a joke. You might as well slaughter a chicken and read its entrails. This of course won't stop people making predictions (see above).

What you can do is recognise the uncertainty and hedge against it. Cash is always a good thing to have when times are hard so maybe you should hold back on that second Porsche for a few months. Another thing you can do is reduce other risks in your life. Should you take that job with the exciting startup company or the job with the safe but slightly dull plc? Take the plc. I expect that a lot of small companies will have a hard time attracting staff. You probably shouldn't change jobs at all if you don't have to. At least if you are in a permanent job your employer will have to pay you redundancy if they want to get rid of you and the longer you've been in your job the more it costs to get rid of you.

How are companies going to respond to this uncertainty? Well I'd guess in pretty much the same way as individuals. I would expect them to not make any fresh rounds or redundancies since they might need the staff in the future but they won't start on any massive expansions or speculative new projects either. They'll keep their money in the bank just in case. At the same time the tighter employment market will give employers more strength in negotiations.

So remember ... be careful out there.

That's all folks

That's it for another month. The revamped site is still in development (sigh).


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