Telco workers face headcount squeeze

Survey from recruitment firm Hudson shows telco employers intent on reducing headcount

Workers in New Zealand’s telecommunications industry might find that their jobs are in jeopardy, with around 18 percent of telco employers saying they intend to decrease headcount in the next quarter, according to a survey by recruitment firm Hudson.

The quarterly Hudson report on New Zealand employment trends was released in April. It says the telecommunications industry has recorded its lowest level of hiring sentiment in two years, with only 8.8 percent of employers in the sector saying they are planning on increasing headcount in the next quarter. That is a 2.3 percentage point drop from the previous quarter.

One company where heavy job losses are expected this year is Telecom. Back in February the freshly demerged telco revealed at an earnings call that it cut headcount by five percent in the six months to December last year, not counting jobs lost as a result of its split from Chorus.

Paul Reynolds, Telecom CEO, and Nick Olson, CFO, both indicated that further cuts to staff numbers were required to make Telecom more competitive against new competitors in the market, with Reynolds saying this was a common path taken by incumbent telcos overseas.

The hiring trends in the telco sector are in stark contrast to what is happening in the broader IT industry, where 43 percent of employers across New Zealand say they intend to hire more workers in the next quarter, according to the report.

The public sector in particular is seeing a rising hiring trend between April and June this year, with one in five government employers planning to take on more staff, says Roman Rogers, general manager of Hudson New Zealand.

Rogers puts this down to government departments looking to push through projects which have already started before major cuts in government agencies which are expected to take place later this year in the form of efficiency drives.

“One in five government employers have told us that they’re going to increase headcount – there seems to be a drive to get key projects completed before reforms get underway,” says Rogers.

“Now, more than ever, pressure is being placed on businesses, and the individuals and teams within them, to be more efficient, to be accountable against measurable targets, and to justify resourcing decisions. These types of employees can demand top rates but increasingly, lifestyle factors and career choices – like experience, diversity and management – are also important bargaining tools.”

The Hudson report says 17.9 percent of employers in this sector are looking for fixed-term or contract staff.

Business analysts, project managers, solutions architects, and other specialist project roles involved in delivering applications have been in particular demand since the middle of 2010 says IT recruiter Jonathan Hay.

Hay was a consultant at Hudson, and now heads Robert Walters’ IT division in Wellington. He says the results of the Hudson survey reflect the sentiments displayed by his clients and candidates in the capital.

“There’s a real drive in Wellington for efficiency through transformation projects. We’re all talking about it, it’s everywhere,” says Hay.

“In the last 14 months we’ve seen an increased need for fixed-term and contractors, with the permanent opportunities in the government sector steadily decreasing.”

With the creation of the new Ministry of Business, Innovation and Employment (the amalgamation of the Ministry of Economic Development, Department of Labour, Ministry of Science and Innovation, and Department of Building and Housing) Hay expects this trend to continue for the next year at least, and adds that there will be many job losses in the region.

He says there are many opportunities for jobs in the financial sector, but government workers who have not kept up to date with the latest technology might find the transition very difficult.

“The average tenure in government IT is 10 to 15 years. It won’t be necessarily the older workers that have trouble but the ones who haven’t maintained their professional development,” says Hay.

“If you’ve been working on mainframe technology for 15 years it won’t be easy transferring that skill to another organisation. And this is a more common problem than you would think.”

Hay says IT workers who prefer permanent roles could do well transferring to the financial sector, which is experiencing growth in Auckland, or taking their public sector skills to Australia.