Anthony Miller, a Research Manager at research house, Ovum Holway, told managing directors of IT agencies: "It's not a case of shooting fish in a barrel anymore... you will have to play the market and what's in demand. Get your daggers out and take a slice of your competitors' business."
Mr Miller warned that whilst a recovery in the IT recruitment business is on the way, he didn't expect to see anything other than "modest growth" of between two and three per cent in 2004.
"This will follow a fourth year of negative growth in 2003," he said.
Mr Miller stated that normally he would have expected the recovery in IT recruitment, when it comes, to be at a faster rate than he was now forecasting for 2004 and 2005.
"The difference this time is that the primary driver of growth will be outsourcing deals," he explained.
He added that staffing issues involved in outsourcing deals (transferring workers from one company to another) do not offer the most lucrative opportunities for recruitment companies anymore.
"Opportunities for freelancers would be very modest in this area," he said. He echoed ATSCo (Association of Technology Staffing Companies) Chief Executive, Ann Swain's recent comment that freelancers are the first to be caught out by recession and the first to benefit from market recovery.
Survival strategies suggested by Mr Miller were:
- Other recruitment markets;
- Solutions offerings;
- HR outsourcing;
- Managed Services;
- Business Process Outsourcing;
- Public sector business.
The survey showed a significant increase in the market value of key skills since September, with the top five (C++, Java, MS SQL Server, MS Visual Basic and Unix) showing a 10 per cent increase in annual salaries and a 14 per cent increase in freelance rates.
Richard Powell, © Shout99.com 2003