While financial firms continue to lay off staff in the aftermath of the global financial crisis, many are still hiring contract technology workers. There is a clear trend for companies to hire IT staff on a contract basis.
Richard Earl, founder and managing director of recruitment firm Talent International, focuses on helping companies find quality IT and telecommunications professionals in the Asia-Pacific region and Europe.
Earl, from Britain, was a software developer in the banking and finance sector before moving to Perth, Australia, in the 1990s. He set up Talent International in 1995 with his wife, Elizabeth. The company serves many Australian companies and now has 11 offices in Australia, New Zealand, Europe and Asia. It set up an office in Hong Kong last year by acquiring a local recruitment firm, Sterling Search, which has since been rebranded as Talent International. Here Earl talks to the South China Morning Post about the IT recruitment market in Hong Kong and Asia:
Why did you set up a recruitment firm with a focus on the technology sector?
As a company founded by people with a background in technology, we have knowledge of and a great passion for the IT sector. I could see that there was strong and growing demand for skilled IT professionals with clients from banking and finance, the public sector, IT services and the mining and resource sector all ramping up their technology and online capabilities.
Who are your major clients, and how has the business grown in recent years?
We help global technology firms such as HP, IBM and Infosys find talent. There are also telecommunication companies such as PCCW, Telstra and China Mobile, as well as banks like UBS, JPMorgan and Bank of America Merrill Lynch. We are also a major supplier to the mining and oil and gas sector in Australia for companies such as BHP and Chevron. Our business continues to grow, with a turnover of A$239 million (HK$1.69 billion) last year. We have recorded an average 23 per cent year on year growth over the past five years. In Asia, we believe Hong Kong, Singapore and India will continue to show strong growth in demand for specialist technology recruitment services. Globally, there are about 15 million people working in the technology sector, and we believe it will grow to 20 million in the next five to seven years, with most of that growth occurring in Asia.
We have seen banks and telecommunication companies laying off staff: which types of companies are still hiring?
Many lay-offs are non-technology related and we have seen many firms hiring technology staff even as they reduce headcount in other areas. Technology is increasingly important in the operation of almost all businesses. There is also evidence of strong growth in software development as companies look to technology for efficiency or competitive advantages. For example, banks continue to develop in-house software to gain a market edge through improved global markets trading capabilities. We are also seeing a rise in mobile applications, e-commerce and online capabilities for many different types of businesses.
Why are companies looking to outsource their IT staff?
After the global financial crisis, many companies decided to adopt a more flexible approach to hiring technology staff. Many technology projects are short-term in nature and will have specific technology requirements. Business now wants the ability to grow and contract their IT teams as necessary through the lifecycle of projects. There is an increasing trend to outsource infrastructure requirements to save costs whilst maintaining access to up-to-date scalable technology as needed.
We anticipate that many businesses will move to a 70:30 model, where only 70 per cent of their IT staff will be permanent. Businesses developing unique software applications are more likely to hire permanent staff to maintain and oversee the company's intellectual property. For example, a bank designing and building a trading platform will want to do so with in-house teams to ensure they achieve a competitive advantage.
Many people consider contracting to be damaging to employees and their benefits, do you agree?
I don't think so. Contract positions offer many benefits not seen with permanent positions, including flexibility, lifestyle, and higher rates of remuneration. Many IT and telecommunication professionals actually prefer contracts to permanent roles.
Is the increased volume of contracting positions a global trend?
In many countries, establishing a flexible contracting and permanent staffing model is already standard business practice. Examples are Australia, New Zealand, Europe and the United States. It is certainly becoming a regional trend and we will see much more of it in Hong Kong.
Hong Kong has about 80,000 people working in the technology field and about 5 per cent are currently contract staff, I believe this will increase to over 20 per cent, which is in line with the other markets in Europe, US and Australia. This is a result of new approaches to staff engagement models since the global financial crisis. Firms are increasingly more cost-focused and now want staff structures that allow them more flexibility.
What sort of people are suited to working in the IT field?
The IT and telecommunications sector employs people with a variety of skills and backgrounds, from those with technology-related degrees and in-depth technical expertise through to those who understand business, commerce and general market strategy. IT professionals with a combination of technical skills and commercial acumen are generally in very high demand.
What is the outlook for the IT recruitment market in Asia over the next 12 months?
The US has shown signs of recovery, and that is good news for Asia, where economies have continued to show signs of positive growth. I believe IT and telecommunications will continue to be future growth sectors.