Potentia IDT Quarterly Insights Report - July 2016

Potentia IDT Quarterly Insights Report

Potentia Quarterly IDT Insights Report

Q2 was an interesting period for global economic change - both around policy and growth prospects. Interest rates remain at an all-time low and an imminent cut is likely. The NZ dollar broke back through 70 cents US for the first time since June last year. The NZX 50 index fell sharply on Brexit news but rebounded almost as quickly setting a new record high at the end of the quarter.

The Innovation, Digital and Technology (IDT) sector enjoyed a period of healthy and sustained growth last quarter, with an increase of approximately 20% in hiring activity between April-June 2016 compared to the same period last year. We remain positive about the outlook for the sector in 2016, with steady growth prospects and the creation of further job opportunities.

IDT Job Market Segment Overview

Local follow-the-sun support for global clients, more rapid dev tools and cyber security, we’ve decoded the key trends currently shaping IDT job market segments:

  • Digital

Creative Agencies are experiencing strong growth in their digital offerings. This is leading to exceptionally high demand for UX and CX Designers to create and build their digital advertising components. Furthermore, as the focus continues to move from traditional media to digital, the people responsible for digital within these agencies are also increasingly involved in setting high-level business strategy.

  • Data & Analytics

Businesses across all sectors now look to leverage their data to gain a commercial edge and the search for qualified Data Analysts is frantic. These experts are no longer expected to be purely reporting-focused. They are increasingly required to provide real-world insights from the trends they find in their analysis and are also responsible for communicating these trends and insights to key stakeholders.  

  • Product Development

Many technologies have tried to crack the local duopoly of Java and .Net in product development and these technologies are currently facing strong competition from the more rapid MEAN and Rails dev tools. However, .Net Developers still make up more than half of the registered vacancies on NZ’s leading Job Boards for programmers in the last quarter.

  • Security, Integration, Cloud & Systems

IaaS is the fastest growing segment of the as-a-service sector, both locally and globally.  On-premise Systems Engineers and Admins are increasingly upskilling and gaining qualifications in the two front-running juggernauts - AWS and Azure to reposition themselves as Cloud Engineers. The most in-demand skill for experienced Cloud Engineers is Cloud security knowledge coupled with relevant experience.

  • SaaS Vendors

In response to growing international demand for fully supported SaaS services, the number of NZ-based operational support and implementation offices (either directly or through re-sellers for the large vendors) has surged, providing 24-hour follow-the-sun support for global clients.

  • Leadership

After the significant churn at the Chief Information Officer (CIO) level during Q4 2015, we are continue to see signs of stability returning to this space. The changes at the end of 2015 continue to impact many firms, with a number of IT teams undergoing significant restructuring during Quarter 2 following the new CIO appointments. This has created opportunities from senior management down to team leader level.

In the wake of several high profile events, CIO’s are being challenged by their Boards and Executive Leadership Teams with regards to the state of their own cyber security.  This has manifested in a marked increase in Chief Information Security Officer appointments, the launching of security work programmes and the search for predictive security monitoring as a service offerings.

CIO’s must increasingly proactively support business-centric Chief Digital Officer’s change agendas while ensuring that “the lights are kept on” delivering business as usual service levels.  It is anticipated that this tension and prioritisation for constraint resources will only amplify as digital programmes mainstream.

Contractor Market

Several high profile programmes - both in the public and private sector - slowed down or were even halted in the first half of 2016 as a result of further in-depth due diligence being requested especially at Board level.  

Boards are now demanding heightened programme delivery risk reviews and seeking more quantifiable hard financial benefits before approving programmes. Gone are the days where business cases could traverse such scrutiny on soft non-financial benefits alone. Greater due diligence and business case review processes prior to a programme starting has had a direct impact on the contingent resourcing market - as the ability to on-time deliver these programmes was based on flexing the permanent talent pool through contract resourcing as required.  

We continue to see programmes of work being delivered albeit with a heightened awareness of programme governance and business benefits realisation. As a result we see a similar level of contingent resourcing requirements across enterprise and government agencies as the previous quarter.

We are seeing increased CIO involvement in key hiring decisions - especially where these roles are considered strategic in programme delivery or operational support to maximise system availability.  CIO’s are being presented with a plethora of business-driven change challenges - and as a result prioritisation remains front of mind - how to maximise and utilise resources most economically to deliver the transformation agenda.

While the number of people arriving in New Zealand with either permission to work or returning home has slightly increased, there has been no marked change in the number of people applying for or getting jobs during the period under review.  Employers continue to actively recruit workers from overseas, especially if they have specific technical skills that are hard-to-find locally.

Trends identified in Q2

Our interactions with the IDT market over the quarter exposed two new trends of note.

  1. Digital technologies are transforming businesses of every description, in every sector. However, while the technology and skills are available, there is occasionally a gap between technical promise and the ability to put it to work effectively. For example, the latest ‘as-a-service’ offerings are incredibly powerful and it seems many of the teething issues of availability and latency have now been addressed to a large extent.  However, a new wave of integration and deployment challenges is emerging following the switch to ‘as-a-service’ offerings, which must be overcome if companies are to leverage these new technologies effectively. Additionally, in the wake of this ‘as a service’ paradigm, third party intermediaries (vendors, integrators, re-sellers and consultancies) are seeing a shift in demand for their skills and services away from implementation to more on-going management and support capabilities. Integration, customisation and deployment will continue and consequently businesses may want to compress the costs by creating roles in-house rather than relying solely on external suppliers. However, the number of people with the relevant skills is in short supply. Employers are having to be creative when it comes to attracting new staff and also increasingly focused on re-training and rewarding existing staff as further shortages emerge.
  2. Early stage innovation initiatives  - initially sponsored through a ‘skunkworks’ approach via small, loosely structured research and development teams – are now developing into more mainstream programmes at many enterprises due to their proven potential to contribute to business success through the creation of highly-innovative solutions.