Beating the odds

Tens of thousands of jobs are being cut in ICT firms in Europe and the US, while in SA, the general unemployment rate took a sharp upturn in the past quarter. And the situation isn`t improving.

The business uncertainty that has gripped the world shows no signs of letting up soon, Gartner told delegates at the recent Gartner ITxpo/symposium in Cape Town.

Gartner SA MD Renee Jacobs said it was fair to say the global crisis had affected almost every business in SA, one way or another. The overall theme for this year`s Gartner ITxpo/Symposium was: "Planning for uncertainty, spending wisely and finding opportunities in uncertain times". Key areas the conference looked at to achieve this were reducing and managing IT costs, improving business processes, delivering projects that enable business growth, and effective human capital management.

Jacobs said that, following Gartner`s advice, many CIOs internationally were preparing two contingency plans - one to prepare for further cost reduction requirements and another to be ready to take advantage of an upturn, as soon as it happens.

"For many enterprises, the coming months will continue to be filled with uncertainties and challenges," Jacobs said. "Cost reduction initiatives bring about a level of unease within the workforce, which needs to be managed, so that it doesn`t undermine the delivery capability needed to fulfil business needs. To survive, every organisation needs a productive, engaged workforce. This forms the fundamental basis upon which enduring organisations are built."

So cutting staff is not necessarily a good savings measure. It leaves companies without the necessary skills to compete in tough times or to take advantage of opportunities that arise as soon as the situation improves.

CLOUDS AND SILVER LININGS

The good news for local ICT professionals is that in SA it seems companies are aware of the need to hang on to scarce ICT skills, so they aren`t rushing to retrench staff - at least not yet.

An example is Telkom, currently dealing with the need to cut costs amid vocal workers` union dissatisfaction. Telkom said in a statement that "it has steadfastly remained committed to the country`s transformation goals while striving to attain sustainability by preserving jobs".

Karen Geldenhuys, CEO of IT recruitment specialist Abacus Recruitment, says there have been some retrenchments in the local ICT sector, the numbers are not as high as in any other industry. Contractors were the first to go as the economy took a dip, she says, so she is currently seeing more contractors looking for work.

However, the recession has also changed the dynamics of job-seeking, Geldenhuys says.

"Candidates are more hesitant to move to a new group as they are not always sure of the stability of the new group."There are also not that many positions available," she says. As for South Africans wanting to come home as the recession struck overseas, Geldenhuys says:  "In the beginning of the recession we saw more candidates wanting to come back to SA, however at the moment there are not that many applications from abroad."Maybe because the economy is bad everywhere and they are now sticking it out wherever they might be." Ernie Hipner, general manager of ITWeb`s CareerWeb, an ICT-specific recruitment site, says he has also noticed a dramatic increase in the number of contractors and project managers currently seeking work, but overall, he feels the ICT sector in SA is getting off lightly in terms of job losses.

CareerWeb sees about 4 000 CVs being loaded or updated on the site each month - this is about 20% up on the average last year this time, Hipner says. Jobs on offer on CareerWeb have remained stable, at around 5 000 a month, with developers top on the employer wish list.

Hipner notes: "People are still recruiting for this industry. I think IT is still very fortunate. The only thing that has been hurt on the IT side has been the contractors and project managers - I think companies put a hold on projects as the recession struck."

HOPING FOR A REBOUND

Mahlako Hlakudi, CEO of black-owned IT recruiting and training company, Titan Trade Technologies, recently commented on reports that recruiters overseas were coming under increasing pressure from desperate candidates who could not find work in the ICT sector.

"We are dealing with a lot more desperate candidates," said Hlakudi, "People are getting emotional. But I don`t think we are facing the same problems as in the UK. The IT sector has been hit much harder there. Ours has come under increasing pressure, but not to the same extent. There is more of an air of desperation and we are dealing with a lot of CVs and fewer positions than normal. But I think that things have bottomed out now. I think we will see some rebounding by the fourth quarter of this year, certainly in the ICT sector."

Other forecasts seem to indicate that SA will continue to be spared the worst of the global recession fall-out, with the ICT sector looking relatively stable - at least for now.  This doesn`t mean there will be no impact at all, however.

Cadiz Securities economist Kim Silberman notes that the current recession has seen job shedding at an unprecedented rate. She has not isolated jobs in the ICT sector, and analyses private sector jobs in general. Overall, she expects a further drop of up to 5.5% in employment over the next four years, with a total of 354 700 or nearly 9% of the labour force losing their jobs.

Silberman bases this on the "strong likelihood of the current downward phase of the business cycle lasting three-years" in South Africa, assuming that the global recession lasts until the end of 2010.

However, if the global recovery begins this year, Silberman says job losses may not be as severe with private sector employment falling by 174 900 over the next two-and-a-half years.If the recession turns out to be more acute, her worst-case scenario predicts nearly 824 000 job losses between the peak of 2008 and 2013, to account for 12.4% of the workforce.