Although we've heard for years now and continue to be told that there is an IT skills shortage, job ads for the tech sector nationwide dropped the most in the March quarter this year, falling by 37.4%, according to a report from the Ministry of Business, Innovation and Employment (MBIE). Manufacturing and hospitality jobs were the second and third hardest hit, dropping 35.6% and 35.4% respectively.
Across the 10 regions in the MBIE report, the story is the same, with IT vacancies in many areas vanishing in large numbers.
The employment situation for techies has changed quite dramatically and quickly. Overseas companies have shed staff in large numbers over the last year or so, and the latest figures suggest New Zealand is following that trend. Interest.co.nz asked recruiter Robert Half what is going on, and the company's director Ronil Singh provided some answers for us.
"The main reason why IT job ads have dropped the most is because we are coming off an IT jobs boom," Singh said.
"At the moment, funding from investors has slowed down for start-up software development companies which is making it hard to scale up with more hires," he said.
"The current economic climate is forcing a lot of businesses to review what is ‘business-critical’ spend, which means projects are being delayed (not cancelled) and it’s harder to make a business case for additional headcount if it is not deemed necessary," he added.
This may seem at odds with New Zealand public sector spending on IT remaining significant at $1 billion a year, as noted by consultants KPMG.
That money is to maintain the status quo, "itself a costly endeavour," KPMG wrote. An estimated $12.5 billion spend over the next five years on IT is being suggested to meet demand for digital services from increasingly tech-savvy citizens, a possibly unaffordable amount that is rapidly outpacing available funding.
Increasing demand notwithstanding, government IT work opportunities are falling away and branching out on your own isn't going to make up for it. IT channel news publication Reseller News reported that government spending on contractors and consultants is falling fast.
Spending on contractors and consultants was the lowest share of the total workforce expenditure since Public Service Commission records began in 2018, down to 8.5%, Reseller News reported.
There is also the spectre of the much hyped artificial intelligence (AI) technology which is said to be able to replace some IT jobs, but hasn't had much of an impact on the IT jobs market, Robert Half noted.
"No, we haven't seen GenAI [generative artificial intelligence that can produce text, images, audio and video] contribute to the job ads slowdown," Singh said.
"It is relatively new and is not having that sort of an impact yet on the hiring market," he added.
Research published earlier this month by Australia's assistant minister for employment, Andrew Leigh, bears out what Singh said, with AI skills not being sought after attributes by hirers.
The IT sector is still seeing a skills shortage, but hiring is becoming more strategic, Singh said.
"When businesses are faced with headwinds, this time is spent planning on how to be more efficient and productive and looking at how they can invest in the right tools and technology to give themselves a competitive edge," Singh added.
"Tech talent is needed for these business changes, so this time of planning allows businesses to hit the ground running when circumstances ease up," he concluded.
As a result of the demand-drop off, IT worker salaries have plateaued over the last 12 months, which is expected to continue this year. On average, salaries have increased a mere 0.6%, with only infrastructure and engineering workers getting an inflation-busting 9.5% pay rise.
Roles that are in demand still include senior software developers, automation testers, systems engineers, help desk support officers, and business analysts, Robert Half's salary guide for 2024 suggests.
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Also, (as was predicted), all those jobs that can be done "working from home" are now being done "working from India". If you're not in the office at least pretending you are doing a job of vital importance, you are clearly dispensable, and will be replaced by someone cheaper somewhere else.
This makes the assumption that their is actual management and leadership. My experience of a major telco is that there is nether - they confuse command and control with management and leadership - there was neither . Reactive rather than proactive, no planning (hence reactive). Failed to do management functions, too much time in meetings and not enough time in actual management , confused talk with action, had no understanding of the job that was being carried out by their staff, inadequate systems to gauge work performance ( doesn't help that they don't understand the worker's job) etc.
EDIT
This is not restricted to IT or telco firms.
This is spot on.
I've spent +20 years in software delivery and it never seizes to amaze me that corporate managers think in order to scale you simply throw more bodies at a problem.
Yet there are nimble companies that outproduce the big ones by 10x.
It's not the headcount but the quality of people and that starts with the leadership.
The 'functions' requiring managerial oversight and physical collaboration are the managerial positions trying to justify their very existence
There are some roles which are indeed needed, and also some middle management positions that are absolute bull. The latter are the ones more likely to scream for return to the office
That's my point. Its not about location so why employ a local when you can employ someone cheaper overseas? Remote working now means remote outsourcing.
If you want to hang on to a job, you'd be best pretending that your work cant be done from home. Otherwise you'll soon be given the boot and replaced by an offshore worker.
https://connectos.co/news/offshoring-rides-the-next-wave-of-remote-work/
Management are embracing "remote working", just not in the way that workers thought they would. As they say, be careful of what you wish for because you just might get it. In this case, unlimited time at home doing nothing in your pyjamas.
Maybe some of the big players do that, but my experience with mid-sized firms is that they still prefer someone local (NZ/Aus) even if the role is fully remote. They want someone on the same timezone, with easy communication, and who can meet up in person if the SHTF. It's not easy managing a team in SEA/SA.
"I've worked with some people for years and never met them face to face."
Ditto.
I love it when the newbies send meeting requests to meet up at the 1LVL5C Meeting Room, Main Street Building, Manhattan, NY. (And occasionally ask to meet up for 'after work' drinks which I'll make every effort to attend but seldom are able too.)
If NZ signs the Free Trade Agreement with India, it will be open slather for Indian workers in NZ. No restrictions on "services exports" under the FTA. They might be present in NZ but they will be paid by Indian companies, in Indian rupees, in India. Much like how Chinese construction companies can operate in NZ with wholly Chinese staff, and work for Chinese developers in NZ.
Incorrect. 1) Those large Indian IT consulting firms cater to thousands of clients around the world and 2) have no shortage of bright IT workers.
Their clients in NZ will likely appear low on their priority lists. The best and brightest assets will obviously be assigned to big American corporate clients and other Fortune-500/2000 companies elsewhere to fetch a much greater return to the company.
Well, ironically enough, at the NZ companies I've worked with in recent years, when I visit their offices, mostly who I see there in person are workers from a large, Indian based outsourcing company. Generally not doing much useful other than offering seats-on-chairs to justify invoices.
Also, (as was predicted), all those jobs that can be done "working from home" are now being done "working from India".
Vietnam is now a hotspot for AI outsourcing. And quality of the outsourcing of trad IT work to Pakistan is common. India can be more hit than miss.
I'd estimate that roughly half of the ICT workforce directly involved in ICT work (i.e. excluding people in ICT admins, call centers, etc.) are directly involved in 'building new stuff'.
Building new stuff is an investment in / for the future. I.e. the intent is to either cut future costs or make future revenue.
So thanks RBNZ ... Your ineptitude - by creating booms and busts and losing precious time - is why NZ's capital utilization - and therefore growth - is so appallingly low.
"If it's a discretionary nice to have that needs interest rates 3-4% lower than current to afford, it's a questionable investment."
Such comments assume that the funding comes from borrowing. It almost never does!
Most projects are funded from margins on sales. And sales are way, way down for many. Fewer projects still are funded from retained earnings and these too are under pressure to keep the business liquid due to ... wait for it ... Lower sales.
Funny that that comment got thumbs up. I guess from people who don't know much about running a business.
Or people that know how a cost benefit analysis works.
Commissioned and deployed many an ICT project back in the day. Couldn't really put "margin" as the primary means of payment, although ultimately net funds should be what's paying for it when the dust settles.
Good bit of business knowledge .102: cultivate a solid client base who are sound, with decent pockets. Aka "follow the money".
Not every business runs on a hand to mouth basis, some are funded in order to mitigate shortfalls, which are inevitable from time to time (we're currently having the downturn we didn't have 4 years ago). And they're operating under a multi-year capital program that remains fairly constant.
I'd argue these sorts of entities are the ones most likely doing a significant amount of NZ's capital investing.
So many I know (I work in tech) are heading overseas too. We have had 3 go from our small firm (7% of staff) in the past 2 months, can't replace them. 2 more have signaled they are likely to leave too.
Meanwhile, the state of half of governments IT systems is dire and getting worse by the day. You would be absolutely shocked at the state of much of our core services IT systems if I could talk about it. And some of the big companies (Datacoms, CapGems etc) have also been on a cost cutting drive, getting rid of much of their staff over the past few years, which can be seen in the quality of their service dropping significantly. Just today we were reviewing a Datacom advised system which was setup in a very amateur way, basically we told them its difficult to work in such a terrible environment for a bunch of reasons (insecure, impossible to manage, access and serious data governance issues).
That $12b deficit in IT spending will have real ongoing impacts until its addressed. Prepare for degrading IT services from government...
Also seen Stats NZ from the inside and yeah the less anyone knows the happier they will be because whoa we cannot even have a basic functioning population stats service or census. Then they try to twist the extreme failures (like the online migration that was a train wreck from the design process & specification setup), by saying that we will have improved data capture without a census & stats dept staff... in a way yes but that is only because such inept management has been draining funds for their severe project failures and ineptitude so the capital for operation and improvements is bare.
Sadly when offered voluntary redundancies it is not the pigs at the trough that leave but the mostly the few capable skilled people who are sick of the bs and poor practices and would rather work in a competent workplace that understands & values skills (often overseas).
In other depts though it is cowboys and salesmen in a circle jk all the way down. The feedback loop is broken because it is merely self approval, with no proper QA & testing and no actual user case flows to test that replicate the complexity of real cases in NZ. I would say I have seen both sides good tech projects in govt depts and bad... but in an industry that devalues training and skills in project design & management so picks those without even the minimum skills necessary to set & evaluate the projects core functions there are always more bad then good. If you have monkeys typing at keyboards sure given an infinite number one may type something workable but for so much of our govt services what we have in project management is just monkeys typing garbage that will have severe faults, most of which they will be willingly blind to and ignore because they don't have the skills to detect them.
It is not a good thing to say there is good and bad when the bad leads to critical failures, severe exclusion of a large proportion of the population and can result in severe wellbeing effects inc death.
Many made redundant. Contracts not renewed as funding for programs were cut.
For instance a large project we were working on to replace a system almost 2 decades old and barely running with patches and a whole team of people working full time just to keep the lights on, was cancelled. A year out from replacement (5 year project) of a modern system that will keep running for another 20-30 years. We were literally going through the final steps of implementation having built the 95% of the product. So the old IT system will need to keep going, likely for another decade, with increasing demands to keep it working, far in excess of what the replacement would have cost. The system is a critical asset to NZ economy, if it was to go offline for an extended period and an event were to occur that required its use, our GDP would decrease by around 20-25% in a year.
But hey, lets just throw chance to the wind and hope a set of unfortunate events doesn't happen. Meanwhile... https://www.rnz.co.nz/news/country/516659/egg-and-poultry-businesses-lu…
Try taking out all dairy/beef/sheep exports for the foreseeable future. The flow on effects around the economy would be devastating as modeled by MPI. Our dollar would become almost worthless overnight and we would not be able to trade in most of our high quality export goods. 130k jobs virtually gone as well as our "great food" reputation. We would need to import food (on top of all our other imports) as wholesale destruction of all farm livestock would occur, but we would have limited means to pay for it. The cost of fuel would suddenly be exorbitant and we would quickly bleed productive workers. Tourism would also shrink to almost nothing putting a further 200k people out of work and further limiting our export receipts.
And these aren't guesses, they directly use what happened in other countries.
Speaking of poultry management and disease reduction we really don't want to cut engineering & fuel supply chains because that is critical to the survival of many species. NZs lack of tech and engineering skills understanding in much of the public and it affects a lot more then tracking and monitoring. We actually need better resource security & hygiene practices because without generator support already failures costs hundreds of millions. If a fan goes down or we fail to have the adequate hygiene & tools working (e.g. to test and record disease), the whole flock, sometimes over a hundred thousand, can be lost & killed. We just don't have the general tech skills in NZ to run and operate to a decent level without our existing critical failures and we still have govt depts discouraging investment in engineering skills. At best we have more marketing to help justify the money going out in reports that are passed around but do not have any tangible improvements to services.
As true for agriculture services as it is for all others.
On the human side. Most medical practices rely on generators & UPS to ensure vital medical supplies & samples are kept viable. Losing power they lose more then access to patient records and it can cause many to lose access to essential medical needs. Batteries in homes, medical centers and businesses don't last long enough for a typical NZ power cut (especially as rewenables often don't cover the periods of power cuts and the demand profiles) and batteries are often so under spec, (they can cover only extremely short periods of small power uses only) that they cannot meet the power demands needed for essential needs. Often people have to sacrifice significant living needs or resort to emergency level practices (e.g. ambulance callouts to travel to hospitals or other centers where power generators are operating).
Yet NZ has instead gone down the path of focusing on design & marketing, on removal of resources needed for functioning services, on increasing policy & management staffing, not core STEM & professional engineering skills. We have many in govt depts who cannot understand the real needs of the essential industries we rely on so will cut the lifeline of them without even realizing or providing adequate replacement. The deprioritization of core infrastructure and even in human medical services over those that purely produce policy reports is pretty bad and we lost a lot of opportunity to increase resilience on many levels because of it. So when disaster happens, be it floods or viral etc, we literally end up far worse off and without any safety net or disaster plan for many.
Most IT people are useless. iT Guy will probably confirm this also. The standard of IT skills in NZ is shameful, hence all the high profile project failures that could have been implemented easily with a few people with a few clues have failed. Most with a clue leave.
I wouldn't say most, but probably 10-20% are useless, many more are lazy but smart. Most IT failures are a failure to plan and a failure to make the right decisions. But you only hear about the failures, so you are suffering from negativity bias. I would say around 70% of IT projects in NZ are successful, of the remaining 30% that are unsuccessful are from a number of factors. The biggest ones are terrible management (so its not really an IT person problem, its a management problem) and poor decision making around timing and software decisions. I was working on a failure recently where the company decided the software platform because some marketing people sold them on it, they didn't do any analysis on whether it would do the job they required. People were bought in to implement it and found out that it couldn't do what they wanted. They tried to soldier on while protesting at the start that the wrong choice had been made, but finally heads rolled at the organisation and the project was canned. That wasn't poor IT people, it was poor management and decision making.
Over 95% of NZ govt webservices and systems are inaccessible to more then 20% of the population.
So lets be clear if we are grading these projects to mark them as success then the measures for success need to also have accessibility to the population (more then 95% fail, using govt own stats), more then 80% have severe security risks, more then 70% do not have the buy in from the public, more then 80% actually increase the costs of management and customer services then previous etc. By most measures of government services they are predominantly failing in significant ways. Remember the WINZ kiosks, or NovaPay. How about the great savings we were meant to have with the multi-billion IRD redesign to "streamline" the online interface, when the simple act of just automatically processing PAYE refunds without the need for customer approval first did more simply by significantly reducing the amount of people who had visibility over their returns & reduced the need to have to use the IRD services at all.
What you instead have is that managers who manage the projects claim they are a success to retain purpose and validity for their over blown pay packets. The KPIs used are purely exercises in self aggrandizement and justification for poor performing management & terrible design practices. Any project can be a success because they have set the standards to the height of a dog turd that does more harm to people in the nation then previous services and causes lost opportunity in where the funds could have been spent. It is that bad.
Over 95% of NZ govt webservices and systems are inaccessible to more then 20% of the population
What metric are you using here and how is that measured? Also you are talking about websites only, thats a small percentage of government computer systems, which are mainly back-end. Your comments about Novopay and WINZ kiosks illustrate my point precisely, thank you for pointing out exactly what negativity bias is. Meanwhile ministry of education and MSD have completed dozens of successful IT projects since those failures, but you didn't read about them in the news so you don't know what they were.
Sadly true, you also need to mention many hit the glass ceiling when they reach 50 or over. When employers openly practice age discrimination of our most skilled IT workers so many projects are run and developed by unskilled and often those with less experience then needed for the roles.
Hence most of the time for many in IT once you reach a certain age looking for other skills or starting your own business is a common necessity.
The government also practices extreme discrimination in hiring for IT projects, including opting for more design consultants over engineers so we go through an endless amount of rebranding exercises while the wheels are falling off the back end and security is more loose then watery diarrhea. This is also the case in many urban infrastructure designs e.g. the NZTA which favours style for projects over substance (see streets for people or accessible streets projects which are the opposite of accessible as they remove access especially to housing & essential services so become very unfriendly to people who need to use the streets). Or MoH blowing money on design campaigns while cutting funding for essential things.
It is just path of the course that those who we really rely on often get the lower wages and their jobs are always under threat compared to unnecessary middle man management & marketing staff. We have an entire industry built in the last 3 years that cannot even run basic accounting for disability funds (something any simple table & form entry could do) but clip the ticket to the tune of millions of dollars just for the bad IT systems existing (even though they cannot even record transactions and often fails on dates, returns, submissions, security, simple accounting addition etc). Failing at basic functions even calculators can do and the NZ govt pays these orgs millions of dollars each to market and add more branding to the fraudulent IT systems designed and operated by consultant companies.
Then we can get into ACC of which I can honestly say family should never be employed in those useless roles that serve no purpose but busy work over a failing and dangerously fraudulent & unethical IT service.
Your opening paragraph is sadly very true.
One of the reasons is that the older you get in I.T. - the more you recognize the costs of a half done job.
Project managers want the kids that say, "job done", and into production it goes. Once in production, numerous issues appear, and rework starts. Crappy error handling, performance issues, bugs, etc. The list is long and endless. And expensive to fix. While expensive to the business when it's not fixed ... Or 'fixed' multiple times.
Kinda funny
- nz gdp per Capita is down again, we are already one of the lowest performing oecd countries for productivity and getting worse.
- we are clearly not seeing IT as the way to drive productivity gains... if we are reducing hiring in the sector whilst importing unskilled labour and exporting skilled workers.
- The IT people who have no work are in the main younger and very capable to leave nz.. most will all be off to Oz. Where they will be welcomed with open arms, more opportunities and bigger salaries. I know 4 really smart young people that have gone to $150k+ AUD jobs in the last 3 months having given up trying to make it work in nz. They got multiple offers there and saw much better futures for their fam.
- it's definitely not the IT people here at fault. Nz management is typically ineffective in understanding the need to learn how to rate and scope projects, manage and deliver those projects. Instead it does nothing useful with IT to improve its productivity choosing to hire more people instead..
Nz seriously needs to wake up
Dell announced a new return-to-office initiative earlier this year. In the new plan, workers had to classify themselves as remote or hybrid.
Those who classified themselves as hybrid are subject to a tracking system that ensures they are in a physical office 39 days a quarter, which works out to close to three days per work week.
Alternatively, by classifying themselves as remote, workers agree they can no longer be promoted or hired into new roles within the company.
Business Insider claims it has seen internal Dell tracking data that reveals nearly 50 percent of the workforce opted to accept the consequences of staying remote, undermining Dell's plan to restore its in-office culture.
I would definitely choose no promotions or new roles over going back to the office. I hardly had any of those in over 40 years of working in the office anyway. Promotions inhouse often involve more work and responsibility for no extra money. You have to switch employers to get better opportunities.
If you are on the hard side of tech, the promotions are almost always based on experience. And its not really promotions, its going from junior to intermediate, to senior and usually to architect type roles after. And yeah, they will just come with time.
If you want to go people management, then its as you describe. I find most IT people who are promoted to management are shockers anyway, they either "want to do it the way they have always done it cos it worked in the 90s" type people and/or have serious communication and management issues. So they end up doing MBAs or something to fix themselves but it rarely takes. Best IT managers I have had have been professional people managers who just ask for and act on advice, or business SMEs who really know what they want.
IT is not going to save NZ from eventual bankruptcy by 2050 (as occured with Muldoon's legacy in 1984). We can't extract any more income from our backbone industries agriculture and tourism. Extractive industry is our last chance for maintaining 1st world status. Minerals, coal, gas, oil etc are the only options if we want to deliver rising incomes to workers, beneficiaries and government. Otherwise our young people will head overseas reducing the already shrinking tax base. You can't earn $150k incomes driving trucks for agri and hospo but you can in mining as an example observable in Oz, Canada, US. Get real or get out of NZ.
Regardless AI (Artificial Intelligence) or II (Indian/Israeli Intelligence) or CI (Chinese Intelligence) or CIA (Central Intelligence of America), NZ is required to have strict policy to manage the IT costs overblown. Large multinationals always create cost blown out propaganda to exploit a small economy like NZ. In reality, more than 90% of IT projects can be completed successfully within budget if the proper plan and resources are hired. Project is supposed to be started as lean and not through boiling the ocean. Anyhow, managements always look for their favourites in order to survive politics and in reality that consequently costs the entire project, critical human resource burnout and unhappy ending of the actual KPI. Now after the emergence of AI, those predictions can be made more efficiently and therefore, is not supposed to have any excuse of missing items or knowledge gaps. It is funny though failure of a project by the large multinationals in NZ is non-noteworthy. However, for the small NZ economy and its tax-payers it's ironic. Therefore, strict compensation and/or infringement is very necessary on any failure to recover the costs.
More and more projects are moving to India, while more Indians are coming to NZ to find IT jobs ;)
The way I see it, In 10 years there will be no IT jobs for Kiwis, I'm already in my 40s so no worries, just finish my mortgage and don't mind to work as a cashier in a supermarket, but for youngsters/NZ this might be a big issue.
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