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Earlier election urged as IT projects, hirings drop off

Paul Smith (via AFR) | July 2, 2013
Australian technology professionals struggling to find work will be urging Prime Minister Kevin Rudd to announce an earlier election date to revive stalled spending activity, according to Peoplebank Australia.

Earlier election urged as IT projects, hirings drop off
Peoplebank Australia chief executive Peter Acheson said the hiring market started to slow down as soon as Julia Gillard announced an election date in January. Photo: Rob Homer

Australian technology professionals struggling to find work will be urging Prime Minister Kevin Rudd to announce an earlier election date to revive stalled spending activity, according to the country's largest provider of technology contract workers.

The chief executive officer of Peoplebank Australia, Peter Acheson, said its regular surveys of its biggest 50 clients showed that market activity began to slow down in January when then prime minister Julia Gillard surprisingly announced a September election date.

Hiring intentions have since fallen away dramatically as businesses and government agencies put future projects and further investment on hold until after the election.

Peoplebank's top 50 clients provide a cross-section of organisations, including the big four banks, other S&P/ASX 200 companies and federal and state governments. As of September last year, 20 of these were actively hiring, 20 had modest hiring plans and just 10 had hiring freezes in place, ahead of the usual Christmas period slowdown.

In the January to March period the situation started to deteriorate slightly with 17 actively hiring and 23 hiring modestly. However hiring fell off a cliff in the April to June period with only five of the top companies actively hiring, 28 modestly hiring and 17 with a hiring freeze in place.

Mr Acheson said election periods always caused a drop off in hiring activity, so the extended period caused by Ms Gillard's earlier than expected announcement had led to a negative impact. "Since the election was called in February there is no question that businesses have stopped making investment decisions, and have stopped making hiring decisions and that is flowing through to a softness in overall employment and, linked to that, overall IT employment," Mr Acheson said.

"It is just simply that customers, whether they are corporate or government just decide to hang back and wait to see what the result of the election is before they proceed with investment."

Mr Acheson said some of this slowdown was related to policy expectations, citing a major mining company holding back on large capital decisions in the hope of a removal of the mining tax. He said a pick up in hiring would occur post-election, irrespective of the winner, but suspected a bigger bounce with a Coalition victory.

"I think a spike will be stronger if the coalition gets in because of an impression that it will be more favourable towards hiring and staffing in general."

 

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