Computer Peoples latest quarterly market report

1. IT Market Report
Quarter 3 2010
Compiled & designed by Neil Hulse, Adecco Group

2. Contents
Introduction 3
Economic outlook
Headline market indicators 4
UK GDP growth 5
World Cup revenue generation 6
BCC economic forecast 7
Regional metrics
North East & North West 9
Yorkshire, Midlands, East & South East 10
London 11
South West & Wales 12
Scotland 13
Northern Ireland 14
Table 1 - Labour market statistics 15
Market indicators
Public sector hiring 16
Unemployment figures 17
UK jobs market 18
The IT market
Demand for IT staff 19
Cloud computing 20
IR35 21
Key market indicators:
Skills 22
Job functions 23
Industry sectors 24
IT news 25
Sources Computer Weekly | The Recruiter | The Times | Financial Times | Resourcing | Computing.co.uk | ITcontractor.com |
TheITjobboard.co.uk | ITjobswatch.co.uk | Salary Services | The Skills Market Report on Jobs | BBC Business | Bank of England | CIPD |
National Statistics.gov | The Telegraph | Office of National Statistics | Reuters | Centre for economics & business research (CEBR) | The
Recruitment & Employment Confederation (REC) | E-Skills | UK Bank of Scotland | CWjobs | British Chambers of Commerce

3. Introduction
The latest set of labour market figures makes for positive reading,
with a sharp rise in the number of people in work, fewer
economically inactive, and a chunk sliced off the unemployment
figures.
The economy is looking much rosier, underpinned by UK
manufacturing’s strongest growth for 15 years, the construction
industry growing by over 6%, positive GDP forecasts for 2010 and
2011, and earnings growth of almost 2% for the quarter.
However, any thoughts that the UK is in the pink are ill-placed.
Unemployment is forecast to peak early next
year and the need to significantly cut the
budget deficit, strengthen the banking sector
،،
Recruitment models will
and reduce personal sector debt will limit UK
growth.
become bespoke to
service client needs
The government's planned cuts to public
spending over the next five years have hit
٫٫
confidence, with murmurings that the UK could be heading for a
double-dip recession.
Unemployment has yet to start falling significantly, and the
expected public sector job losses mean another rise is not being
ruled out.
Despite these impending public sector cuts, business confidence
remains buoyant. It’s no longer a case of wringing out the last
drops of resource available, but more about exercising caution
when dipping into the money pool.
As recruiters jostle for business it’s likely that their recruitment
models will become bespoke to service client needs closer than
ever before. The ‘one size fits all’ philosophy may just be a thing
of the past.
Neil Hulse
Business Analyst, Adecco Group
3
3

4. Economic
Economic
outlook
outlook
Headline market indicators
- The UK economy has recovered for two successive quarters
- Unemployment is expected to increase over the next year but at a slower rate
- The UK’s economy is set for an annual GDP growth of 1.3%
- Q2 unemployment rate was 7.8% and there were 2.47m unemployed people
- Annual growth in average earnings was 3.6% in the private sector and 4.4%
in the public sector
- There were 486,000 vacancies in Q2 – up 10,000 on the previous quarter
- Private sector employment declined by one million people during the
recession
UK economy enjoys second quarter of growth
The UK economy grew by a faster-than-expected 1.1% in the second quarter of the
year, according to official data.
The figure - a preliminary estimate from the Office
for National Statistics (ONS) - was almost double
the 0.6% growth rate expected by economists. Manufacturing
It was also a marked pick-up in pace from the
is performing
0.3% growth of the first three months of the year. far better than
Much of the growth came from the key services services
sector, which makes up about three-quarters of
the UK economy.
Manufacturing sees strongest growth for 15 years
UK manufacturing in May grew at its fastest pace in more than 15 years, increasing
by 0.3% on April, whilst David Frost, Director General of British Chambers of
Commerce, announced that manufacturing is “performing far better than the services
sector”.
Manufacturing output rose by 4.3% on the same month a year ago, the
highest rate since December 1994, the Office for National Statistics (ONS)
said. The increase was driven by the machinery and equipment
industries, as well as basic metals and metal products.
The ONS's wider index of production also rose by 2.6% on the year, the
fastest pace since June 2000. On a monthly basis, industrial production
rose by 0.7% in May.
4

5. £22bn wiped
UK recession deeper off the UK
than first thought
Britain's record recession was even deeper than
economy
previously thought, and the economy could still have
contracted in the first quarter of this year were it not for
hefty government spending, official data has shown.
The Office for National Statistics left its earlier estimate
of Q1 growth unrevised at 0.3%, giving an unchanged
annual decline of 0.2%.
Britain faces mixed prospects for Q2, after data
released at the same time showed that services output
contracted 0.3% in April, the biggest fall since January.
During Q1, the biggest rise in government spending
since Q4 2008 added 0.4% to GDP growth, alongside
a 0.9% contribution from gross capital formation.
Imports rose and exports fell in roughly equal measure.
UK GDP growth, quarter on quarter
Source: ONS
The figures suggest a major rebound in exports will be needed to maintain growth
when planned government spending cuts take effect from later this year.
As part of a major annual revision of previous quarters' GDP data, the ONS said that
the economy contracted by 6.4% between the second quarter of 2008 and the third
quarter of 2009, more than the 6.2% previously estimated.
The resulting fall was the biggest since quarterly records began in 1955 and wiped a
total £22bn off the economy - £2bn more than previously thought. Britain's deficit
with the rest of the world widened to £9.6bn in the last three months of 2009, more
than twice as much as expected and compared with a surplus of £521m in Q4 2009.
5

6. World Cup generates £1.6bn for the UK economy
The World Cup generated an estimated £1.6bn short-run boost to UK GDP in June &
July due to increased consumer expenditure and business spending on advertising.
ASDA estimated that beer
and wine sales increased by
37% and 41% respectively
2018 World Cup as people held “World Cup
parties” – compounded by
would create the good spell of weather.
revenue and jobs The knock-on effect of the
World Cup will be the
distorted retail sales figures
as consumers are likely to have brought forward consumption that would have
otherwise occurred later on in the year.
…but hosting 2018 World Cup is the real golden goose
The British economy would be boosted by £3.2bn if England hosts the 2018 World
Cup, according to a study by PricewaterhouseCoopers.
Setting out the economic case for England's bid, a group of business leaders
including Lord Alan Sugar and the British Airways chief executive, Willie Walsh, said
“Landing the tournament will create revenue and jobs, helping to transform
communities in many cities," the group said in a letter to the Daily Telegraph. "It will
open up opportunities for young people to learn about teamwork, competitiveness
with integrity and other skills needed in business."
It is expected that the 2018 tournament will go to Europe, where Russia plus joint
bids by Spain/Portugal and Holland/Belgium are up against England.
UK economy needs to grow by 2.5% to offset job cuts
The UK economy will need to grow by at least 2.5% per year, to offset impending
public sector jobs cuts, with only slightly less growth having dire consequences for
job prospects, according to the Chartered Institute of Personnel and Development.
The UK recorded a 49,000 fall in unemployment to 2.47m in the three months to May
and a fifth successive fall in the claimant count, which was down by 20,800 to 1.46m
in June.
The Office for Budget Responsibility’s (OBR) current forecast
predicts the economy will grow by more than 2.5% each year The economy will cut
from 2012-15, while employment levels are predicted to grow 300,000 jobs by 2012
next year (2011) and continue to rise through to 2015.
The CIPD, by contrast, on only slightly more pessimistic growth assumptions,
forecasts the economy will cut 300,000 jobs by 2012 before renewed job creation
boosts employment by 2015 to around 100,000 but far short of the 1.3m extra jobs
the coalition government is hoping for.
6

7. British Chambers of Commerce
UK Economic Forecast highlights
- New forecasts show positive growth - The need to cut significantly the
UK GDP of 1.3% in 2010 and 2.0% in budget deficit, strengthen the banking
2011, after a very large GDP decline sector, and reduce personal sector
in of 4.9% in 2009. debt will inevitably limit UK growth in
the next few years.
- In the 2008-09 recession, UK GDP
fell over six consecutive quarters - China & India have avoided
(starting in Q2 2008 and ending in Q3 recession altogether and are growing
2009) and recorded cumulative at a faster pace than both the US and
declines of 6.2%. Europe.
-This is a much bigger cumulative - Manufacturing & services sectors are
decline than in the recession of the likely to record positive annual
early 1990s, when GDP recorded average growth in 2010 & 2011. But
cumulative declines totalling 2.5%. construction is set to show a small
average decline in 2010, before
- After mid-2009, UK labour market modest growth in 2011.
trends improved markedly. However,
labour market trends have worsened - New forecast indicates that
slightly since the beginning of 2010. manufacturing output, in annual
average terms, will record positive
- Inactivity is increasing at a rapid growth of 3.0% in 2010 and 2.0% in
pace; full-time employment is falling; 2011, after declining by 10.5% in
and private sector employment has 2009.
declined by almost 1 million people
between mid-08 and end-09.
- New forecast envisages that total
unemployment would rise from 2.51m UK GDP - positive growth of
(8.0% of workforce) in Q1 2010, to a 1.3% for 2010 and 2% for 2011
peak of 2.65m (8.4% of workforce) in
Q1 2011.
- The aggressive deficit-reduction - The earnings growth for regular pay
programme that the new coalition (excluding bonuses) was 1.9% for the
government plans to implement may 3 months to March 2010, up from
result large declines in public sector 1.7% for the 3 months to February
employment. 2010.
- If recent big inactivity increases are - Earnings figures show a persistent
reversed, as discouraged workers sharp contrast between the public and
return to the labour force, there is a private sectors, with pay in the public
danger that unemployment would sector continuing to grow at a much
increase. faster pace.
- The Bank of England cannot ignore - Excluding bonuses, annual growth in
the risk that inflationary expectations average earnings in January-March
would worsen, and its own credibility 2010 was 1.2% in the private sector,
would be questioned, if inflation stays and 4.0% in the public sector.
for long above the 2% target.
7

8. - UK Bank Rate will stay at 0.5% until
about November 2010; thereafter, we
expect modest increases, to 1.00%
before end-2010 and to 2.50% by the
end of 2011.
- In 2009 UK GDP fell 4.9%; against
GDP declines of Germany (-5.0%),
Japan (-5.0%), and Italy (-5.0%). But
Britain’s 2009 growth performance
was worse than that of the US (-2.4%)
and France (-2.2%).
- US growth remains consistently
stronger than in both the UK and the
Eurozone.
- Since the business sector will drive
any sustainable recovery, it is vital to
avoid new business taxes, higher
NICs, and measures that damage
initiative, enterprise, and innovation.
- Over the next 4-5 years, growth of
annual UK GDP is likely to average
just under 2%, considerably less than
the 2.7% average growth between 03
and 07. Unemployment
- New forecasts envisage that
unemployment could rise from 2.51m
could rise to a
(8.0% of workforce) in Q1 2010, to a
peak of 2.65m (8.4% of workforce) in peak of 2.65m
Q1 2011.
- Since the UK recession started in the
in Q1 2011
spring of 2008, UK unemployment has
risen by almost 900,000.
8

9. Regional
metrics
UK’s biggest increase in economically active people Unemployment up 16% on Q1
Employment up 2.75%
1,000 new apprentices taken on by NHS North West Increase of 43,000 economically active people
Little improvement in unemployment levels
Unemployment down nearly 19% on Q1
Unemployment up 17%...the highest in the UK Only 3.9% on jobseekers allowance
Employment & unemployment levels remain static Ave. house price up 17% to £406,608
Highest Q2 house sales in the UK (31,000)
North East
- 6.7% of the population claiming Jobseekers allowance – Middlesbrough being the
highest claimant area (7.7%), and Durham the lowest (2.5%)
- 68% (1.16m) of the population in employment in Q2
- Employment levels up by 32,000 on Q1, and up 21,000 on a year ago
- Average house price up 7% on a year ago to £143k – Northumberland saw the
biggest increase (+11.1%) whilst Middlesbrough saw the biggest decrease (-10.5%)
where the average price for a terraced house is £75k
North West
- 5.2% of the population claiming Jobseekers allowance – Liverpool being the
highest claimant area (7.2%), and Eden the lowest (1.3%)
- 71% (3.13m) of the population in employment in Q2
- Economically inactive rate up by 12,000 on Q1, but down 9,000 on a year ago
- Average house price up 6.3% on a year ago to £153k – Halton saw the biggest
increase (+17.5%) whilst Merseyside flat lined
- Toyota say they want to shed up to 150 jobs from the company’s engine plant on
Deeside
- NHS North West has further invested in its workforce programme by introducing
1,000 new apprentices
- Liverpool’s oldest department store, Lewis's...closed in June with the loss of more
than 200 jobs. The store will be turned into a hotel and retail complex...Merepark,
who saved the store from administration in 2007, said the redevelopment will create
up to 1000 jobs in the area
9

10. Yorkshire & Humberside
- 151,000 (5.7% of the population) claiming Jobseekers allowance – Kingston upon
Hull being the highest claimant area (8.6%), and Richmondshire the lowest (1.8%)
- 70% (2.4m) of the population in employment in Q2
- Employment levels up by 52,000 (1.1%) on Q1, and up 2.1% on a year ago
- Average house price up 11.3% on a year ago to £158k – Kingston upon Hull saw
the biggest increase (+14.8%) despite having an average price of sub-£100k
East Midlands
- 166,000 unemployed – an improvement of just 1.2% on Q1 2009
- 6.7% of the population of Leicester are claiming jobseekers allowance, compared to
1.6% in Rutland
- 73% (2.11m) of the population in employment in Q2
- Employment levels dropped 42,000 (2%) on Q1, whilst economically inactive
people increased by 65,000 (up 11.4%)
- Average house price up 7.2% on a year ago to £160k – Leicestershire saw the
biggest increase (+16.5%) whilst Nottingham saw prices fall by 3.6%
West Midlands
- 6% of the population claiming Jobseekers allowance – Wolverhampton being the
highest claimant area (8%), and Stratford-upon-Avon the lowest (2.1%)
- 70.6% (2.42m) of the population in employment in Q2
- Unemployment down 18.7% (43,000) on Q1,
and 10% (23,000) on a year ago
- Average house price up 10% on a year
ago to £175k – Warwickshire saw the
biggest increase (+19.4%) whilst Shropshire
Unemployment in London
saw minimal movement (+0.5%). House
prices in Stratford-upon-Avon increased by
was the UK’s biggest
28%. increase
East
- Only 3.9% of the population claiming Jobseekers allowance – Great Yarmouth
being the highest claimant area (6.1%), and South Cambridgeshire the lowest (1.7%)
- 75.7% (2.77m) of the population in employment in Q2
- Employment levels dropped by 33,000 (1.19%) on Q1, whilst economically inactive
people increased by 5.8%
- Average house price up 14.7% on a year ago to £203k – Suffolk saw the biggest
increase (+18.9%) where the average price of a detached house is £298k
South East
- Highest total of economically inactive people in Q2 (73,000) – an increase of 7.6%
- 3.2% of the population claiming Jobseekers allowance – Hastings being the highest
claimant area (6.5%), and Hart & West Oxfordshire the lowest (1.6%)
- 77% (4.15m) of the population in employment in Q2, whilst 6.4% were unemployed
- Employment levels remained constant (-0.57%) but unemployment rose 2.57%
- Average house price up 16.2% on 2009 to £272k – Portsmouth & Isle of Wight saw
the biggest increase (24%) whilst Windsor & Maidenhead saw prices drop 8.8%
10

11. London
- 4.5% of the population claiming Jobseekers allowance – Hackney being the highest
claimant area (6.7%), and City of London the lowest (1.6%)
- 69% (3.7m) of the population in employment in Q2, with 382,000 unemployed (9%)
- Employment levels up by 28,000 (0.75%) on Q1, and up 30,000 on a year ago
- Economically active population increased by 57,000 (1.4%) on Q1 and 1.2% on a
year ago
- However, unemployment in London was the UK’s biggest increase (+7.59%)
- Average house price up a whopping16.6% on a year ago to £407k – Kensington &
Chelsea (where the average house price is now almost £1.3m) saw the biggest
increase (46.7%) whilst Barking & Dagenham was the only area to decrease (-0.3%)
Jobs in the City increase 49%
year on year
The average salary Summary of key findings:
in the City was £53k - 47% expect overall City hiring levels to
increase, and 29% expect it to stay the
same as H1 2010 in the second half of
this year.
- New job creation was cited by a third of managers to be the focus for hiring in H2.
- 55% stated that finding good candidates with the right skills and experience was
more difficult than a year ago.
- 42% of managers felt that the structure of remuneration packages was the top
priority. Competitors poaching staff was the next significant concern for 41% of
managers and a shortage of talent was identified by 30% of managers.
- 71% anticipate that the bonus element of compensation packages will remain the
same and only 17% of managers expect a rise.
- When asked about salaries, 48% of managers expected the average salary to stay
the same in H2 2010 although 47% thought it would increase.
- The average salary for those who secured new jobs in the City was £53,231, only a
4% decline from the average salary of those taking up new roles in May 10.
City Jobs Market Highlights Hiring expectations in the London
New job opportunities in the financial Financial Services sector - H2 2010
services sector fell by 2% from May 10
to June 10, however compared to the Dramatically
increase
same time last year, the number of Decrease
Stay the 2%
newly available jobs in the City 19%
same
increased by 49% in June 10
29%
The number of new professionals Significantly
increase
entering the financial services jobs Dramatically
8%
market rose by 3% month-on-month in decrease
Significantly
June 10, while there was a 60% 1%
decrease
increase compared to June 2009. 4%
Increase
Salaries 37%
The average salary for those securing
roles in June 10 was down 4%
compared to May 10 but rose 6% on June 09 levels. When changing jobs, the
average increase in basic pay received was 19% in Q2 2010 compared to 15% in Q1
2010 and 10% in Q2 2009.
11

12. City hiring market remains stable
The financial services hiring market in London showed a slight 2% downward
fluctuation in the number of newly available jobs, from 5,733 in May 10 to 5,645 in
June 10. However compared to the same month last year, June 10 saw a 49%
increase in new job opportunities from 3,780 in June 09.
The number of professionals entering the jobs market remains at a similar level in
June with a month-on-month 3% increase from 11,730 in May to 12,090 in June.
This also represents a 60% increase in professionals newly active in the financial
services jobs market in June 10 compared to June 09.
Source: Morgan McKinley London Employment Monitor
London 17th most expensive city in Europe
London is the 17th most expensive city to live in Europe, according to the latest Cost
of Living Surveyfrom Mercer. The survey, which covers 214 cities hires five
continents and measures the comparative cost of over 200 items in each location,
including housing, transport, food, clothing, household goods and entertainment,
shows after Moscow, Geneva, Zurich and Copenhagen, the most expensive cities in
Europe are Oslo (11) in Norway, Milan (15), London and Paris (both 17) and Bern
(22) in Switzerland.
South West
- 3.1% of the population claiming Jobseekers allowance – Torbay being the highest
claimant area (4.4%), and Isles of Scilly the lowest (0.6%)
- 75% (2.49m) of the population in employment in Q2
- Employment & unemployment both remained static at 4m and 272,000 respectively
- Average house price up 13.5% on a year ago to £228k – Bath & NE Somerset saw
the biggest increase (26.2%) whilst terraced property prices in Torbay fell by 3.2%
Wales
- Unemployment was up a staggering 17.6% to 131,000 – the same level as Q2 09
- 5.3% of the population claiming Jobseekers allowance – Blaenau Gwent being the
highest claimant area (7.7%), and Ceredigion the lowest (1.9%)
Welsh employment Rates Q2 2010
Neath Port Talbot
Swansea
Carmarthenshire
Pembrokeshire
South Wales
Wales
UK
58% 60% 62% 64% 66% 68% 70% 72% 74%
- 68% (1.3m) of the population in employment in Q2
- Economically active people up 17,000 (1.2%) on Q1 but down (0.35%) on Q2 2009
- Average house price up 2.8% on a year ago to £152k – Powys saw the biggest
increase (18.7%) whilst Carmarthenshire saw the biggest decrease (-10.3%)
12

13. Scotland
- 4.9% of the population claiming Jobseekers allowance – North Ayrshire being the
highest claimant area (6.7%), and Shetland & Orkney Islands the lowest (1.5%)
- 72% (2.44m) of the population in employment in Q2…down 65,000 (-2.66%) on Q1,
which was the biggest fall in the UK
- Unemployment increased by 16.2% (35,000) on Q1 and 3.7% on a year ago
- Against Q1, economically inactive people increased by 5.4% whilst economically
active people dropped 1.13% (30,000)
- Average house price up 5.4% on a year ago to £148k – Inverclyde saw the biggest
increase (26.4%) whilst Moray saw the biggest decrease (-5%)
Scottish private sector recovery slows
Scottish private sector recovery slowed in June, according to the Bank of Scotland’s
purchasing managers’ index (PMI).
The seasonally adjusted index, which
monitors activity across Scotland’s
Recovery in the Scottish manufacturing and service sectors, fell from
53.1 to 52.9. The index also shows that
economy is underway new order and employment growth both
decelerated since May.
Donald MacRae, chief economist at Bank of Scotland, says: “The recovery in the
Scottish economy slowed in June. However, overall growth was achieved by a best-
ever rise in manufacturing output augmenting only marginal growth in the service
sector. While the pace of input cost inflation faced by businesses moderated,
average costs again inflated at a much stronger pace than the UK. Recovery in the
Scottish economy is underway albeit at a slower rate than the UK as a whole.”
Scottish business activity continues its climb
Overall activity across the Scottish private sector economy increased for the twelfth
month in succession during June. Survey respondents linked the latest rise to new
order growth. However, the pace of expansion as signalled by the seasonally
adjusted Business Activity Index was mild and weaker than recorded for the UK as a
whole. The divergence between the performance of manufacturers and service
providers was stark. Scottish service providers registered only a fractional increase in
output during June, while goods producers posted the strongest monthly rise in the
history of the series.
Businesses cautious over new projects
Mirroring the trend recorded for activity, new orders also rose at a weaker pace
during June. Although mild, and weaker than seen at the UK-wide level, the rise was
the fifth in successive months. Higher demand for goods and services was widely
commented on. However, a number of firms indicated that renewed concerns
regarding the sustainability of the recovery had led clients to postpone new projects.
This view was particularly apparent in the service sector, where new business levels
fell on average in June.
13

14. Northern Ireland
- 6.3% of the population claiming Economically (in)active rates in Northern Ireland
Jobseekers allowance – Derry
being the highest claimant area
(7.4%), and Castlereagh the
lowest (3.1%)
- 68% (776,000) of the
population in employment in Q2
- Employment levels up by
29,000 on Q1 (3.74%), and up
2,000 on a year ago
- Highest increase of
economically active people over
the quarter (4.55%), whilst
economically inactive people fell
by a huge 11.4%
- Average house price down
16.8% on a year ago to £169k – Source: ONS
Hartlepool seeing the biggest
increase (25%) and Londonderry
seeing the biggest drop of -34%
London accounted for
25% of all internet job
searches, followed by
Bristol (6%), Manchester
(5%) and Birmingham &
Leeds (4%)
14

15. Economically inactive Unemployment Employment Economically active
Change v Change v Change v Change v Change v Change v Change v Change v
Q2 2010 Q2 2010 Q2 2010 Q2 2010
Q1 2010 Q2 2009 Q1 2010 Q2 2009 Q1 2010 Q2 2009 Q1 2010 Q2 2009
North East 354 -35 -26 121 7 1 1,163 32 21 1,284 39 21
North West 944 12 -9 284 2 -5 3,133 1 17 3,417 4 12
Yorkshire 674 -10 -41 245 17 -8 2,434 27 52 2,678 43 44
East Midlands 568 65 16 165 -3 -15 2,117 -42 5 2,282 -45 -10
West Midlands 714 0 -8 230 -43 -23 2,451 46 31 2,680 2 8
East 654 38 14 196 8 -2 2,773 -33 -6 2,969 -25 -7
1,235 4 -36 382 29 18 3,737 28 30 4,118 57 49
Figures are in thousands and are seasonally adjusted
London
South East 958 73 46 272 7 -12 4,139 -21 -12 4,411 -14 -24
Table 1 - Labour Market Statistics
South West 595 38 -22 168 2 -2 2,505 0 34 2,672 2 32
England 6,696 184 -66 2,061 26 -48 24,451 37 172 26,512 63 124
Wales 427 -9 9 131 23 0 1,314 -6 -6 1,445 17 -5
Scotland 685 37 5 216 35 8 2,443 -65 -9 2,660 -30 0
Great Britain 7,807 213 -52 2,409 84 -39 28,208 -34 158 30,617 50 118
Northern Ireland 290 -33 -9 59 8 6 776 29 2 835 38 8
United Kingdom 8,097 180 -62 2,468 92 -34 28,984 -5 160 31,452 88 126
15

16. Market
indicators
Number of people (000's) Rates (%)
UK labour force survey Change v Change v
Q2 Q2
indicators Q1 2010 Q1 2010
Number in employment & rate 28,984 160 72.3 0.3
Unemployment (aged 16+) 2,468 -34 7.8 -0.1
Inactivity (working age) 8,097 -62 21.3 -0.2
Average weekly earnings Q2 average weekly pay Annual growth since Q2 2009
Total pay (inc. bonuses) 453 2.7
Regular pay (exc. Bonuses) 428 1.8
Employment continues steady rise
The number of staff appointments grew in June, according to a survey by the
Recruitment and Employment Confederation (Rec).
It reported a further strong rise in permanent staff placements, with engineering and
construction the most sought after. However, the pace of growth was the slowest for
five months. Rec said more people were available for permanent and temporary
work in June compared with previous months.
Rec's chief executive, Kevin Green, said: "This is an
encouraging sign that the jobs market is stable and, …some sectors such
in some sectors such as construction and
engineering, rapidly growing.
as construction and
engineering, are rapidly
"However, with the predictions of up to 600,000 job
losses in the public sector, it is still too early to tell growing
how much of a knock-on effect this will have on job
creation in the private sector."
Brakes applied to public sector hiring
Recruiting great staff while staying within company budgets is set to remain a
challenge for employers this year, according to new research by the Chartered
Institute of Personnel and Development (CIPD) found.
Two thirds of organisations have experienced hiring difficulties, despite the reduction
in recruitment activity during 2009 and the burgeoning labour market. Some 80% of
those surveyed listed attracting and recruiting key staff as their top objective.
Half the public sector organisations surveyed said they planned to implement a
recruitment freeze, compared with just 16% of private sector firms, while nearly 70%
plan to reduce their number of new recruits, compared with 32% in the private sector.
The increased pressure on budgets has led more organisations to focus on in-house
talent, with over half of them using methods to retain rather than recruit new staff.
16

17. Unemployment figures on the slide
Unemployment in the UK now stands at 2.47 million, following a fall of 49,000 in
Q2. Meanwhile, the number of people claiming Jobseeker's Allowance fell in
June by 3,800 to 1.46 million, the Office for National Statistics (ONS) said.
The latest figures also showed that the number of economically inactive people
- those out of work and not seeking employment - fell by 0.2% to 8.1 million.
UK unemployment 1992 - 2010
Source: BBC Business
The UK long-term unemployment rate is currently lower than in the mid-1980s and
early 1990s although it has continued to rise in recent months. The lower level of
long-term unemployment indicates that any hysteresis-type effect may be smaller
than suggested by previous experiences.
But there remains considerable uncertainty about how the labour market will evolve
and, given the rise in the unemployment rate to 8%, there remains a risk that long-
term unemployment might rise further.
Unemployment rate by duration
Source: Bank of England
17

18. UK jobs
market
recovery set
to stall
Recovery in the jobs market will
"stall" this year as demand for
workers in the public sector falls,
new research has warned.
According to the Chartered
Institute of Personnel and
Development (CIPD), a third of
employers expect to cut jobs in
the next three months.
Across all sectors employers are expecting to make an average of 5.5% of their
workforces redundant, the survey of 600 companies suggests, up from the 3.6%
average cut being considered three months ago.
Despite the threat of cuts, the CIPD's net employment index, which measures the
number of companies planning to hire against the number planning to lose staff, is
still in positive territory at +2, down from +5 three months ago.
But the difference between the public and private sectors is stark. For the private
sector alone, the index shows strong hiring intentions at +19 while in the public
sector, the index gives a reading of -35.
Jobless rise predicted
"The employment situation looks like a case of the good, the bad and the ugly," said
Gerwyn Davies, CIPD public policy adviser and report author. "While the number of
employers planning to make redundancies is similar to that in the spring, this trend
masks the true extent of forthcoming job losses in the third quarter of the year. The
big question is whether the private sector can create new jobs in sufficient numbers
and quickly enough.”
"The CIPD believes that a rise in unemployment in the next two years remains a
distinct possibility as the private sector recovery is offset by the 600,000 public sector
job losses the government expects over the next five years."
In October the scale of cuts to government
departmental budgets will become clear when the A rise in
government announces the results of its spending
review. Cuts of 25% are anticipated for most
unemployment in the
departments. next two years remains
According to the CIPD's survey, job losses are most
a distinct possibility
likely in local government.
18

19. The IT
market Confidence
continues to
sustain the
Demand surges for
IT staff in 2010 market
Despite a 21% drop in public sector job
postings in the last quarter, CWJobs.co.uk
and JobAdsWatch.co.uk reveal that overall
the IT jobs market for permanent staff has
increased at its fastest rate for over three
years.
For the fourth consecutive quarter there has
been an increase in the number of jobs
advertised, with 8% more since March 2010.
Since the government braced the nation for a
high number of public sector job cuts, 21%
fewer public sector jobs have been advertised and public sector job posts have
dropped from fourth to fifth place in sector rankings. However, contract work in the
public sector remains relatively buoyant.
Permanent job postings for the financial and media sectors continue to grow, with an
8% and 12% increase respectively.
Richard Nott, website director of CWJobs, says: “We were all aware that the IT
sector would be affected by public sector cutbacks, but it’s encouraging to see that
overall job postings are continuing to increase.
“With contract work still available at the moment, there are opportunities in the public
sector for those willing and able to be flexible.”
Dave Pye, executive committee member of the REC technology sector group,
suggested that the figures are very encouraging and show that industries are keen to
push on with growth projects delayed during the recession.
"A lot of the growth we have seen has been for
business technology skills, rather than just
Just 3% of UK businesses plan pure-play technology skills, for areas like
to replace IT staff to fill the financial services or pharmaceuticals,
skills gap left by the recession underlining demand for people that can get
things done," he said.
"The demand we have seen will ease off somewhat, but we still expect growth for the
next few months as confidence continues to sustain the market and help companies
grow."
"It's a case of wait and see in the public sector at the moment as to how cuts will
affect IT workers. But certainly there will be projects that need completing, so work
could remain if only on a contractor basis rather than full time," he said.
19

20. Cloud computing skills
will make you more
employable
Four in 10 IT professionals predict that increasing use of cloud computing will create
more jobs, according to IT jobs specialist CWJobs.co.uk.
The research shows that 70% believe cloud computing skills and experience will
make them more employable. Only 28% believe cloud computing will mean less jobs.
Q2 saw an 8.1% increase in IT jobs advertised but IT recruitment remains 170%
down on 2008 levels.
Richard Nott, website director of CWJobs, says: “While it is not yet clear which
specific skills will be useful for cloud computing, the majority of IT professionals do
believe there will be a need to adapt to capitalise on the changing IT landscape and
that now is the time to do this.”
Cap on foreign workers “unresponsive to the market”
The proposed cap on non-EU workers announced by the Coalition Government is
unlikely to significantly cut numbers of foreign IT workers coming to the UK,
according to the Association of Professional Staffing Companies (APSCo).
APSCO says this is due to the cap excluding intra-company transfers, a type of work
permit which allows employers to bring workers to the UK from overseas offices.
Ann Swain, chief executive of APSCo, says:
“More than 80% of non-EU IT workers coming to
the UK on work permits are intra-company 64% of businesses admitted
transfers, so if the government doesn’t look at this they will be investing in IT to
issue, the cap will be little more than an empty help drive business forward
gesture.
“We would prefer tightening up the intra-company transfer rules rather than an
outright cap. A cap would be unwieldy and unresponsive to the market. What if an
employer cannot fill an urgent, niche requirement but the cap on intra-company
transfers has already been reached?
“The new rules will stop small UK-owned IT businesses from plugging skills gaps, but
won’t stop IT giants with global office networks from bringing staff to the UK on an
industrial scale.”
20

21. Government to dismantle IR35
The Government said that it is going to simplify and streamline the tax system to
encourage foreign investment. To this end they have set up The Office for Tax
Simplification which will look at tax relief, allowances, exemptions etc.
The Coalition had previously said that they would scrap IR35 in a review of business
taxation so this must be part of what is coming.
Mr Gauke, the Exchequer secretary, said "The tax system created by the previous
government was overly complex and has made the tax affairs of millions of families
and businesses across the UK extremely complicated. We need to reduce the
complexities in our tax system and the coalition is committed to delivering that goal.”
At the moment freelancers and contractors receive a number of tax reliefs (for
instance on travel expenses and subsistence) to reflect the risks of the flexible
workforce.
Any moves by the Government, which spends £16bn on IT projects each year, to
undermine the flexible workforce market, which UK plc is relying on more and more
in these difficult times, will backfire on the UK economy.
Stuart Davis, Chairman of the FCSA, commented, “The FCSA hopes that the OTS is
not just government window dressing or an excuse to remove important tax reliefs,
but is independent of Treasury and will have real teeth in simplifying tax for the
different labour markets in the UK.”
The
government
spends £16bn
on IT projects
each year
21

22. KEY MARKET INDICATORS QUARTER TWO 2010
- Demand for permanent IT jobs up by 8.1%
- Contract vacancies up 11%
- Vacancies in finance up 7.9%
- Developers pay increases by 3.3%
As reported on page 19, the IT jobs market for perm staff increased at its fastest rate
for more than three years with 8.1% more jobs advertised. The findings are in line
with other economic indicators showing an improvement in the economy and
coincide with the UK coming out of recession during the latter part of 2009. However,
when compared with the start of the financial crisis, IT recruitment is still down by
170% and is at a level not seen since January 2004.
Top 10 IT contract skills in demand
% change Vacancies
Skill Daily rate on Q2 2009 (3m)
SQL £425 +13% 9,600
Oracle £425 +6% 7,209
Java £500 +14% 7,079
.Net £400 +14% 6,276 Developers made
SQL Server £375 +14% 5,823 up 41% of all jobs
C# £475 +6% 5,793
UNIX £450 +17% 4,905 advertised
XML £425 +29% 3,727
SAP £445 +5% 3,686
MS Excel £375 +21% 3,319
The dominant job function being sought is software developer. This quarter
developers (all grades) made up over 41% of all IT jobs advertised. It is here that the
main impact of the increase in demand is being seen with advertising up by 8.3%
quarter on quarter.
From the start of the year demand for developer-type roles has gone up by 15.1%.
Elsewhere, prospects are equally as good with virtually all vacancies such as
support, administration and networking increasing in volumes. However, demand for
senior management is down by 1.4%, but this does not include project manager
roles, for which job offers are up by 4.6%.
Top 10 IT permanent skills in demand
% change Vacancies
Skill Salary on Q2 2009 (3m)
SQL £40,000 +7% 22,638
.Net £40,000 +14% 19,643
C# £41,500 +11% 17,886
Java £50,000 +16% 17,489 Job offers for
SQL Server
Oracle
£38,000
£47,500
+9%
+8%
17,327
12,757
Project Manager’s
UNIX £50,000 +11% 10,687 up by 4.6%
Linux £44,000 +10% 10,234
XML £40,000 14% 9,860
ASP.net £37,500 +7% 9,840
22

23. In the first quarter of 2010, contract recruitment increased by 10.1%, during the
second quarter 2010 the increase is 11.2%, suggesting recovery is well under way.
Permanent salaries reflected the state of current employment levels with average pay
increasing by just 1.1% compared with a year ago. This is somewhat higher than the
0.7% recorded in the Q1 2010.
Top 10 IT contract job titles in demand
% change Vacancies
Job Title Daily rate on Q2 2009 (3m)
Developer £425 +13% 15,085
Analyst £425 +13% 14,121
Business Analyst £475 +12% 7,108
Project Manager £450 +12% 5,148 Perm salaries
Consultant £425 +6% 4,373 increased by 1.1%
Architect £475 - 2,665
Test Analyst £320 +7% 1,365 on a year ago
Support Analyst £375 +11% 1,331
Designer £360 +20% 1,137
DBA £350 +3% 937
These general figures tend to hide the wide variations seen in salaries dependent on
the job function, region, business sector and software skills.
Nationally developers have seen pay offers up by 3.3% over the past year. Average
increases for networking staff are up by 2.8%, but pay for support roles such as
system administration and PC support remain stagnant with little movement from last
year. Contract rates started to improve in the first quarter and have continued to
improve in the second quarter with average rates up by 3.2% compared with twelve
months ago.
Top 10 IT permanent job titles in demand
% change on Vacancies
Job Title Salary Q2 2009 (3m)
Developer £40,000 +14% 31,458
Analyst £40,000 +11% 17,179
Consultant £52,500 +5% 9,510
Business Analyst £50,000 +11% 6,238 Contract rates
Architect £66,000 +6% 5,678 continued to
Project Manager £52,500 +5% 5,651
Web Developer £32,500 +8% 3,627 improve in Q2
Support Analyst £32,500 +5% 3,216
Software Engineer £38,000 +1% 2,795
Administrator £36,000 +3% 2,514
23

24. Contract rates in retail and telecoms took a dive in Q2; -2% and -4% respectively.
Despite this they were both in the top four industry sectors in terms of jobs
advertised. Typically, finance dominated the contract vacancies, accounting for a
quarter of all adverts placed. In the same vein, investment banking commands the
highest average rate of £538/day – an 8% increase on a year ago.
Law and legal vacancies saw the highest year-on-year change…jumping 23% on Q3
2009. Outside of the top 10, rates in the pharmaceutical industry increased 23% on
a year ago to an average of £400/day, whilst contracts in the electrical industry
bombed 27% to an average of just £275/day.
Top 10 industry sectors (contract)
% change Vacancies
Sector Daily rate on Q3 2009 (3m)
Finance £450 +6% 14,882
Investment Banking £538 +8% 6,912
Retail £394 -2% 2,654
Telecoms £325 -4% 1,954 £538 – average
Insurance £425 +13% 1,842 daily rate in
Government £375 +3% 1,482
Marketing £350 +13% 1,113
investment banking
Healthcare £350 +8% 814
Legal £475 +23% 736
Education £350 - 727
Over 26,000 adverts for perm positions were placed in the financial sector during
quarter two, commanding an average salary of £52k. Telecoms saw the biggest
year-on-year salary increase (14%), whilst investment banking jobs typically
command around the £70k mark.
Further down the pecking order, the biggest climbers were retail banking, social
media and legal. Conversely the sectors on the slide include aerospace, military and
police vacancies.
Top 10 industry sectors (perm)
% change Vacancies
Sector Salary on Q3 2009 (3m)
Finance £52,500 +5% 26,283
Pensions £65,000 +4% 12,498
Investment Banking £70,000 +4% 5,551
Marketing £37,500 +7% 5,292 Telecoms salaries
Healthcare £40,250 +1% 5,098
Retail £50,000 +11% 4,659 increase 14% on
Insurance £45,000 +6% 4,541 Q3 2009
Telecoms £45,500 +14% 3,832
Education £42,500 +13% 3,349
Government £50,000 +13% 2,256
Sources: CWjobs.co.uk & ITjobswatch.co.uk
24

25. IT market
news
- IT contract hires increased 45% in the investment banking
sector, according to the latest research by a pre-employment
screening firm.
- Total industry employment offers rose 52% in July compared to a
year ago, but offers declined 2% across quarter two.
- A new joint manifesto has been put out by Britain’s top technology
companies (Logica, Cisco, HP and IBM to new a few) co-ordinated
by e-skills which predicts that 110,000 new technology people will
be needed for the technology sector over the next decade.
They said that even during the downturn the number of technology jobs has risen
even as unemployment soared.
- Transport for London (TfL) has said it is “aware of some problems” with its
congestion charge payments technology, provided by IBM, according to public sector
ICT analyst Kable. The system is supposed to allow fleets, lease companies and
vehicle rental suppliers to receive a £1 discount on the £8 congestion charge if they
register their vehicles online.
- Defence company BAE Systems has seen a 20% reduction in total cost of
ownership of IT assets, and a 90% reduction in its provisioning cycle as a result of
setting up a private cloud, according to its chief IT strategist.
- In 2010, Standard Life will be spending more than £200m to market its retail
proposition - with IT representing a "good lot of it", according to Christian Torkington
(Technology Chief), who has been developing a comprehensive blueprint across his
areas of responsibility to drive a customer-centric approach and respond to changing
business needs.
One of Torkington's first actions from an IT standpoint was to assess the firm's
technology capability and hiring Mark Dixon, a former IBM executive, as the firm's
first ever chief technology officer was an important part of the plan. No redundancies
have been made as a result of the new strategy, says Torkington, adding that there is
"a lot of work to be done" and significant hiring activity has taken place both on the
permanent and contract fronts.
- David Bickerton has been appointed global chief information officer (CIO) at
Centrica. Most recently CIO at Centrica subsidiary British Gas, Bickerton will be
responsible for developing and delivering an integrated IT strategy across the group.
"I am very much looking forward to the challenge of identifying appropriate
integration opportunities while supporting the individual businesses, and we have a
strong team who will continue to work hard to improve and develop our businesses,"
Bickerton said.
25

26. - Small businesses are spending more on IT,
but nearly half of firms surveyed see IT as a
Gartner’s
freelance role rather than an in-house
function. 2010
Skills most in demand among SMEs:
1. PHP
2. SEO/link building
predictions
3. Wordpress
4. Joomla By 2012, 20% of businesses will
5. iPhone Apps
own no IT assets.
6. MySQL
7. HTML
8. Flash game development By 2012, India-centric IT service
9. .Net companies will represent 20% of
10. ASP.Net the leading cloud aggregators in
the market.
- Microsoft has struck new partnerships that
will see its Windows Azure cloud platform By 2012, Facebook will become
appear as a private cloud offering. the hub for social networks
integration and Web
The Azure cloud platform - which provides socialization.
scalable computing power and storage, as
well as a number of other online services
hosted on Microsoft datacentres - is By 2014, most IT business cases
Microsoft's most high-profile cloud push to will include carbon remediation
date. costs.
- Demand for IT workers in permanent In 2012, 60% of a new PC’s total
positions has risen by almost 20 per cent in life greenhouse gas emissions
the past year, as recession worries recede will have occurred before the
and confidence in investing in IT rises. user first turns the machine on.
The Report on Jobs from the Recruitment and Internet marketing will be
Employment Confederation (REC) and KPMG
regulated by 2015, controlling
showed that the percentage of IT staff
employed on a permanent basis had risen by more than $250 billion in Internet
17.8 points to 61.4, up from 43.6 in 2009. marketing spending worldwide.
The figures also rose significantly for By 2014, more than three billion
temporary positions, up from 43.3 to 56.9 of the world’s adult population
over the same period. will be able to transact
electronically via mobile and
The points are calculated from the Internet technology.
percentages of respondents reporting an
improvement, no change or a decline. The By 2015, context will be as
indices vary between 0 and 100, and a
influential to mobile consumer
reading of exactly 50 signals no change on
the previous month. services and relationships as
search engines are to the Web.
By 2013, mobile phones will
overtake PCs as the most
common Web access device
worldwide.
26

27. Oracle has - Security software spending will reach a
worldwide total of £10.6bn this year as the
finally closed industry pulls further clear of recession,
according to a new report from Gartner.
the The figure represents growth of about 11%
against the same time last year, when
OpenSolaris spending on security software added up to
just under £9.6bn. Gartner said in its latest
development Forecast Analysis that in most cases the
economic slowdown had caused a fall in
project investment, but that enterprises are keen to
keep security technology current and will
invest as a result.
- The Environment Agency will use Cap
Gemini’s soon-to-be-launched Merlin
datacentre, which the outsourcing provider
claims is the world’s most energy efficient
and sustainable.
A spokesman from the government
department confirmed that it will begin
using the datacentre in September. Cap
Gemini claims its 30,000 square foot
facility will set a new standard for energy
efficiency
- Oracle has finally closed the OpenSolaris
development project in a move that has
angered the open source community.
OpenSolaris software engineer Steve
Stallion posted on his blog the lengthy
email detailing the closure which was sent
internally to all engineers working on the
project. In essence, Oracle has decided to
release open source versions of Solaris only after the commercial one ships.
- Transport for London (TfL) is looking for a technology provider to supply speed
cameras for a project that it intends to trial. The government department said that
the cameras will be used to "enforce average speed limits in urban areas", according
to GC News.
- Governments need to take advantage of new technologies to enhance cost-cutting
initiatives without reducing their effectiveness, according to a new report from
Gartner.
The analyst firm's From Modernization to Survival report argues that, while budgets
are being reduced, the benefits of technology to further reduce spending are not
being explored.
Services such as public clouds, community source projects, crowd sourcing and
teleworking should all be used to help bring about further cost savings, according to
Gartner, but there are security issues to be overcome first.
27