According to recruitment and human resource outsourcing specialists Robert Walters, the Asia Pacific is currently experiencing what is likely to be the fastest turnaround in the IT recruitment market in history. This is particularly evident in markets such as Hong Kong and Singapore, where job opportunities available through Robert Walters in IT have more than doubled in the last six months.
Roger Olofsson, associate director, IT&T permanent and contract divisions with Robert Walters, says that, if the global economic recovery is sustainable, this bode well for the IT job market going in to 2010. He believes the need for senior IT executives to be based in the Asia Pacific could soon be “greater than ever before”.
“The Asia Pacific is in many aspects taking a leading role in the global recovery,” says Olofsson. “Key players in many industries including financial services, IT, packaged consumer goods (PCG) now firmly believe the Asia Pacific has reached enough of a critical mass of mature markets to represent significant growth opportunities in the near future.
“Most companies would single out this region as one of the most important theatres in which to compete successfully, to reach a global leadership position in the future.”
Olofsson says that the IT industry, specifically, will be able to capitalise on the market growth in general and the pent-up demand as a result of delayed IT investments over the last 18 months.
“Specifically, we are seeing more focus and interest from organisations in the areas of ERP, data warehousing, business intelligence, risk management, security, cloud computing and information management,” he says.
A sluggish 2009
Robert Walters believes 2009 could be characterised as ‘sluggish’, to say the least, with job losses at the senior end in most markets, Japan and Hong Kong being hit the hardest, followed by Singapore. However, the situation has been nowhere as severe as in the aftermath of the dotcom burst and global slowdown in year 2000.
“Interestingly, Malaysia has experienced less of a downturn than most other more developed markets in Asia,” says Olofsson, “one of the reasons being government initiatives attracting investments in the IT sector related to the multimedia super corridor, particularly in the infrastructure and data centre space.”
He says it might be hard to imagine, given the global economic crisis which appears to be tailing off, that the IT industry might find itself, faster than we thought, back in a ‘war for talent’ scenario.
“As such, it is important for organisations out there to start preparing for a talent short market and to rebuild recruitment competencies, refocus on talent attraction management and craft creative and effective top talent retention management and people development strategies.
Another aspect of importance to look at is compensation models and to make sure they are being calibrated with a fast-moving market in order to stay competitive.” Olofsson sees the potential for more of an interim management market to start developing.
“We have recently seen examples of that with organisations hiring senior executives on fixed term contracts to solve IT-related problems, turn around IT businesses or to open up new markets,” he says.
Global executive search firm, Egon Zehnder, one of the top five in the world, says 2009, the Year of the Ox, was definitely “a bear year”.
“Clearly, the financial services industry suffered most heavily, and the plans of many such institutions to expand their presence in Asia were put on hold or cancelled,” said Nick Chia, Egon Zehnder’s head of technology and communications practice, Asia Pacific.
“The semiconductor sector also suffered as it goes through increasingly short business cycles,” says Chia. “Other sectors were not spared, but they suffered less.
“IT executives who focused on infrastructure, the ‘supply’ side, were more at risk of being let go, and their functions were outsourced, and their management positions downgraded,” Chia says.
Egon Zehnder is seeing companies starting to hire senior IT executives again.
“We expect the financial services sector to recover and continue on the expansion into Asia that they started before being stopped by the economic downturn, particularly into regional hubs in Singapore, Shanghai and Hong Kong,” says Chia.
“For consumer product companies, we see India, China and Indochina (especially Vietnam) being geographic focus areas. Life science and pharmaceutical companies appear to be focusing on three major markets: Japan, China and India.”
Meg Ambrose, head of Heidrick & Struggles’ CIO practice in the Asia Pacific says 2009 has been “a challenging year for all”.
Ambrose says the year started with an emphasis on recruiting CIOs who could take cost out of the business and reduce IT spending. “This morphed over quarter two 2009 to a focus on CIOs who were very cost-conscious but also innovative and would focus on business process re-engineering as a way to streamline and deliver more efficiencies,” she says.
Heidrick & Struggles has found that, in Asia, the third quarter has seen significant increased activity in IT hiring, especially for the investment banks.
“Many of the regional CIOs have commented that they cut hard, fast and deep at the onset of the GFC [global financial crisis], with the expectation that they would not be rehiring for at least 18 months,” Ambrose says. “However, the market recovery in Asia has occurred much quicker than anticipated and hence, the level of hiring going on currently is competitive and bringing up compensation levels quickly, especially at the VP level.
“Additionally, in the project office across Asia, again, we have seen increased activity as postponed projects get kicked off with the focus being on cost reduction and innovation around business efficiencies. Project managers are in high demand.
“Middle and back office operations have seen a lot of rationalisation but are back-hiring strategic positions, or promoting internally where possible.”
Looking to the year ahead, Ambrose says that “given the downscaling that has gone on, we are likely to see greater thought on smarter operations, for example, the use of shared services centres is likely to increase to more parts of the operations value chain, such as payroll, HR, expense management”.
Scale is the key
“Resourcing will start to be outsourced too, as scale is key here,” she says. “So emphasis is on head of shared services, business services and corporate services positions.”
From the technology perspective, Ambrose expects more emphasis on strong program managers to run PMOs across all industries. “We believe we will continue to see the CIO/CTO combination,” Ambrose says. “A commercially focused CIO who doesn’t necessarily have the technology background, coupled with a strong CTO who can implement the strategic plan.”
The Hudson Report, for quarter four 2009 surveyed 2,000 key employment decision makers in August this year from multinational organisations in China (Beijing and Shanghai), Hong Kong and Singapore.
Hudson, a professional staffing, outsourcing and human capital solutions group, found that overall, hiring expectations in China were rising for the first time in more than a year. Some 39 per cent of Chinese firms forecast headcount growth, a more than 10 per cent increase on expectations for the same quarter in 2008.
The Hudson Q4 2009 Report found that Hong Kong has the largest rise in expectations, to 35 per cent this quarter and the proportion of employers expecting to retrench staff is lower than in the other markets.
In Singapore, 34 per cent of respondents planned to increase headcount in the fourth quarter, compared with 26 per cent in quarter three. The proportion forecasting staff reductions has fallen sharply, from 14 per cent to five per cent.
Singapore’s Information Development Authority (IDA) chief executive officer, RADM(NS) Ronnie Tay, told a youth infocomm seminar in November that “infocomm will continue to be a high growth sector” for the Lion City.
“This has resulted in a high demand for infocomm professionals in areas such as software development, software design, business process outsourcing management, solutioning and architecting and infocomm security,” Tay says.
“Professionals who combine technical ICT skills with domain knowledge of specific industries are in even greater demand,” he says. “Such hybrid ICT professionals are able to leverage on technology to drive and transform businesses, enhance service offerings and increase the overall competitiveness of their organisations.”
Hudson says that, in all three markets surveyed in the quarter four report, the respondents’ top human resource priorities for 2010 were talent development and improving retention.
In all three markets, the Hudson respondents reported that the higher the position, the harder it was to find local candidates with the required skills and experience.
From research house Gartner’s perspective, because of the worldwide economic recession, “many organisations have already cycled through various IT staffing changes that were defensive in nature, often shortsighted and aligned with an IT strategic plan that was misaligned to the realities of recession”.
Kurt Potter, director, Gartner Research, says that often, IT staffing changes are off plan and related to over-reaction to the panic that occurred during the depths of this recession.
Potter says that, since many enterprises choose 1 January as the beginning of their financial fiscal year, 1 July often heralds the official start of the six-month IT budget cycle in preparation for 2010 IT strategic plans.
“During this annual planning process, many IT leaders will have to live with the shortcomings of previous IT staffing decisions and take corrective action to prepare for the return to growth,” he says. MIS Asia
Follow CIO NZ on Twitter @cio_nz.
Join the CIO New Zealand group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.