IT’s big comeback

Singapore’s information technology (IT) sector is en route to a buoyant recovery in 2010. Organisations that held back their budgets during the global financial crisis have now embarked on new IT projects that have reignited heavy investments in both hardware and human capital.

Much of the hiring has already started to take place. While the fourth quarter of each year is usually a slow period for IT recruitment (as most organisations introduce a hiring freeze in preparation for the next year’s budget), 2009 proved to be an important exception.

“There was huge pent-up demand on the back of the financial crisis wherein most companies had very minimal permanent head count approved for the first two quarters,” Sohrab Singh, Manager, IT Financial Services, Robert Walters, told HRM. “The sentiment was to downsize and optimise and all critical hiring was primarily contractual in nature. The third quarter of 2009 saw a return of market confidence and on the back of that there was an increased demand for permanent recruitment.”

Spurred by positive market growth, networking solutions provider Cisco Systems hired over 900 people for roles in the Asia Pacific region during the first quarter of 2010. “Hiring figures are much higher (now) than in 2009 and about 35% of our global hiring is taking place in Asia Pacific,” Jignasha Patel, Director of Staffing, Asia Pacific and Japan, Cisco Systems, says.

Skills shift

A rapidly changing IT landscape is also causing a shift in the type of skills favoured by employers.

While strong, functional IT skills are still in demand, employers are also on the lookout for a new breed of IT talent – business-savvy candidates who are able to deliver a convincing value proposition to their clients.

“In our industry, we continue to look for staff to fill pre-sales or solutions-architect roles,” Jenny Chong, Corporate Recruiting Manager at Red Hat Asia Pacific, an open source solutions vendor, says. “There is always demand for IT professionals who can bridge the technical and sales functions.”

According to Robert Walters, older legacy enterprise resource planning (ERP) applications like JD Edwards are being replaced by more popular names like SAP. This shift is driving demand for IT specialists certified in newer applications.

The financial services sector is calling for software programmers with specialised product or functional knowledge in areas such as eCommerce, fixed income bonds and derivatives, as well as credit and market risk.

“Programmers with only technical experience, or ‘plain vanilla’ programming skills, are becoming less relevant,” Brian Richards, Head, Kelly IT Resources (KITR) Singapore, says. Singh agrees, saying financial organisations are foregoing vendor-based solutions to develop in-house applications and platforms. Traditional implementation consultants are being replaced with more technically-aligned developers.

At Cisco Systems, there is also a huge push towards “advanced” services. “We are looking for talent with robust experiences in areas such as virtualisation, data centres, cloud computing and borderless networks,” Patel says.

Filling talent gaps

Organisations in the IT sector are now adopting a multi-pronged strategy to address their talent gaps.

Fresh graduates at Cisco Systems receive training in both its traditional networking solutions and the latest “Greenfield” technologies such as unified communications, cloud computing and sustainable IT.

Talented employees are encouraged to compete for critical business roles that may not have a direct engineering component. Cisco also looks out for external talents and is seeing an increase in the number of quality applicants from China, India, the UK and Australia.

“In Singapore, there are limitations to the talent pool when it comes to emerging technologies,” Patel says. “As the market and the technologies evolve, we would like to have talent that has both the functional expertise in IT, as well as a broader understanding of how Cisco’s products and services truly drive a robust networking solution for businesses and communities.”

At Red Hat, the focus is on grooming talent from within the company. “We believe it is more important to have people with the right skills and mindset, and the company will provide training and the environment for professional development,” Chong says.

The increase in overall demand has led to an increased incidence of poaching and aggressive headhunting between rival technology providers. According to KITR, employers are also aggressively hiring from overseas markets. “About 40% of IT talent (here) comes from Singapore,” Richards says. “The excess demand is currently met mostly by foreign talent due to the speed at which the industry is growing.”

Europe, the US and Australia are top sources for the most senior-level technology talent, with candidates from those regions offering global experience in the industry.

Companies are looking towards India, China, Vietnam and the Philippines for technical project managers, software developers and network engineers.

While tapping on overseas sources might seem like a quick-fix solution, hiring and retaining foreign talent comes with its own set of issues. “One of the main challenges employers face include developing realistic timelines and the high costs of on-boarding and retaining candidates,” Richards says.

Foreign candidates also have higher salary expectations as they naturally convert their wages into their home currency, which is typically higher. Tax rules and rates also play a part. “It is harder to attract candidates from the US as they have to pay dual tax and hence do not reap the tax benefits that Singapore offers,” Richards says.

Future trends

As the IT industry regains growth in 2010, employers will be on the lookout for candidates who are competent in the latest emerging technologies.

“Virtualisation, cloud computing and open source are the hot technology trends,” Chong says. “Businesses are looking to deploy these technology solutions to improve their capital and operational efficiencies and IT professionals with (these) skill sets will be in the highest demand.”

IT consolidation is another item at the top of the agenda for many companies. According to Robert Walters, 2010 will see an increase in “in-shoring” activities from low-cost countries back to regional headquarters such as Singapore or Hong Kong. While such a move might require a larger up front investment, companies are assured of greater accountability and faster response rates as their key IT employees will be in the same time zones as their operations.

Market demand for speedy and up-to-date global business information is also expected to increase. In line with this, companies are starting to build global and regional data warehouses to gain quick access to such information.

With its limited IT talent pool, Singapore will have to continue attracting IT professionals from the region, as well as the UK, US and Australia.

“This diversity in the talent pool will enhance the skill sets that are available in the Singapore market and set it up for future success – both from a talent and market perspective,” Patel says.