Government Risks Losing Its Edge

Government Risks Losing Its Edge

The federal government may be harming its ability to compete for top talent as it continues to tighten the IT purse strings

Prospects are dimming for ICT contractors looking for work with the federal government, amidst warnings that the feds risk losing their competitive edge in a market still buffeted by major skills shortages.

While a superficial glance at Intermedium’s Federal ICT Labour Hire Index suggests demand for contract labour within the federal government remains strong, the figures are misleading. Only soaring contractor rates and seasonal factors are keeping the index high as the new government’s two per cent across-the-board efficiency dividend begins to take its toll.

And Peoplebank is warning that the federal government may be harming its ability to compete for top talent as it continues to tighten the IT purse strings.

“The Intermedium Federal ICT labour hire index is extremely useful,” Peoplebank chief operating officer Peter Acheson said. “This is the first time anyone has been able to absolutely validate in statistical terms what is happening in terms of federal government expenditure.

“The practical reality is that in the year to June 2007 the federal government spent $40 million and in the year to June 2008 it spent $8 million, so it is not surprising that there is currently a lull in federal government hiring,” Acheson said.

“There is no question that until six months ago we were seeing people coming from other states to work in Canberra, with the contracting rates and the projects available amongst the best in the country, and we are clearly not seeing that any more. And for the first time in three years in the new contracts issued in June we didn’t see any increase in contract rates. So there is a real danger that people who have come to Canberra from interstate to take up projects will look to other IT projects at state government level until things pick up,” Acheson said

“In our view, the outlook is going to remain pretty soft up until Christmas, when some political realities will start to cut in.”

Intermedium’s comprehensive review of the federal government ICT labour hire market for the 2007-08 financial year also shows current demand for contract labour is almost half the level of a year ago, spelling worrying news for contractors looking for government work in coming months.

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Tags governmentICT labour hire indexpeoplebank

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