IT Recruitment

Published by: Key Note Publications Ltd

Published: Aug. 1, 2008

Table of Contents

Executive Summary

1. Introduction

THE MARKET

DEFINITION

2. Strategic Overview

MARKET DYNAMICS AND SEGMENTATION

Increasing Demand Since 2004

Table 1: The Number of People Employed in the UK in ICT Occupations and Computer-Related Activities (000), April to June 2006 and 2007

Table 2: The Number of Quarterly IT Vacancies Notified to Jobcentres in Great Britain by Type, May, August and October 2005-2007

Job Advertisements

Salaries

Benefits

Encouraging IT Staff to Change Jobs has Become an Issue

Perpetuation of Skills Shortage

Table 3: E-Skills Vacancies by Type (number and %), 2005 and 2007

Table 4: Actions Taken to Combat Skills-Shortage Vacancies (%), 2005 and 2007

Market Size

Table 5: The IT Recruitment Agency Market by Invoiced Sales at Current and Constant 2000 Prices (£m), Years Ending December 2003-2007

Figure 1: The IT Recruitment Agency Market by Invoiced Sales at Current and Constant 2000 Prices (£m), Years Ending December 2003-2007

THE LEGISLATIVE ENVIRONMENT CONTINUES TO BE TOUGH

IR35

The Conduct of Employment Agencies and Employment Business Regulations 2004

Finance Bill 2007

The EU Temporary Agency Workers Directive

The Services Directive 2006

The Data Protection Act 1998

Money-Laundering Legislation

The Employment Equality (Age) Regulations

CHANNELS TO MARKET

Recruitment Companies and Search Firms

Recruitment Agencies

Table 6: Channels Other than the Internet Used to Look for Jobs (%), 2008

Contacting Clients

The Growing Use of the Internet

Table 7: The Most Popular Job Websites for IT Professionals by Rank (% of IT users), 2008

The Emergence of Social Networking Sites

COMPETITIVE STRUCTURE

Table 8: The IT Recruitment Market by Estimated Share of Revenue (%), 2006 and 2007

Figure 2: The IT Recruitment Market by Estimated Share of Revenue (%), 2007

Table 9: The Major UK IT Recruitment Agencies by Estimated Market Share (% of total revenue), Year Ending 31st December 2007

THE CONSUMER

Business Customers

Individual Customers

Table 10: IT Jobseekers by Sex and Age (%), 2006 and 2007

MARKET FORECASTS

Table 11: The Forecast IT Recruitment Market by Invoiced Sales at Current Prices (£m), Years Ending December 2008-2012

3. Contract and Temporary Staff

BACKGROUND

MARKET SIZE

Table 12: The Contract and Temporary Staff Recruitment Market by Invoiced Sales at Current and Constant 2000 Prices (£m), Years Ending December 2003-2007

Figure 3: The Contract and Temporary Staff Recruitment Market by Invoiced Sales at Current and Constant 2000 Prices (£m), Years Ending December 2003-2007

CONSUMER TRENDS

Business Consumers

Changing Client Base

The Jobs in Demand

Table 13: Example Skills Requirements of Contract Jobs Advertised on Internet Jobsites (% of job advertisements), 3 Months to 16th April 2007 and 2008

Table 14: The Proportion of Contract Jobs Advertised on Internet Jobsites by Job Title (%), 3 Months to 1st December 2006 and 16th April 2008

Individual Consumers

ADVERTISING AND DISTRIBUTION

4. Permanent Staff

BACKGROUND

MARKET SIZE

Table 15: The Permanent Staff Recruitment Market by Invoiced Sales at Current and Constant 2000 Prices (£m), Years Ending December 2003-2007

Figure 4: The Permanent Staff Recruitment Market by Invoiced Sales at Current and Constant 2000 Prices (£m), Years Ending December 2003-2007

CONSUMER TRENDS

Business Consumers

The Jobs in Demand

Table 16: Example Skills Requirements of Permanent Jobs Advertised on Internet Jobsites (% of job advertisements), 3 Months to 16th April 2007 and 2008

Table 17: The Proportion of Permanent Jobs Advertised on Internet Jobsites by Job Title (%), 3 Months to 1st December 2006 and 16th April 2008

Individual Consumers

ADVERTISING AND DISTRIBUTION

5. An International Perspective

MARKET DEVELOPMENTS

Global IT Services Continue to Grow in Demand

Offshoring and the Global Division of Labour

Onshore-Offshoring Continues to Add to the Market Dynamics

The Services Directive 2006

COMPETITIVE ENVIRONMENT

CONSUMER BEHAVIOUR

6. PEST Analysis

POLITICAL FACTORS

Employment Laws

Skills Task Force

E-Government

Promotion of IT

Terrorism

ECONOMIC FACTORS

Economic Growth Impacts on IT Budgets

Different Sectors are More Vulnerable than Others

A Long-Term Influence

SOCIAL FACTORS

The Growth of Part-Time and Flexible Working

Teamworking

Changing Demographics

The Growing Importance of Women and Childcare Facilities

The `Sandwich' Generation

`Portfolio Careers'

Human-Resource Outsourcing

Business Environment Drives Demand

Businesses Lack Internal IT Skills

Exploiting Computer Resources is a Key to Business Success

TECHNOLOGICAL FACTORS

IT — A Competitive Weapon

Software Solutions

The Internet

A New Media Opportunity

A Potential New Media Threat

Changing How Agencies Operate

The Technology Cycle

The Technology Upgrade Cycle Influences Demand

New Technological Trends

Shifts in IT Budgets

E-Business — A Driver of Demand

7. Consumer Dynamics

EMPLOYERS

The 2008 Recruitment, Retention and Turnover Survey

Table 18: Methods Used to Attract Applicants by Industry Sector (% of respondents), 2005-2007

Table 19: Methods Used to Select Applicants (% of respondents), 2007

THE RECRUITMENT PROCESS

Recruitment Responsibilities

Vendor Management

Elastic Workforce

THE JOBS DEMANDED BY EMPLOYERS

Table 20: The Top 20 Geographical Locations of Contract IT Jobs Advertised on Internet Jobsites by Average Daily Rate and Average Hourly Rate (£), 3 Months to 1st May 2008

Table 21: The Top 20 Geographical Locations of Permanent IT Jobs Advertised on Internet Jobsites by Average Salary (£), 3 Months to 1st May 2008

Table 22: The Proportion of Jobs Advertised on Internet Jobsites by Job Title (%), 3 Months to 1st May 2008

IT WORKERS

Table 23: The Occupational and Vacancy Profile of Employment in the Computing and Related Industries (number and %), 2007

Table 24: The Profile of IT Jobseekers Using Recruitment Jobsites (% of visitors), 2008

IT Workers' Expectations

8. Company Profiles

AJILON (UK) LTD (COMPUTER PEOPLE)

Corporate Strategy

Strengths and Weaknesses

Brand Development

Profitability

Table 25: Financial Results for Ajilon (UK) Ltd (£000), 53 Weeks Ending 2nd January 2005 and Years Ending 31st December 2005 and 2006

Future Company Developments

ALEXANDER MANN GROUP LTD

Corporate Strategy

Strengths and Weaknesses

Profitability

Table 26: Financial Results for Alexander Mann Group Ltd (£000), Years Ending 30th September 2004-2006

Future Company Developments

ELAN IT

Corporate Strategy

Strengths and Weaknesses

Profitability

Table 27: Financial Results for Elan Computing Ltd (£000), Years Ending 31st December 2004-2006

Future Company Developments

HAYS INFORMATION TECHNOLOGY

Corporate Strategy

Strengths and Weaknesses

Brand Development

Profitability

Table 28: Financial Results for Hays PLC (£000), Years Ending 30th June 2005-2007

Future Company Developments

LORIEN RESOURCING

Corporate Strategy

Strengths and Weaknesses

Profitability

Table 29: Financial Results for Lorien Ltd (£000), Years Ending 28th November 2004, 27th November 2005 and 26th November 2006

Future Company Developments

MODIS INTERNATIONAL LTD

Corporate Strategy

Strengths and Weaknesses

New Business

Profitability

Table 30: Financial Results for Modis International Ltd (£000), 53 Weeks Ending 2nd January 2005 and Years Ending 1st January 2006 and 31st December 2006

Future Company Developments

SPRING TECHNOLOGY STAFFING SERVICES LTD

Corporate Strategy

Strengths and Weaknesses

New Business

Profitability

Table 31: Financial Results for Spring Technology Staffing Services Ltd (£000), Years Ending 31st December 2004-2006

Future Company Developments

STERIA RECRUITMENT LTD (XANSA RECRUITMENT LTD)

Corporate Strategy

Strengths and Weaknesses

New Business

Profitability

Table 32: Financial Results for Steria Recruitment Ltd (£000), Years Ending 30th April 2005-2007

Future Company Developments

STHREE PLC

Corporate Strategy

Strengths and Weaknesses

Profitability

Table 33: Financial Results for SThree PLC (£000), Years Ending 30th November 2005 and 2006 and 2nd December 2007

Future Company Developments

VEDIOR

Corporate Strategy

Strengths and Weaknesses

Profitability

Future Company Developments

OTHER COMPANIES

9. The Future

A POSITIVE OUTLOOK DESPITE CONCERNS OVER THE ECONOMIC ENVIRONMENT

KEY DRIVERS FOR FUTURE GROWTH

Ongoing Projects

The Strong Presence of IT-Intensive Industries in the UK

Outsourcing Human Resources

Demographics

Globalisation of the Industry

THE FUTURE DEMAND FOR IT WORKERS

Table 34: Employment Projections in the Computer-Services Industries (000), 2004, 2009 and 2014

Table 35: Projected Employment in the Computer-Services Industries by Occupational Group (000), 2004, 2009 and 2014

Employment by Status and Gender

Table 36: Forecast Employment in the Computer-Services Industry by Status and Sex (000 and %), 2004, 2009 and 2014

FUTURE RECRUITMENT PROBLEMS

FORECASTS 2008 TO 2012

Table 37: The Forecast IT Recruitment Market by Sector by Invoiced Sales at Current Prices (£m), Years Ending December 2008-2012

Figure 5: Growth in the IT Recruitment Market by Sector by Invoiced Sales at Current Prices (£m), Years Ending December 2003-2012

10. Glossary

11. Further Sources

Associations

Publications

Government Publications

Other Sources

Bisnode Sources

Abstract

During the past decade, the IT recruitment market has experienced peaks, troughs and eventual consolidation, from high demand in 1999, to turbulence between 2001 and 2003, to recovery in 2004 and controlled, steady, year-on-year increases in 2005, 2006 and 2007.

In 2004, the computer industry entered a new phase of growth, characterised by steady annual budget increases. Consequently, the period 2004 to 2006 was one of recovery for the IT recruitment industry. Since early 2004, there has been a significant improvement in the market for permanent, temporary and contract recruitment, spurred by new projects among companies to enhance their systems, both in terms of applications and infrastructure. As a result, there was an increase in demand for project managers from 2006 to 2008.

However, the IT skills shortage remained a problem for the UK market during this period of growth. Furthermore, demographic change has meant that agencies have had to build strategies for the recruitment of older workers and women, as well as to operate across international markets. This has opened up new service areas, such as international recruitment and employment consultancy, which job hunters are starting to consider to be standard offerings from recruitment agencies.

The diverse legislative environment continues to be tough for recruitment agencies. They need to be aware of issues related to employment and finance regulations in the UK, as well as international initiatives, including the EU's Agency Workers Directive.

Key Note forecasts that, despite concerns over the economic environment, between 2008 and 2012, the industry will continue to grow. Various factors contribute to this conclusion, including the financial sector requiring stability in their systems, the growing need for management of risk and compliance, and skills shortages that still need to be addressed.

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