Griffin on Tech: IT hiring has “fizzled” but there’s still opportunity in tech
It used to be that the safe place to be in a tech role was in a bank.
Many a Kiwi IT worker got their start at one of the big banks or have done a stint at one of them in the course of their career. But even the vastly profitable banks are casting their eye over the IT department as they attempt to trim costs.
NBR reported this week that ANZ has recently shed around 100 skilled IT workers in New Zealand as it moves more roles to India in an offshoring push. You may not realise that ANZ employs 8,000 people in massive campuses in Bangalore, nearly 20% of the company’s total workforce. It’s not low-level back office work heading to India either.
As the Australian Financial Review reported, “these data scientists, software engineers and artificial intelligence specialists are creating new processes and technology for ANZ. Some are monitoring payments systems back in Australia.”
We can expect an acceleration in offshoring by the other banks too as they similarly seek cost savings and to tap into India’s considerable talent pool. It’s not great news for local tech workers clinging on for dear life in a shrinking job market, particularly those in the public sector.
As IT recruitment company Sourced put it in its April 26 update, “over the past 6 months, hiring activity, particularly on the permanent front, has well and truly fizzled”. Nowhere is particularly safe at the moment for tech workers.
“Despite budgets now being in place for the new financial year, lower levels of business confidence, and a sluggish economy have seen these budgets shrink for FY24, reducing headcount vacancies for the year ahead, and becoming more reliant on permanent and fixed-term options,” Sourced added.
Those in secure tech jobs are hunkering down to ride out the gloom. Tech workers that arrived from overseas in recent months expecting a warm embrace from employers are struggling to find work. Some of them are choosing to head home, according to Sourced.
Employers now have the power
“There is a heightened sense of a power shift from candidate to employer, and where candidates are opting to leave, often they are not being counter-offered, and occasionally not replaced, with employers taking the opportunity to reorganise their teams and redeploy vacancies to other areas,” Sourced points out.
The saving grace is that hourly or annual salary rates haven’t softened significantly. Specialist skills are still in high demand. Our startup community appears to be thriving, so it could be a good opportunity for those restructured out of roles to take on a fresh challenge trying to do something innovative.
It will probably require a sacrifice in pay and startups are hard work, but you can look no further than Alex Kendall for inspiration. The former University of Auckland mechatronics and robotics graduate just raised US$1.05 billion for his UK-based autonomous driving startup Wayve. Yes, that’s billion. The injection of cash from Softbank and other backers gives Kendall a shot at becoming the AI-powered self driving car tech chosen by car brands other than Tesla which is well down the track with its own self-driving technology.
Self-driving is a technology plagued with false starts, hype, and regulatory challenges. But as we end another week of mounting job losses and grim economic indicators, we can cheer on a Kiwi entrepreneur with big tech ambitions and now, a big war chest to go with them.
All the tech investors tell us a recession is the best time to start a company. It instils a certain fiscal discipline, and a focus on delivery and creating a compelling value proposition. Even if you aren’t up for delving into tech entrepreneurship, now’s a good time to think to the future, to the growth times that will no doubt come, and the tech skills, AI or otherwise, that will help you make the most of them.
Photo credit: Marvin Meyer/Unsplash
