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Australia – ICT contract and recruitment sector slows down

16 April 2013

The ICT contract and recruitment sector is continuing to slow down, according to the latest research by the association for ICT contract and recruitment companies in Australia and New Zealand, ITCRA.

This is according to the new Recruitment Industry Benchmarking (RIB) report. It gathered responses from ITCRA members and provides a snapshot of companies’ monthly and quarterly results which reveals how firms are performing against the RIB industry average.

CEO of ITCRA, Julie Mills, and Nigel Harse of the RIB report say that the ICT contract and recruitment sector is continuing to soften but not at the same trajectory as the market generally.

The February results provide some positive indicators as the results look slightly brighter with transaction volumes for both temporary/contractors and permanent placements improving. 43% of RIB participants reported improvements on the dismal profit results of January.

Nigel Harse said “that this result is coming off a 4- year low and the number of participants trading at a loss for the month still remains high at 39%, but any improvement on the January results should be cause for at least a smile.”

Julie Mills added that “ICT recruiters cannot be complacent as the results indicate the sector has also felt pain with profit before tax as a % of sales falling from 3.5% last year to 3.2% so far this year. Profitability for many in the industry generally is starting to look a little concerning as the year to date decline has been significant with the RIB Average falling from 5.3% last year to 3.3% year to date.”

Gross profit (NDR) per person in the ICT sector is softening along similar lines to the industry generally with the ICT sector having fallen from AUD 151,000 last year to AUD 132,600 this year. The report said that falling volumes and high staff turnover throughout the year are making their damaging mark on productivity.

Global economic conditions and sluggish domestic employer confidence have impacted poor results for permanent placements. Year to date, the RIB average has plummeted 26% on last year falling from 104 to 77 placements per participant, however the ICT sector results, while generally lower, have been more resilient, falling just 5% on last year. 

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