NZ computer system design firms struggling to find worker, ICT sector report finds

Tuesday 16th July 2013

New Zealand computer system design companies pay more than twice the average wage and have recorded faster growth in pay that the rest of the economy, yet increasingly they're reporting severe difficulties attracting workers.

That's one of the findings of the government's information and communications technology sector report, released today.

The percentage of computer system design firms reporting that it was 'severely difficult' to attract managers and professionals jumped to 20 percent last year from 12 percent in 2011. Those saying it was moderately difficult were at 29 percent. That compares with the New Zealand average of just 6 percent saying it is severely difficult to find workers and 14 percent saying it is moderately difficult.

"The best guesstimate is that we will need twice as many people working in the technology industry - broadly defined - as we have today," the report quotes an unnamed industry executive as saying. "The biggest bottleneck is the scarcity of people."

"These are not just IT occupations but a whole range of skills such as project managers, marketers, sales people, administrators and business analysts," the executive says. "These people don't all need a degree in computer science."

Salary growth in the sector was 5.9 percent in 2010 and 4.5 percent in 2011, outpacing growth of 3.6 percent and 3.2 percent respectively in the broader economy, while the average salary of $103,563 in 2011 was more than twice the average wage of $50,351, the report says.

Communications and Information Technology Minister Amy Adams said a big issue for the industry was attracting enough graduates.

"Latest figures from the TEC (Tertiary Education Commission) show that the number of EFTS (equivalent full-time student) places at degree level in New Zealand has grown by 22 percent over the last two years, and the number of degree graduates with IT specialties is predicted to increase from 1,200 in 2011 to between 1,600 and 1,900 annually by 2014," she said. "That sort of growth will need to continue in the years ahead."

The nation's ICT sector generated $8.4 billion, or 5.1 percent of nominal gross domestic product in 2010 terms, exported $745 million of goods in 2012 and employed 73,398 people in 2011, the report shows. There were 14,187 firms last year, while in 2011 total income per firm was $1.9 million and total income per employee was $453,027.

Software and services start-ups are attracting the biggest share of the early stage investment pie, based on the value and volume of deals, the report says, citing 2012 figures. Software and services attracted 27 percent of total investment by value and 41 percent of total deals last year. That put it out front of pharmaceuticals, biotechnology and life sciences at 23 percent and 14 percent respectively.

By contrast, media attracted just 1 percent of deals by value and volume.

BusinessDesk.co.nz

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