KEY POINTS:
Chris Quin, general manager of Telecom's IT business services division, Gen-i, has helped generate some reasonable publicity over the past week talking up the skills shortage plaguing New Zealand's information and communications technology (ICT) sector.
Quin's message - that economic growth is being hampered by our inability to encourage more young people into IT careers - is not new. Neither is his call for a more industry-wide approach to try and somehow solve the problem by making the sector more attractive to job-seekers.
It's interesting, however, that Quin is muscling into the debate. There is certainly a degree of self-interest. With 1600 staff across New Zealand, Gen-i is amongst the throngs of businesses feeling the effect of today's record low unemployment environment.
Parent company Telecom's quarterly result released earlier this month, tells the story: the group's wage bill for the three months was up $8 million on the same period last year.
The telco's staff numbers swelled 5 per cent to 6600 but labour costs jumped 6.2 per cent reflecting, as the report put it: "Salary pressure incurred in a tight labour market."
Part of the problem for the ICT industry is that it is dealing with recruitment speed wobbles as a result of strong growth. Gen-i's revenue was up 12.9 per cent year-on-year last quarter.
The business sector as a whole is spending up large on IT. Perhaps ironically, a major driver for new IT investment is to boost the productivity of overworked staff whose bosses can't recruit fast enough.
"The IT industry is interesting," Quin says, "because in hard times people look to technology to take costs out and make their businesses sustainable and in good time they look to technology to help them expand into new markets and handle more customers quicker. So I don't know that there really is a downturn. It certainly hasn't felt like it in the four years since we [Telecom] bought Gen-i and Computerland [another services business it absorbed]."
Quin's colleague, Rhoda Holmes, who heads up Gen-i Australasia, says New Zealand needs to brace itself to cope with the local onset of some even tighter employment problems being experienced in Australia.
"I think what we're seeing in New Zealand with the ICT skills shortage is running just behind a trend that's been quite powerful in Australia for some time now," Holmes says.
"There's almost 100 per cent employment of core IT skills in the Australian market which means that every time you try and get capability in that market you are competing with some big salaries. We've seen a 30 per cent increase in the kind of salaries that people can command for the same jobs over the past 12 to 18 months. New Zealand is not going to be far behind."
Quin says another factor that will add to the ICT skills issue in New Zealand is the looming operational separation of Telecom, which will see the business split into walled-off network, wholesale and retail silos.
"Operational separation does create even more demand into the New Zealand IT skills market because the work that Telecom is required to undertake to get there will require those skills," he says.
This isn't a swipe at the Government's enforced separation regime. Like his boss, new Telecom chief executive Paul Reynolds, Quin is upbeat about the new operating environment.
He says separation will have little impact on Gen-i because the business is already run as a stand-alone unit.
Separation does not apply in Australia, where Holmes will be able to continue the "hand-and-glove" relationship she has with another Telecom business, AAPT.
"I think what you'll find in New Zealand [under operational separation] is that our business model will look much more similar to something we're much more comfortable doing in Australia at the moment," she says.
"In servicing the Commonwealth Bank [Telecom's largest customer] we've partnered with Vodafone on providing their Blackberry services. We use Telstra infrastructure to run some of our ADSL [broadband] services. We use Optus wholesale services.
"So there is much more collaboration around what the client wants as an end solution. And you'll probably see many more of those partnerships happen in the New Zealand market."
