Barriers are Falling in IT Recruitment War

Smaller remuneration packages have hindered the movement of IT professionals to Australia and the Asia region, a situation that is gradually being addressed
The Financial Times, December 6, 2000

Stuart Holdsworth, a British-born financial services IT expert, was working in London for Price Waterhouse when he realised “there was more to life than work.” Despite the healthy pay, Mr Holdsworth, then 22 and a keen yachtsman, did not fancy a lifetime in grey London.

“I bought a one-way ticket to Sydney and have been here 10 years now,” he says from his flat on Sydney’s sunny northern beaches. Today, he jets between Sydney and Asian capitals for Open Market, the US-based internet applications software vendor.

He estimates the money is only a third of what he could earn in Europe or America. But Mr Holdsworth prefers life in the Asia Pacific region, because it is not the “dogfight” working in Europe has become.

Mr Holdsworth - highly skilled, European educated, young and mobile - is a dream migrant of whom companies in the Asia Pacific region would like to see many more. It is estimated that in two years the US will lack 25 per cent of the IT staff it will need; in Hong Kong alone, that figure is likely to be closer to 40 per cent.

Australia has led the IT charge in the region, but tiger economies are now entering the dotcom start-up frenzy, while regional corporations are clamouring to keep up with new technologies. In the global scramble to secure IT staff, the US has the R&D might of Silicon Valley; while Europe also has the sweeteners of cutting-edge technology and big dollars.

But how is the Asia Pacific region managing its critical IT shortage? Who is in demand where - and what are the various attractions of different countries?

“Anyone with internet or e-commerce skills is in demand, across all industries in Asia,” says Ellyda Stone, technology consultant with Michael Page in Hong Kong. The most wanted skills echo global trends, including top executives - particularly directors of e-commerce-and analysts and systems designers with web-programming and telephony skills. In Australia, a Michael Page survey found that skills shortages have pushed up internet-related salaries by 40 per cent in the past year, compared with 18 per cent for average IT wages.

Michael Piker, a manager with the networking giant Cisco in Singapore, says mobile digital technology is the key to the IT revolution. “Cisco, Lucent, Siemens, Nortel: all the big networking companies want to grab this knowledge, but it’s difficult to find people with 8-10 years’ working experience.”

In the past year, Cisco has purchased at least 48 small businesses worldwide - more in an effort to acquire the skills of the staff than the business. But Mr Piker says attracting staff with such in-demand skills to the Asia Pacific region - and keeping them there - is even more difficult; a fact which is gradually driving up salaries in the region.

Today, Wireless application protocol (Wap) systems designers with about five years’ experience are commanding USDollars 200,000 or more in Hong Kong.

In the fight to recruit, traditional barriers are tumbling. “Nationality doesn’t matter; employers want anyone who’s good,” says David Crawford, a Sydney-based director with PriceWaterhouseCoopers.

But whether those who are good want the Asia Pacific is another matter. Asian-based companies recruit graduates on-campus in the US and across Europe; but Elaine Ng, head of human resources consulting for greater China with William M Mercer, says often they can lure only second-rate graduates. This is frustrating to employers, who want to be as choosey as their northern hemisphere colleagues. “We don’t want anybody,” says Mr Crawford. “We want professionals who are technically brilliant, but consumer-focused.”

Employers around the region are finding it easier to concentrate on homegrown talent. “It’s easier to attract top Asian students by offering them a higher standard of living than their place of birth, but within a culture they know,” says Ms Ng. Recruitment agents agree that personnel from Australia, India, the Philippines and China are the most likely to be on the move within the region.

In such a competitive field, how do countries attract the best people? At present, Hong Kong, Singapore and Australia (Sydney in particular) are the clear winners, because they are the top regional headquarters locations. However, Japan, China and India are exceptions, as they have huge populations, vast pools of talent, and prefer to employ from within.

Korea and Taiwan also do well, but are more focused on IT manufacturing and production. The other two big regional players, Thailand and Indonesia, are viewed by many to be in trouble: they have low quality of life and no cutting-edge technology; while Indonesia is politically volatile.

In Singapore and Hong Kong, governments and private enterprise are pooling resources to emphasise commitment: Singapore has a Technology Park while Hong Kong business tycoon Richard Li is pouring billions into a Cyber-Port, to be completed in two years.

In the region, Hong Kong wins on the critical measure of tax, with a flat rate of 15 per cent. Singapore is also attractive, with a graded tax rate peaking at 32 per cent. Both nations are striving to overcome high property rental rates by offering paid-accommodation packages.

Australia’s fierce tax rates - with the top personal tax bracket paying 47 per cent - not to mention the recent introduction of a 10 per cent general sales tax, stand as a huge disincentive to working there. But the country wins hands down in the region for lifestyle, low cost of living, less pollution, and reliable public health and education systems. “Australia will always attract the best people from overseas because, at the end of the day, lifestyle is the number one reason a European would make the transition,” says Mr Holdsworth.

Australia also appears to be winning on the difficult issue of visas and residency. In Australia, no formal qualifications are needed to win residency, if relevant experience can be proved. Australia also completes urgent visa cases in a week; compared with Hong Kong, Singapore, Malaysia and Singapore, which take about eight weeks to issue visas. Another disadvantage for Hong Kong and Singapore is that companies tend to offer less contract work.

Government commitment to streamlining migration and funding IT research is critical. But increasingly, the pressure is on employers to attract staff. Japan, Hong Kong and Singapore generally offer the largest salaries, followed by Australia, Korea and Taiwan. However, salaries in the region are often comparable, once the varying costs of living are included.

More than attractively-weighted salary packages, IT staff want strong exposure to leading technology and a flexible, open working environment. Ms Ng says many leading companies in the region now push themselves as truly global: offering Asian-based employees a full menu of European or American secondment choices in order to keep them in the region - and satisfy their desire to work in the two IT powerhouse continents, even if only for a couple of years.

After ten years, Mr Holdsworth says lower pay, plus the smaller pool of top jobs in Australia, has now become an issue. But, with dual residency for Australia and the UK, it would appear he is the ultimate winner. “I’m not locked in anywhere, I can go between the lifestyle here and the money in Europe. I moved here to establish that sort of freedom.”

No doubt Asia Pacific employers wish there were more like him.