blog Over at the blog of Queensland-based ICT analyst house Longhaus, the firm’s managing director Peter Carr has published some ruminations about the tough future facing many of the state’s ICT contractors as the new LNP State Government puts technology squarely in the layoff firing line. Carr writes:

“Over the coming days, weeks and months there are a number of ICT contractors that will not have their contracts renewed in Queensland departments as the new government spearheads a path towards outcome-based consulting. The numbers of contractor layoffs could stretch into the tousands with the majority of those likely to come from Health, and Transport where each of these have accumulated over 600 of this style of contingent resources between them.”

According to Carr, the layoffs could create what he describes as a lot of uncertainty in the state’s technology sector about the short to medium term future of contracting and consulting in the state in general — issues that could be exacerbated by the delay of the State Budget to September. The net effect could be that some really big changes could be on the way:

” … it is likely that times will be increasingly difficult up to 2013 for those that have been largely dependent on state government funding. It won’t just be the small players this time. It may even be possible that one of the big four will retreat operations back to Sydney for the foreseeable future (years). Quite astonishing.”

I’m not quite sure who Carr is referring to when he says “the big four”, but I’m betting if we’re talking IT services then it would be IBM and HP (EDS) at least, as well as likely Fujitsu and CSC. Data#3 also has a very strong presence in Queensland, and also Dimension Data is pretty big these days, but they’re probably not in the top four in this area.

Update: Carr has since clarified that he was referring to Deloitte, Accenture, KPMG and PWC in his article.

We’ve seen similar issues in the past in the Federal Government following the Gershon review, when Delimiter received a flood of complaints from ICT contractors forced out as part of the review’s in-sourcing recommendations, and there’s also a similar contractor massacre currently under way in Victoria — particularly associated with IT shared services group CenITex, which is, to put it bluntly, not doing that well at the moment.

Personally, I don’t think the issue is that big a deal. If you have the ICT skills to be a contractor to government, you’re likely to be able to find a pretty decently replacement gig at need; certainly all of the big IT services companies in Australia are always on the lookout for experience and talent, and there’s also a lot of decent positions always opening up inside end user IT departments (especially in the financial services sector, for example). Plus, contracting is a business, and as someone who runs a small business myself, there are always obvious risks (and rewards) accruing from such an endeavour.

However, I’m also not looking at my final fortnightly payment cheque, as many ICT contractors will shortly be in Queensland. And it’s not hard to understand that some of these contractors will feel a little hard done by with the massive instability unleashed following Queensland’s last election. Anyone in a similar position would feel the same.

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1. Its good to be out
   Posted 10/07/2012 at 9:51 pm | Permalink | Reply

   We all watch with interest as friends, colleagues and foes alike wait for their fate. It will be very interesting to watch Queensland Health in particular, where the % contractor ratio is higher than stated by Carr in his blog. Those that stay will have had to have had their positions, value and importance argued for. That is one way to think about – another way to think about it is who will the respective agency CIOs save? What mates and advisors will be given life lines.

   There is a whole network of contractor relationships in Queensland that go directly to the CIO office of every agency. These self serving mates networks are a key reason for the systematic failure of ICT in Queensland Government during the last decade. We watch and wait to see who stays and why. This will abe an equally important story.

2. FlopFlip
   Posted 11/07/2012 at 2:42 pm | Permalink | Reply

   The problem with finding another gig in today’s environment is that all government departments everywhere are letting staff go pretty much simultaneously. Last time this happened a generation of IT staff were left unemployed and many moved into other fields.

   It also has a detrimental further down the road in the form of uni graduates. Few students out of high school will want to get into a career where the words layoff and massacre are used regularly.

3. Stephen
   Posted 16/07/2012 at 3:47 pm | Permalink | Reply

   Good the QLD was over paying IT workers double what they should be paid. I run a IT company was about to hire a server admin guy for $65k he was not that well educated but did the things I needed and I would help train him with my more experienced admin/coders. What happens the next week? The QLD Police department offers him a starting wage of $120,000 and he is a junior coder/admin. No pity for government workers being over paid for years. Get back to living on normal rates in the private sector of what people are really worth.

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