Candle ICT New South Wales general manager Peter Zonnevylle believes the bad press that IT has had following the dot-com collapse has caused the large decrease in graduates.
"A lot of people jumped in to study IT when it was booming but by the time they finished their degrees we were in a slump. Now that we need the people again, they aren't there. I think we're going to feel that pain for a while and I think flexibility is required," he said
Zonnevylle urged caution for those looking abroad to fill the gaps.
"While we need to be flexible enough to bring in some professionals with certain skill sets to fill niche areas of demand, we need to be careful about it. Ideally we should be looking at transferring these skills to local people. A more innovative and sustainable approach is needed."
Companies need also to be more flexible in the way they recruit graduates and recognize that many degrees now include IT components, Zonnevylle said.
"I think we're seeing that IT isn't something you necessarily study as a career anymore. It is a tool, something that you use to do business. So I think companies should be more flexible in looking at good graduates from Maths or Physics, and then be prepared to offer intensive training in specific IT skills," he said.
"If companies insist on having only graduates with straight technology degrees, they will face a shortage."
Zonnevylle said that 2006 seems to be picking up already from the seasonal holiday slump.
"We're certainly seeing the demand from the Telco side, with the work that Telstra, Hutchison, Vodafone, and Optus are all carrying out on 3G networks, and in the VOIP space," he said.
"We're also seeing demand from the second tier of professional services, as Telstra has outsourced a lot of that type of work now. So we're seeing a lot of work coming through from the likes of Alcatel and Cisco."
J2EE and .NET skills will continue to be in demand in the applications space and as many companies make upgrades, integrate projects and make new systems go live this year, test engineers will have no trouble finding work. Business analysts, compliance and security professionals will also be highly sought after, he said.
"Skills in emerging technologies will quite likely be required later in the year, and when Windows Vista comes out there will be demand for the relevant skills to support it," he said.
Zonnevylle predicts that companies will be increasingly converting a lot of their contract roles into permanent positions for day-to-day operational jobs.
"On the flip side of that, we believe that companies will lean more heavily on contractors for the short term and specialized skills," he said.
The demand for IT professionals this year will not just be at the technical level.
"There has been a fairly steady demand at the senior end of the market which will possibly grow as the market heats up, but companies will have to dangle fairly big carrots to get the big name CIOs to move around," he said.
The Olivier Internet Job Index also paints a pretty picture for the IT job market, with IT outperforming other industries in growth by nearly eight per cent in 2005.
Group Director Robert Olivier is optimistic that the amount of IT jobs advertised will continue its steady growth this year even though there has been a seasonal slump.
"This silly season goes away. The employment market overall is bumping along the top right now. IT is not yet bumping along the top but I think that it will get there," he said.
In the last three months the number of IT jobs advertised rose six per cent when the rest of the market rose by only one per cent on average.
"I think the year is going to be a good one for the IT sector. We said that last year and we were right, and we say it again this year," he said.
"Despite all the talk about offshoring, the demand for skills here continues to grow."
The Olivier Job Index shows the demand for graduates in December 2005 to be over twice what it was in December 2004.
"That is also a very good indication of where employers are heading," he said.
"So the demand is there but the supply is lacking. I think there are some real structural problems that the government will have to face."