Peoplebank executive skeptical about Gershon recruitment targets

Stan Beer
Tuesday, 25 November 2008 10:07

IT People - Enterprise

The chief operating officer of Australia's largest IT&T recruiter has joined a growing chorus of industry players who believe that Federal Government will not be able to achieve the massive cull of IT contract labour prescribed by the Gershon Review.

The Federal Government announced yesterday that it will implement all the recommendations of the review of Government ICT spending by Sir Peter Gershon, a former Chief Executive of the UK Treasury’s Office of Government Commerce. This includes plans to slash the number of IT&T contractors in Canberra by half and replace them with permanent staff over the next three years.

Peter Acheson, the COO of Peoplebank, Australia's largest IT&T recruitment company, has expressed serious doubts about the feasability of replacing large numbers of contractors in Canberra with permanent staff. Peoplebank generates 85% of its revenues through contracting, with the government sector providing its largest customer base.

As far the Federal Government's recruitment targets were concerned, Mr Acheson indicated he believes that the Government may have bitten off more than it can chew.

"I think it will be very tough for them to achieve (the targets) to be honest," said Mr Acheson.

"Particularly if we end up in a market with very strong demand.

"Trying to go from contract to permanent will be challenging and obviously that's why they've given it a three-year time frame," said Mr Acheson.

"I think it will end up being done very much on a Federal Government department by department basis.

"They will now go back to each of the major Federal Government departments and say 'here are the targets we want you to achieve over the next three years'.

"That's when it will really be very tough - trying to determine how they will achieve those targets."

Of course Sir Peter Gershon is not the first so-called "expert" from overseas hired by a Federal Government in recent years in an effort save bucket loads of money on IT spending.

Many may remember Canadian import Dr Andy McDonald, Australia's former Chief Government Information Officer.

Dr McDonald, armed with impressive credentials for his work with the Canadian Government, was brought to Australia in 1995 by the Keating Government and continued under the first Howard administration to form a strategic whole of government IT outsourcing initiative projected to save the Government $1 billion. The initiative turned into a fiasco that ended up costing the Government millions let alone saving anything.

Is there a danger in attempting to transpose the UK Government experiences of Sir Peter Gershon onto an Australian IT recruitment canvas? After all, London is a very different place to Canberra.

"Those are very fair comments. We were asked to submit to the Gershon Review," said Mr Acheson.

"There are some things in the report that make a lot of sense. For example, centralised procurement of certain things like Microsoft licenses or particular hardware makes a lot of sense and you would have to say why hasn't that been done before. Also centralising data centres makes a lot of sense. Those things make sense even in the Australian context.

"But I think it will be challenging trying to go from contracting to permanent."

While Mr Acheson didn't comment on it, the Rudd Government's Gershon Review and the first Howard Government's Whole-of-Government IT Outsourcing Initiative 12 years ago have some eery parallels.

The Outsourcing initiative involved a high degree of centralisation of processes, it laid claim to savings of 15% of Government IT spend and it caused a lot of angst among local IT&T suppliers. For some, the question is likely to be will this time be different.