Survey Methodology

The inside ICT Survey was completed over the course of March and April 2009 in both Wellington and Auckland regions. A total of 451 distinct organizations were polled across both locations. The survey was conducted across technology businesses; software product organizations, custom development shops, consultancies and resellers targeting Senior Management including CEOs, GMs, MDs, business unit and line managers. Of those that took part, around 10% were large corporate IT departments who provide a service back to the business and are treated as a profit center.

In order to avoid a ‘one culture’ response, less than 10% of participants have a reasonable office presence in both cities. In addition, whilst the businesses we spoke to varied from technology giants to nimble start-ups, we wished to avoid cottage industry impact and restricted our survey results to include only those with a minimum of 5 IT staff members.

National Similarities:

In many respects when both locations were tallied and compared, the results were remarkably close. It would seem that for the most part Wellington and Auckland share a technology industry psyche. Shared expectations for business strategy were evident; only 1% separated the percentages of those anticipating expansion within the two cities with a difference of only 2% anticipating growth in revenue. 59% and 57% of companies are currently hiring in Wellington and Auckland respectively.

National Differences:

Of the differences, perhaps the most telling statistic is that more organizations in Auckland are solely focused on survival (8% in Auckland vs 3% in Wellington); more technology businesses seem to be struggling in the nation’s commercial center. Further corroborating this theory is the fact that Auckland has experienced 20% more redundancies than Wellington has to date, with Wellington also expecting salary levels to hold up better in the year ahead. Although marginal, morale is posted as being slightly higher in Wellington; 50% more of Wellington’s organizations rated morale at 5/5. Somewhat ironically however, 20% more businesses in Wellington foresee a drop in revenue for the year.

Rationale and Potential Conclusions:

First, we may look for differences in the profile of businesses in Wellington and Auckland. As briefly outlined above, while we endeavoured to ensure a cross-section of companies, the reality is that Wellington is a smaller market largely bolstered by central government spend and slightly less proliferated by entrepreneurial start-ups. One could potentially argue that a more pervasive sense of conservatism exists in the Wellington market by virtue of this fact (longer, more expensive and complex projects typically means larger – often multinational businesses delivering to these projects). If we are to agree on this point, the increased percentage of those anticipating a decrease in revenue in Wellington could be in part due to the new government’s stated intention to decrease spending over the upcoming years.

On the other hand, if the Auckland market has an increased number of entrepreneurial endeavours, one could argue that ‘entrepreneurial spirit’ permeates Auckland business to a greater degree, that is, less of an aversion to risk and perhaps a greater optimism around delivery with smaller teams. This would also lead to an explanation around the greater numbers of redundancies in Auckland.

From our records, Auckland is experiencing a proportionately greater increase of job applicants which goes some way towards explaining the belief that salary levels are expected to hold up better in Wellington. The larger numbers of redundancies in Auckland are supported by the basic economics; a greater supply with consistent or dropping demand = a lower price.

To date, the recession may have had a greater impact in Auckland as demonstrated by the Household Labour Force Survey. Amongst the indicators, perhaps the most telling is a decline in those employed in Auckland (between March 2008 and March 2009) of 31,200. However on a National level, the employment situation has improved by 47,800 jobs over the past year.

Why then, if these numbers stack up in Wellington’s favour, is there so little difference in the expected revenues for the year ahead? Any further ruminations on this would be conjecture at this point, but perhaps the answer lies in some inherent differences in our respective city cultures. We will know more in 5 months or so when we repeat this exercise and report on numbers at that stage and check whether those future predictions eventuated.