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All Talent Development Centre posts for Canadian technology contractors relating to the economy.

IT Industry News for December 2016

Kevin Dee By Kevin Dee,
Chairman of the Board at Eagle

This post first appeared on The Eagle Blog on January 6th, 2017

Tech News HeaderThis is my 30,000 foot look at events in the ICT industry for December 2016. What you see here is a précis of the monthly report I produce, which will be available in more detail at the News section of the Eagle website, where you will also find back issues.

A Little History of previous year’s Decembers …

Five years ago, in December 2011 Ottawa’s March Networks was snapped up by Infinova Canada for $90 million, and Toronto based Rypple was acquired by Salesforce.com!  The BIG deal was SAP’s $3.4 billion purchase of SuccessFactors, who had also announced they were buying Jobs2Web for $110 milion.  It was IBM that was the most active acquirer of the month, paying $440 million for DemandTec, also picking up Emptoris in the procurement world and Irish company Curam Software in the government sector. Oracle logo a large software company originally noted for its databaseFour years ago, in December 2012 there was a fair amount of M&A activity with Oracle making two acquisitions, marketing automation company Eloqua ($871 million) and Dataraker which provides analytics for utilities companies.  The big deal of the month saw Sprint pay $2.2 Billion to take full control of cellular competitor Clearwire.   Montreal based Cogeco paid $635 million for Peer 1 Networks and NCR paid $635 million for retail software and services company Retalix.  In the BYOD space Citrix bought mobile device management company Zenprise for $355 million.  Finally, Redknee added 1200 employees and 130 new clients through the purchase of Nokia Siemens Business Support Network. December 2013 was a slow month, however Oracle pulled off a $1.5 billion buy of marketing software company Responsys; Akamai paid $370 million for cloud-based IBM logosecurity solutions provider Prolexic; JDS Uniphase paid $200 million for enterprise performance management company Network Instruments; IBM bought a “big data” file compression company Aspera and Hitachi expended its solutions capability with the purchase of Calgary based Ideaca.  In other company news Target, although not an IT company, had a major security breach involving details of 40 million debit and credit cards.  December 2014 was not such a slow news month, with the political and technical ramifications of “the Sony hack” causing uproar, some very positive economic indicators out of the US and some big names making acquisitions, albeit not huge deals.  Microsoft made two Microsoft logoacquisitions, the $200 million purchase of mobile email app startup Acompli and mobile development company HockeyApp (which has nothing to do with hockey).  SAP bought travel and expense management company Concur; Intel bought a Montreal based identity management company PasswordBox; Oracle bought digital marketing company Datalogix; Teradata bought data archiving company Rainstor; and MongoDB bought high-scale storage engine company WiredTiger. December 2015 was not a busy M&A month but there was some interesting activity.  The big deal saw Canadian telco Shaw make a big play into the cellular space with its proposed acquisition of Wind for $1.6 billion.  Meanwhile Rogers was also out shopping and growing its Maritimes presence through the acquisition of Internetworking Atlantic Inc.  Other deals in December were not large but did feature some of the big players.  Oracle bought Stackhouse a cloud company with a specialization in “containers”; IBM boosted its video in the cloud capabilities with the purchase of Clearleap; and Microsoft picked up a mobile communications company, Talko.  Other deals saw Ingram Micro buy the Odin Service Automation business from Parallels and in the storage world Carbonite bought Evault from Seagate.

Which brings us back to the present …

December 2016 saw Adecco sell its majority stake in Beeline VMS to GTRC, a private equity firm, for $100 million in cash plus a $30 million note; CRN solution provider SS&C purchased asset service firm Conifer for $88.5 million; solution provider QRX Technology Group acquired IT equipment provider Kerr Norton at the beginning of the month; networking solution provider, Juniper Networks acquired cloud operations management provider AppFormix; Uber bought start-up Geometric Intelligence Inc.; and Shopify acquired Tiny Hearts, a Toronto-based mobile product development studio.

In other news, Yahoo disclosed that one billion accounts were hacked in 2013 making it Yahoo logothe largest data breach recorded in history. To safeguard against hacking attempts on your devices, Check Point Software advises users to make sure they download the latest versions of software as they have discovered new malware that targets devices running outdated software. Cyber attacks and security breaches are also a major concern for IT and business professionals where, according to Symantec, 30% of business surveyed have experienced a hack over the last two years.   GoPro also announced layoffs of up to 15% of its workforce and Amazon delivered its first package by drone!

That’s my look at the tech news for December 2016.  Until next month, walk fast and smile!

IT Industry News for November 2016

Kevin Dee By Kevin Dee,
Chairman of the Board at Eagle

This post first appeared on The Eagle Blog on December 7th, 2016

A Little History of previous year’s Novembers

Tech News HeaderThis is my 30,000 foot look at events in the ICT industry for November 2016. What you see here is a précis of the monthly report I produce, which will be available in more detail at the News section of the Eagle website, where you will also find back issues.

Five years ago, in November 2011, Mosaid was sold to Sterling Partners for $590 million, ending a WiLan hostile takeover attempt. Japanese company Rakuten paid $315 million for e-book company Kobo; Huawei technologies bought Symantec out of a storage and security joint venture to the tune of $530 million; Yahoo paid $270 million for online advertising company Interclick; and Best Buy paid $167 million for internet technology company Mindshift. In November 2012, Cisco made two significant “buys”: cloud infrastructure company Meraki ($1.2B) and cloud datacentre and software company Cloupia ($125M); Dell bought software tools company Gale Technologies; NCR bought retail software company Retalix ($650M); Cray bought software company Appro ($25M); Sprint Nextel bought a chunk of US Cellular ($480M); and Toronto-based NexJ bought Broadstreet for $8.2 million.  Three years ago, in November 2013, Opentext paid $1.1 billion for cloud-based integration services company GXS Group and another Canadian deal saw Mitel buy Aastra for close to $400 million. Other deals included eBay’s $800 million purchase of global payments company Braintree; Apple’s $370 million purchase of 3D sensor company PrimeSense; and Akamai’s purchase of Velocius Networks. November 2014 was an exceptionally quiet month on the M&A front with the largest deal being the merger of two semiconductor companies, Cypress Semiconductor and Spansion, to form a $4 billion company; private equity company Carlyle Group paid $700 million for investment bank technology company Dealogic and Yahoo shelled out $640 million for video advertising company BrightRoll. Last year, November 2015 saw a number of smaller M&A deals, but not much in the way of mega-deals. The only billion-dollar deal saw Expedia pay $3.9 billion for HomeAway as a vehicle to better compete with Airbnb. Zayo Holding Group became the first foreign company to own a Canadian telco after paying $465 million for Allstream. Other, smaller deals saw Apple buy Faceshift, a motion capture company whose technology was used in the latest Star Wars movie; and Lightspeed POS bought SEOshop, increasing its size as a competitor to Shopify. Other deals saw Ingram Micro grow its Brazilian presence with the purchase of ACAO; PCM bought Edmonton-based services firm Acrodex; data centre company CentriLogic bought infrastructure company Advanced Knowledge Networks; solution provider Scalar Systems bought another Toronto company, professional services firm Eosensa; and Washington-based New Signature bought Toronto-based Microsoft Partner, Imason.

Which brings us back to the present

November 2016 saw some M&A activity, although it was not too busy. The big deal of the month saw Broadcom acquire Brocade Communication Systems in an all-cash transaction of $5.9 billion; Adobe purchased multi-channel programmatic video platform TubeMogul for $540 million; IT services and outsourcing provider Wipro Limited will acquire IT cloud consulting firm Appirio for $500 million; Oracle Corp. has announced its plans to acquire DNS solution provider, Dyn Inc.; SoftwareOne acquired and integrated House of Lync; and Avnet completed an acquisition of Hackster.  In other news, hackers caused some problems for Casino Rama Resort, claiming to have both employee and client information going back a number of years; also AdultFriendFinder exposed 340 million users’ information. A Harvey Nash Technology Survey suggests 94% of technology professionals across the world believe a significant part of their job will be automated within ten years, rendering their current skills redundant.

The economic indicators in the US were generally favourable and jobs numbers were quite positive. Canada’s economy continues the same tepid trend we have seen for quite some time. Sometimes up a little, sometimes down a little, with unemployment hovering around the 7% mark.

That’s what I saw affecting the tech industry for November 2016.  Until next month Walk Fast and Smile!

Liar, Liar…

Morley Surcon By Morley Surcon,
Vice-President, Western Canada at Eagle

Liar Liar

Shocking news — people lie!

There are many, many sources on the web showing how prodigiously people fib on their resumes and social profiles.  One such article suggests that over half of resumes and job applications contain falsehoods.  Misrepresentations can range from job titles and dates of employment to out-right lying about where one has worked and the education that they have… and everything in between.

In a slower economy, where there are more applicants than jobs, staffing agencies have witnessed a greater “stretching of the truth” by some independent contractors.  For example, something that our company has been calling “resume blurring” becomes much more common.  This is less of an outright lie, but more of a stretching of the truth.  Resume blurring comes into play when people re-write their resumes to broaden the types of roles for which they might be a fit.  For example, an IT contractor who has been a Project Manager might now have a resume that appears that they’ve got a lot more Business Analysis experience than they really do, or vice versa.  As the two roles work so closely hand-in-hand, it is often difficult for clients and employers to weed out the candidates that kind of know the job versus the ones that have actually been doing the job and are experts at it.

Other times the deceptions are even more blatant.  We have seen instances where contractors actually “buy” resumes and other people take phone interviews for them to win them the job.  We’ve even had someone complete a skype interview for another person!  (That’s a harder one to pull off)  Regardless of what the falsifications are, it comes down to the fact that there needs to be a much deeper level of due diligence completed by recruiters.  Honest contractors deserve a fair shake and the only way this is going to happen is through deeper background and reference vetting.

Again, when the economy offers fewer jobs than there are qualified applicants, companies often feel that they don’t need the services of employment agencies as they can gather more than enough resumes on their own.  But given the propensity of some people to embellish or outright lie on resumes/applications, this is the time when they really need a good staffing agency partner the most.  At Eagle, over our 20 years in business, we have come to know a large percentage of the independent contractors in the market. We’ve tracked their careers and we have relationships with many that span years.  We know these technology professionals, we know what they do and have done, we know that they are the “real deal” and we share this information with our clients.  And for contractors that are new to us, we complete a series of interviews, background vetting and reference checks before sharing their information with our clients; in this way, we get to know them and ensure they are what they claim to be.

For the reasons listed in the paragraph above, honest and professional contractors should make it a point to build strong relationships with their recruiter partners as we can be the voice of reason helping you to compete with the desperate people (or outright charlatans) in the market.

Have you witnessed any new or innovative ways that some people try to fool their way into jobs?  I encourage you to share your stories below!

 

 

Quarterly Job Market Update for Q3 2016

Kevin Dee By Kevin Dee,
Chairman of the Board at Eagle

This post was originally published on the Eagle Blog

General Observations:

The third quarter of 2016 continued the “new normal” for Canada’s economy, which was not a positive thing!  Until oil prices get up into the $70+ range, consistently, we are unlikely to see a recovery in the very important oil sector.  Interest rates remain low but need to edge up in anticipation of the next recession, but the mere suggestion of interest rate increases causes a weakening in the markets.  The US economy continues to improve, but we are not seeing the expected “pull through” that we have seen in the past.  The Canadian dollar hovers around the 75c US mark which makes it more expensive for imports and Canada imports more than it exports.

The unemployment rate at the end of the third quarter was 7% which was a 0.2% worse than the 6.8% of Q2, but slightly better than the Q1 rate of 7.1%.  During the previous 12 months Canada added 139,000 jobs which was 21,000 more than the 12 months up to last quarter.  In a sign of our changing times, the majority of these were part time jobs.

The stock market continues to be volatile, and is one of the sources of concern for the Bank of Canada.  For the purposes of this report I focus on the TSX and it has enjoyed a reasonable period of growth, currently at around 15,000 points as opposed to 14,100 points at the end of the 2nd quarter.

As already mentioned, the oil patch continues to take a pounding and we don’t anticipate much positive change before 2018.  With oil starting to settle at around $50 a barrel we are not likely to see the start of any major projects.  The reality is that many companies in the oil patch are considering even more cost saving initiatives including layoffs.  Many companies are looking at divesting Canadian assets and investing in other geographies with less opposition and more government support.  Many workers who migrated to the oil patch during the boom have left, which will make things even tougher when a recovery happens because it will be difficult to entice them back.

The Canadian dollar in comparison to the US dollar is a long way from the days when we flirted with, and passed parity.  At time of writing the dollar is hovering between 75c US and 76c US, which is just a couple of cents weaker than the end of Q2.  The good news is that this helps the oil patch because they sell in US dollars and most costs are in Canadian dollars.  It is also helpful to our manufacturing sector, but that sector has been severely depleted over the years and Canada is a net importer meaning that overall a weak Canadian dollar is not good for Canada.

The banking sector, while a big user of talent and one of the largest employers in Canada, is also very careful.  The banks continue to be very careful with their hiring and are being careful to control their staffing levels.  Toronto and Montreal continue to demand talent, just perhaps a little more restrained than in other times.

The telecommunications companies are other big employers in Canada and are also very cost conscious.  While they demand the best talent in order to compete, they too, are also careful about keeping employment costs under control.  Some of the drivers of demand here include the highly competitive nature of the business, investment in infrastructure, technological innovation and a need to plan for a retiring “Boomer” workforce.

The US economy continues to add jobs, but at a reduced rate of about 150,000 per month.  The demand for skills in the US will lure talent from Canada which is good for the individuals but not so good for Canada in the long term.  What has not happened, and is different from previous economic times, is that Canada’s economy has not improved along with our neighbours, which is one of the indicators of a “new normal”.

The construction industry seems to be forever busy, to which anyone trying to get work done will attest.  Despite the slowdown in the big jobs like the oil sands, there appears to be a constant demand caused by infrastructure upgrades in many of our cities and we have the promise of more such work funded by our growing national debt (was that my out loud voice?).

The Liberal government has been in place for about a year and are continuing to both spend and raise taxes.  One example is their forced carbon tax, which is really just a money grab (does anyone really think this money won’t go into regular government coffers?) and is going to cost Canada jobs and hurt Canada’s economy at a time when it can ill afford it.  There are some expected government projects and infrastructure spending initiatives that should benefit the private sector.  In addition, spending in some ministries will be reduced as others benefit from the new agenda.  Some opportunities will be seen in sectors such as health, environment and education.

The Canadian Staffing Index is an indicator of the strength of the largest provider of talent in any economy (the staffing industry) and an excellent barometer of the health of Canada’s economy. The latest score for the Index was 108 in September, which was up 2 basis points from the end of Q2.

Here at Eagle the big impact on our business continues to be the oil patch, but other clients are taking advantage of a tough economy to look at their cost base.  This has led to layoffs and slower hiring patterns.  Year-over-year the number of people applying for jobs has increased by about 11.75%.  Demand from our clients was down more than 8% year-over-year.  This suggests to us that the people affected by the layoffs are now active in their job searches.  We also believe that demand is very patchy, with no sectors booming in demand for professionals.

More Specifically:

Toronto is one of the largest cities in North America with a population exceeding 6 million and the GTA (Greater Toronto Area) is home to the most head offices (almost 700) and most head office staff (around 75,000) in Canada.  Consequently it is also the hottest job market in Canada and generates about 60% of Eagle’s business.  While it remains a busy market we have seen some impact from downsizing in large companies that has increased the availability of senior people in the market.  Having said all that, if I were looking for work this is where I would like to be.  The sectors that are always looking for people include the financial, insurance, government and telecommunications sectors in addition to the retail sector and the construction industry.  There is also a fair amount of demand in the engineering and manufacturing space.

Western Canada and more specifically Calgary as the “oil capital” of Canada, has taken the brunt of the hit from the drop in oil prices.  There have been multiple rounds of layoffs, and more are projected, with the possibility that it may be 2018 before we see a recovery.  When the big oil companies are hurting there is a trickle-down effect to all of the services companies that serve them and the local economy is affected in retail and housing specifically.  The NDP government has done nothing to help boost confidence in Alberta for investors.  It should not be forgotten that both Saskatchewan and British Columbia have an oil sector too, and while they have been equally hit, those provinces seem to be doing better because their economies are less dependent on one sector and certainly Saskatchewan is a better managed province.  We have seen reasonable, but not strong, demand for talent in Vancouver, Regina, Winnipeg and Edmonton but remain cautious about the longer term impact of the loss of oil revenues.  This could affect everyone as provincial tax coffers suffer and the ancillary businesses are hit.

Eagle’s Eastern Canada region covers Ottawa, Montreal & the “Maritimes”. There is a better mood in Ottawa and within the Federal Government (other than the morale issues caused by a non-functioning pay system) but that has not translated into a bunch of work, as we know the contracting process is long and arduous.   There is an expectation that the Liberal government will get some projects back on the books, and there is optimism that a new agenda will lead to more business in the National Capital Region specifically.  Montreal is relatively unchanged, not booming but a steady demand for resources, particularly in the financial and telecommunications sectors.  The Maritime Provinces have traditionally had higher rates of unemployment and this continues to be the case.

The Hot Client Demand

At Eagle our focus in on professional staffing and the people in demand from our clients have been fairly consistent for some time.  Program Managers, Project Managers and Business Analysts  always seem to be in demand. It might just be our focus, but Change Management and Organizational Excellence resources are in relatively high demand too. Big data, analytics, CRM, web (portal and self-serve) and mobile expertise (especially developers) are specializations that we are seeing more and more. On the Finance and Accounting side, we see a consistent need for Financial Analysts, Accountants with designations and public accounting experience plus Controllers as a fairly consistent talent request. Expertise in the Capital markets, both technical and functional, tends to be a constant ask in the GTA.  Technology experts with functional expertise in Health Care is another skill set that also sees plenty of demand.  This demand fluctuates based on geography and industry sectors, so we advise candidates to watch our website and apply for the roles for which they are best suited.

Summary:

Canada’s economy continues to languish, and since the last recession we have been caught in a continual low interest rate, stimulus focused cycle that has never quite taken off.  The more recent “oil recession” has hit Canada hard, given that we are a resource rich country and there is no near end in sight.  Statistics show there are jobs being added in Canada, but the numbers are not impressive particularly when you see how the US is doing and most of those jobs are part time.

Federal and provincial governments are talking about stimulus spending and infrastructure projects, so there is an expectation this will create some boost to the economy, although I have not seen it.  If interest rates remain low, as expected, and the dollar remains fairly low, then we might also see some further growth in Canada’s relatively small manufacturing base.

Given that investment portfolios have recovered from the 2008 recession, we are seeing a rise in the Boomer retiree population which will create demand for highly skilled resources.  With Canada’s overall unemployment rate at 7%, we can deduce that the unemployment rate for trades and skilled workers to be much lower, perhaps even approaching skill shortage levels.  Even in these uncertain times, we see shortages in many niche skill areas.

There are definitely still opportunities created because of those retiring Boomers and the need for companies to remain competitive.  We see opportunity in the construction industry, the financial sector, the telecommunications sector and the insurance sector.  We see the markets with the greatest demand as being Toronto, Vancouver and perhaps Montreal.  Ottawa is showing promise and could pick up if new projects are initiated by the federal government.  Government spending will also provide a temporary boost to employment as the stimulus money becomes available.

That was my look at the Canadian job market for the third quarter in 2016 and some of its influences.

What’s Really Going to Happen to the Price of Oil?

Cameron McCallum By Cameron McCallum,
Regional Vice President at Eagle

The Edmonton Branch of Eagle held a Contractor Appreciation event just last week in Edmonton and I always enjoy the opportunity to meet those who share the front line of the IT contracting world. And as usual, while much of the chatter involves getting to know everyone just a bit better, there comes a point in the conversation where the inevitable happens and the discussion turns to the market and what our predictions are for the short and long term future of the economy. And a big part of the discussion this time around centered on the situation in the oil patch.

First off, Edmonton is not Calgary. Edmonton’s economy is more diversified and less directly impacted by the low price of oil. We have a large public sector that spends massively in health care, infrastructure and education. There is a thriving small to medium business sector that provides all kinds of products and services and employs a large number of Albertans. But also true is that the funds that the public sector uses to fund its projects comes from revenue directly related to the resource sector and many of those small to medium sized business’ products and services are directly targeted at the oil industry. So it was no surprise that the question being debated amongst a number of attendees was just what was going to happen to the price of oil.

What's Really Going to Happen to the Price of Oil?This article written by Peter Tertzakian for OilPrice.com uses the analogy of the fashion world to describe why oil prices might just be ready to ascend.  Given how interesting and relevant it is to the discussions I had just last week with independent contractors in Edmonton, I thought I’d take the opportunity to share it with all of our readers on the Talent Development Centre:

Why Oil Could Head Back To $90 Sooner Than Thought

IT Industry News for September 2016

Kevin Dee By Kevin Dee,
Chairman of the Board at Eagle

This post first appeared on the Eagle Blog on October 6th, 2016
Tech News HeaderThis is my 30,000 foot look at events in the ICT industry for September 2016.

What you see here is a précis of the monthly report I produce, which will be available in more detail at the News section of the Eagle website, where you will also find back issues.

A Little History of September in previous years …
Five years ago in September 2011 Broadcom paid $3.7 Billion for NetLogic.  Google was busy, buying restaurant reviewer Google signZagat plus acquiring 1,000 patents from IBM.  Ottawa’s Zarlink was bought by Microsemi for $525 million.  SAP bought Crossgate, Twitter bought Julpan and CSC bought Indian software testing company AppLabs, and Hitachi Data Systems continued the consolidation in the storage industry with the acquisition of BlueArc.  September 2012 was a quiet month in M&A deals.  Infosys increased its management consultancy capability with the $330 million purchase of Lodestone.  Lenovo bought Stoneware, a software company focused on the cloud, and Ericsson bought ConceptWave.  A couple of interesting investment moves saw Microsoft invest in Klout and Silicon Valley VC Chameth Palihapitiya invest in Xtreme Labs. Three years ago in September 2013 Blackberry announced a quarterly loss of almost $1 million and laid off 4,500 people. Microsoft bought Nokia’s devices and services unit for more than $7 billion. Ebay paid $800 million for payment platform Braintree; Synnex bought IBM’s customer care division for $505 million; Rogers added to its data centre capacity with the $161 million purchase of Pivot Data Centres; Extreme Networks bought Entersys Networks for $180 million; and Manitoba Telephone Microsoft logoSystems bought Epic Information Systems.  September 2014 saw some big deals announced, including Microsoft’s $2.5 billion purchase of gaming company Minecraft, Lenovo’s $2.1 billion purchase of IBM’s x86 server business and Cognizant’s $2.7 billion purchase of healthcare company, Trizetto Corp.  Hootsuite had an injection of cash and bought two companies, social telephony company Zeetl and social media marketing platform Brightkit.  Google also made two acquisitions, biotech company Lift Labs and desktop polling company Polar. There were plenty more deals announced, including Yahoo’s $8 million purchase of cloud based document hosting company Bookpad; Cisco’s purchase of private cloud company Metacloud; SAP’s purchase of expense software company Concur; Blackberry’s purchase of virtual identity software startup Movirtu and Red Hat’s purchase of mobile app company FeedHenry.  Last year in September 2015 there was a fair bit of M&A activity but no blockbuster deals.  Microsoft was very active, closing three deals, IBM logoAdxstudio which provides web based solutions for Dynamics CRM; app developer Double Labs; and cloud security firm Adallom.  Accenture picked up the cloud services company Cloud Sherpas; IBM added cloud software startup StrongLoop; Netsuite paid $200 million for cloud based marketing company Bronto Software; and Blackberry paid $425 million for competitor Good Technology.  Hardware company Konica Minolta bought IT Weapons; Qualcomm bought medical device and data management company Capsule Technologie; Networking and storage company Barracuda Networks bought online backup and disaster recovery company Intronis; and Compugen bought some of the assets of another Canadian company Metafore.

Which brings us back to the present …

HP new log 2016September 2016 was a slow month for M&A but there were a couple of large deals.  Tech Data paid $2.6 Billion for the technology solutions group of Avnet, and HP made the biggest printer acquisition to date, paying $1.05 Billion for Samsung’s printer business.  Other deals saw Google pay $625 million for Apogee, and restaurant company Subway bought online order taking software company Avanti Commerce.  One investment that caught my eye, in the staffing world saw Accenture invest in crowdtesting company Applause.

Economic news was generally positive around the world with a few exceptions, Brazil being the most obvious having had 17 straight months of job losses.  The US was, surprisingly to me, fairly positive in most indicators despite the upcoming election and their “interesting” potential presidents.  The Canadian outlook seemed generally positive, of course these reports were prior to announcements of carbon taxes.  The economy certainly doesn’t “feel” positive.

Yahoo logoYahoo had some more bad press, this time for a security breach that happened two years ago affecting 500 million accounts and Blackberry announced that it was getting out of the hardware business.

A couple of studies looking at emerging technologies saw increasing investment in big data analytics and IoT in the manufacturing sector and a suggestion that robots might only replace 6% of jobs in the future.  (I wonder if a robot could become President? Or Prime Minister? OR Premiere?  Pretty sure right now I might vote for them!))

That’s what caught my eye over the last month, the full edition will be available soon on the Eagle website.  Hope this was useful and I’ll be back with the October 2016 tech news in just about a month’s time.

IT Industry News for August 2016

Kevin Dee By Kevin Dee,
Chairman of the Board at Eagle

This post first appeared on the Eagle Blog on September 8th, 2016

Tech News HeaderThis is my 30,000 foot look at events in the Tech industry for August 2016. What you see here is a précis of the monthly report I produce, which will be available in more detail at the News section of the Eagle website, where you will also find back issues.

A Little History of August in previous years …

Five years ago in August 2011 Hurricane Irene hit the US coast, there was a mini-market crash and the world’s economies continued to struggle.  Google paid $12.5 billion for Motorola Mobility and IBM paid $387 million to add Algorithmics to its analytics portfolio, they also bought UK based analytics company i2.  Skype which was in the process of being merged into Microsoft, bought GroupMe, Bitly bought Twitterfeed and IBM logoCitrix bought Ringcube.  August 2012 was slow in the M&A space with IBM busiest, paying $1.3 billion for HR solutions and services company Kenexa, plus they bought flash memory developer, Texas Memory Systems.  The other “big name” deal was Google’s purchase of social media marketing company Wildfire Interactive, reputedly for $250 million.  Three years ago in August 2013 IBM paid $1 billion for Trusteer, a cybersecurity company specialized in the financial services sector;  Qualcomm sold its fleet management software unit for $800 million to private equity firm Vista Equity Partners; and the other big dollar buy was AOL paying $405 million for online video company Facebook logoAdap.tv.  Facebook bought speech recognition company Mobile Technology; Software AG bought analytics firm Jackbe; Opentext paid $33 million for cloud based software company Cordys; and SAP bought ecommerce company Hybris.  August 2014 saw no blockbuster deals, however a number of big name companies were out with their cheque books.  Intel paid $650 million for the LSI Axxia networking chip business; Vmware bought application delivery provider CloudVolumes; IBM bought Lighthouse Security Group to bolster its cloud based identity and access management capabilities; Google bought two startups, Emu to boost its messaging capabilities and Directr for its video advertising business; Facebook bought a security startup Privatecore, and the last BIG name saw Yahoo buying app company Zofari.  Last year in August 2015 there were two billion dollar deals.  Symantec sold Veritas (which it paid $13.5 Billion dollars for 10 years ago) to a group of investors for $8 Billion.  IBM also paid ”big bucks”, shelling out $1 billion for Merge Healthcare.  Smaller deals saw Calgary based Above Security bought by Hitachi; Transcomos bought 30% of Vietnamese daily deals site Hotdeal; Freshdesk bought live-chat company 1Click; and PLDT bought ecommerce startup Paywhere.

Which brings us back to the present …

August 2016 saw a fair bit of M&A activity although there were no billion dollar deals.   The largest deal saw global staffing company Randstad buy one of the larger job boards, Intel logoMonster for $429 million.  A similar sized deal saw Intel shell out $408 million for artificial intelligence company Nervana.  Hewlett Packard Enterprises paid $275 million for SGI (what was left of Silicon Graphics); Apple paid $200 million for artificial intelligence company, (there is a pattern here), Turi; Salesforce bought business analytics company Beyondcore for $100 million; and ScanSource paid $83.6 million for telecom cloud services company Intelisys Communications.

Microsoft logoOther acquisitions saw Microsoft snap up two companies, artificial intelligence scheduling software company Genee in addition to their XBox division buying interactive livestreaming company Beam.  Nutanix is buying two companies to bolster its Enterprise Cloud Platform, Calm.io, a DevOps automation company and PernixData, which offers data analytics and acceleration capabilities.   Other smaller deals saw Palantir, an analytics and consulting company buy data visualization startup, Silk; and Magnitude software is buying Vancouver based, data access and analytics company Simba.

Cisco was in the news for more layoffs, announcing 5,500 people, approximately 7% of their workforce, will lose their jobs as the company switches its focus from hardware to software.

Economic indicators around the globe were not too bad, with the US still talking growth, albeit slightly slower than previously expected.  Other markets generally saw positive numbers on employment, except perhaps Mexico and Canada (which lost 31,000 jobs in July).

A number of reports looking at emerging tech markets suggest that IoT, Cloud services and Video as a Service are all areas of growth … and thus possible areas for investment.

Eagle logoThat’s what caught my eye over the last month, the full edition will be available soon on the Eagle website.  Hope this was useful and I’ll be back with the September 2016 industry news in just about a month’s time.

Until then, Walk Fast and Smile!

Calgary Job Market Outlook: The New Normal

Morley Surcon By Morley Surcon,
Vice-President, Western Canada at Eagle

Calgary Job Market Outlook: The New Normal The New Normal” is a phrase that has been used to describe the aftermath of a paradigm-changing event.  As recently as 2014, Calgary’s economy/job market/opportunity outlook was very robust, then the floor fell out of the oil market.  Since then, over 40,000 knowledge worker jobs were lost and the city is sitting at 8.6% unemployment, 1.7% higher than the Canadian average of 6.9%.  Economists are predicting a continued contraction, but at a slowing rate, as Calgary find its new equilibrium.

Over the next 12 months, economic conditions will continue to improve, but few believe that the economic spin-off from the Oil industry can or will reach the pre-oil-crash highs.  Some companies are gone completely — whole industries have been shipped off to be served by the global labour force.  These are unlikely to come back.  Hence, talk of “the new normal”.

As the Calgary economy does begin turning around, it is anticipated that independent contractors (contingent labour) will be leveraged prior to direct, permanent job openings seeing a recovery.  New expectations with respect to lower contract rates and salaries will need to be adopted by the labour market, which is happening already. The premiums that Calgary workers have enjoyed for close to a decade will be brought in line, nearer to those of the rest of Canada. Companies will do their best to stick to the cost-cutting plans that they’ve put in place, resulting in limited opportunity to raise rates and build larger teams; and we may see stronger interest in “generalists” vs. “specialists” as the need to wear multiple hats will likely exist.

In the vacuum created by Calgary’s imploded Oil and Gas industry, we are seeing this city’s entrepreneurial spirit sparking to life.  Calgary has one of the youngest and best educated labour markets in North America.  Prairie values of strong work ethic and the ability to tighten belts are resulting in people making the needed adaptations to take transferable skills to other new and existing industries.  Organizations such as Calgary Economic Development are actively pursuing companies/industries remote to the city, encouraging them to re-locate or open new offices to take advantage of the surplus of knowledge workers, including many IT professionals, now available.  Some nay-sayers are beginning to draw parallels between Calgary and Detroit; however, the skills, education and entrepreneurial spirit truly set Calgarians apart.  A good article discussing Calgary’s favourable outlook can be found in this Globe and Mail article.

So, what is the “new normal” for the labour market in Calgary?  Well for the short to medium term, it is certainly going to mean continued pressure on independent contractor rates and employee salaries; and many Oil and Gas positions have left, never to return again.  However, in the medium-long term, Calgary’s prospects are still very bright — there will be a period of transition, re-building and re-tooling but the raw energy, enthusiasm and talent that exists in Calgary’s working population will help the City to re-invent itself.  The hurdles will be great, but our collective determination will be greater.  Calgary’s potential remains unmatched and it will, again, be the pearl of Canada’s labour market; Calgary’s economy will re-emerge, more diversified and, in this way, stronger than before.

My city’s new normal is coming and I, for one, am looking forward to our bright future!

Quarterly Job Market Update Across Canada – July 2016

Kevin Dee By Kevin Dee,
Chairman of the Board at Eagle

This post first appeared on the Eagle Blog on July 26th, 2016
Canadian Job MarketGeneral Observations:

There were some positive signs from the second quarter of 2016, but that sentiment by no means suggests it has been a booming market.  Despite some slight increase in oil prices we have seen no positive effect on jobs in the oil patch, and the lack of government support means that confidence in the sector is still low which will result in less potential for investment.  The Fort McMurray fires just “piled misery on” for an already beleaguered province, costing more jobs and lost productivity.  We have not yet seen any stimulus in employment from promised government spending, although it is possible we just haven’t seen it.  The Brexit decision caused ripples in the market, much debate and has had had no impact on employment yet.  It may become an area of opportunity, but that remains to be seen.  The weak dollar has helped some sectors such as the oil patch and the manufacturing sector, plus it is still business as usual for other sectors like the services sector, retail, banking, construction and telecommunications.

The unemployment rate at the end of the second quarter was improved to 6.8% from the Q1 rate of 7.1%.  During the previous 12 months, Canada added 108,000 jobs which was 22,000 less than the 12 months up to last quarter.  It is worth noting that the US continues to add jobs at a rate of 200,000 jobs every month, so we should expect to be adding 20,000 a month to keep pace (so 240,000 jobs in the last 12 months should be an expectation)!

TSXThe stock market continues to be volatile, and had an interesting ride with the Brexit announcement.  Having said that, things have generally settled down in the markets.   I focus on the TSX for this report and it ended Q2 at around 14,100 points which was up about 600 from the end of Q1.

oil rigAs already mentioned the oil patch continues to take a pounding and we don’t anticipate much positive change before 2018.  With oil starting to settle at around $50 a barrel we should see some activity but it will need to settle there for a while before companies act.  Many companies are looking at divesting Canadian assets and investing in other geographies with less opposition and more government support.  Many workers who migrated to the oil patch during the boom have left, and they will be difficult to replace when a recovery does happen.

Canadian dollar the LoonieThe Canadian dollar in comparison to the US dollar is a long way from the days when we flirted with, and passed parity.  At time of writing the dollar is worth about 76c US, which is just a couple of cents weaker than the end of Q1.  The good news is that this helps the oil patch because they sell in US dollars and most costs are in Canadian dollars.  It is also helpful to our manufacturing sector.  Exporters will enjoy favorable pricing too; however, exports have been adversely affected by the economic woes of our trading partners like China.

The banking sector, while a big user of talent and one of the largest employers in Canada is also very careful.  Recent initiatives have seen the banks rationalizing their workforce to ensure they are competitive.  Toronto and Montreal continue to demand talent, just perhaps a little more restrained than in other times.

cell towerThe telecommunications companies are another big employer in Canada and are also very cost conscious.  While they demand the best talent in order to compete, they are also careful about keeping employment costs under control.  Some of the drivers of demand here include the highly competitive nature of the business, investment in infrastructure, technological innovation and a need to plan for a retiring “Boomer” workforce.  The recent purchase of Wind by Shaw might increase competition and potentially open up opportunities should all of the regulatory approvals go through.

The US economy has been adding more than 200,000 jobs a month and while there were a couple of slower months in this last quarter, they made up for it in June.  The result is that the US is still adding 200,000 jobs a month on average.  The demand for skills in the US will lure talent from Canada which is good for the individuals but not so good for Canada in the long term.

ConstructionThe construction industry seems to be forever busy, to which anyone trying to get work done will attest.  Despite the slowdown in the big jobs like the oil sands, there appears to be a constant demand caused by infrastructure upgrades in many of our cities and we have the promise of more such work funded by our growing national debt (was that my out loud voice?).  Anecdotally I have seen numerous Alberta plated cars on job sites around the GTA, which supports the theory that many workers have come back from the oil patch and are finding work elsewhere.

The Liberal government has been in place for about nine months and are continuing to both spend and raise taxes.  There are some expected government projects and infrastructure spending initiatives that should benefit the private sector.  In addition, spending in some ministries will be reduced as others benefit from the new agenda.  Some opportunities will be seen in sectors such as health, environment and education.

The Canadian Staffing Index is an indicator of the strength of the largest provider of talent in any economy (the staffing industry) and an excellent barometer of the health of Canada’s economy. The latest score for the Index is 106 in June.  This indicates a 3% month over month increase in demand for labor and a 5% year over year increase.

Eagle LogoHere at Eagle the big impact on our business continues to be the oil patch, but also many clients are taking advantage of a tough economy to look at their cost base.  This can lead to some layoffs and slower hiring patterns.  Year-over-year the number of people applying for jobs has increased by about 3% and there was a 7% decrease since the last quarter.  Demand from our clients was down 4% year-over-year, and also down 3.5% from last quarter.  This suggests to us that the people affected by the layoffs are now active in their job searches.  We also believe that demand is very patchy, with no sectors booming in demand for professionals.

More Specifically:

cn towerThere is really very little change from my report last quarter.  This is the one market in Canada that has a continual demand for talent.  Toronto is the 5th largest city in North America with a population exceeding 6 million.  The GTA (Greater Toronto Area) is home to the most head offices (almost 700) in Canada and most head office staff (around 75,000).  Consequently it is also the hottest job market in Canada and generates about 60% of Eagle’s business.  While it remains a busy market we have seen some impact from downsizing in large companies that has increased the availability of senior people in the market.  Having said all that, if I were looking for work this is where I would like to be.  The sectors that are always looking for people include the financial, insurance, government and telecommunications sectors in addition to the retail sector and the construction industry.  There is also a fair amount of demand in the engineering and manufacturing space.

The Saddledome in CalgaryAgain very little change from last quarter.  Western Canada and more specifically Calgary as the “oil capital” of Canada, has taken the brunt of the hit from the drop in oil prices.  There have been multiple rounds of layoffs, and more are projected, with the possibility that it may be 2018 before we see a recovery.  When the big oil companies are hurting there is a trickle-down effect to all of the services companies that serve them and the local economy gets affected in retail and housing specifically.  The NDP government has done nothing to help boost confidence in Alberta for investors.  It should not be forgotten that both Saskatchewan and British Columbia have an oil sector too, and while they have been equally hit those provinces, seem to be doing better because their economies are less dependent on one sector.  We have seen reasonable, but not strong, demand for talent in Vancouver, Regina, Winnipeg and Edmonton but remain cautious about the longer term impact of the loss of oil revenues.  This could affect everyone as provincial tax coffers suffer and the ancillary businesses are hit.

Parliament building in OttawaEagle’s Eastern Canada region covers Ottawa, Montreal & the “Maritimes”. There is a better mood in Ottawa and within the Federal Government (other than the morale issues caused by a non-functioning pay system) but that has not translated into a bunch of work, as we know the contracting process is long and arduous.   There is an expectation that the Liberal government will get some projects back on the books, and there is optimism that a new agenda will lead to more business in the National Capital Region specifically.  Montreal is relatively unchanged, not booming but a steady demand for resources, particularly in the financial and telecommunications sectors.  The Maritime Provinces have traditionally had higher rates of unemployment and this is not changing much so work is tough to find.

The Hot Client Demand.

At Eagle our focus in on professional staffing and the people in demand from our clients have been fairly consistent for some time. That would include Program Managers, Project Managers andBusiness Analysts who always seem to be in demand. It might just be our focus, but Change Management and Organizational Excellence resources are in relatively high demand too. Big data, analytics, CRM, web (portal and self-serve) and mobile expertise (especially developers) are specializations that we are seeing more and more. On the Finance and Accounting side, we see a consistent need for financial analysts, accountants with designations and public accounting experience plus controllers as a fairly consistent talent request. Expertise in the Capital markets, both technical and functional, tends to be a constant ask in the GTA.  Technology experts with functional expertise in Health Care is another skill set that also sees plenty of demand.  This demand fluctuates based on geography and industry sectors, so we advise candidates to watch our website and apply for the roles for which they are best suited.

Summary:

The basic message is … more of the same!  The oil patch continues to be in trouble with 2018 the latest target for a recovery of sorts.  Statistics show there are jobs being added in Canada, but the numbers are not impressive particularly when you see how the US is doing.

Federal and provincial governments are talking about stimulus spending and infrastructure projects, so there is an expectation this will create some boost to the economy.  If interest rates remain low, as expected, and the dollar remains fairly low, then we might also see some further growth in Canada’s relatively small manufacturing base.

With Canada’s overall unemployment rate at 6.8%, we can deduce that the unemployment rate for trades and skilled workers to be much lower, perhaps even approaching skill shortage levels.  Even in these uncertain times we see shortages in niche skill areas.

There are definitely still opportunities created because of the demographic pressures (retiring Boomers) and the need for companies to remain competitive.  We see opportunity in the construction industry, the financial sector, the telecommunications sector and the insurance sector.  We see the markets with the greatest demand as being Toronto, Vancouver and perhaps Montreal.  Ottawa is showing promise and could pick up if new projects are initiated by the new government.  Government spending will also provide a boost to employment as the stimulus money becomes available.

That was my look at the Canadian job market for the first quarter in 2016 and some of its influences.

The Future of Work: Technology and Automation

David O'Brien By David O’Brien,
Vice President, East Region & Government Services at Eagle

The Future of Work: Technology and AutomationAs the summer of 2016 rolls in, it would certainly appear that a phenomena that has been 30 years in the making is beginning to come to light. Rapid changes in technology and the job market are affecting the ways we live and work. For one example of major change, have a look at our neighbours to the south where an idea has seemingly and inexplicably risen to a level not yet fathomed other than as a joke mere months ago; the rise of The Donald, as in Trump, looks as though it may be here to stay… a scary thought indeed.

As a Canadian observer on the sidelines, there are some issues we certainly need to be aware of as the Trump vs Clinton presidential contest takes over our airwaves and party talk in the months ahead. For instance, Mr. Trump has made huge grounds on the backs of being anti-trade, anti-NAFTA in particular, claiming that trade is the mechanism with which Americans have lost thousands of manufacturing jobs to China, Mexico etc. Ours here is not to debate free trade but let’s look a little closer at what was the real change, the role technology has played, and crystal ball the perhaps forthcoming for IT jobs.

We do know for sure that both Canada and the US have lost manufacturing jobs over the last decade or more, Canada in particular has suffered deeper declines. The US’s lost jobs, though, in terms of productivity or manufacturing output, has increased dramatically, and manufacturers make on average more than twice the “stuff” they did in 1977. Therefore, it is safe to say the disruptive force at play affecting manufacturing jobs dramatically has not been trade, trade agreements, immigration or globalization. The disruptive force is technology and automation. And, while manufacturing jobs have disappeared, the business services sector grew over the same time and is now three times the size of the manufacturing sector.

So now what? The future of work stands to be disrupted like nothing we have seen in history. The pace of change in the way we work and work itself will be exponential in the coming years.

Artificial Intelligence (AI) and robotics are changing the way we work and live. Google, Facebook, Amazon, and IBM are all working very hard at monetizing their AI portfolio. The likely early leader will be Google and its DeepMind AI, an example of AI capable of deep learning, yes learning. In addition, Amelia is an AI created by IPsoft that has learned how to do the job of call center employees and in 20 languages. And of course, we all are aware of the pending arrival of the self-driving car.

The game changer is that AI is becoming good for more than routine and non-cognitive tasks and beginning to take over the cognitive or learning tasks. The new frontier is any job that humans can do is no longer safe. The so called “Fourth Industrial Revolution” is soon upon us and will undoubtedly change us all. Jobs will disappear BUT new jobs and perhaps new definitions of work itself will emerge, that much we know… I think.