Telecom said it expected to take on about 300 information technology workers as it firmed up plans to bring work previously outsourced to computer company Hewlett-Packard back in-house.

Many of the jobs are expected to go to Hewlett-Packard staff who have been contracting to Telecom. Some work is likely to be brought back to New Zealand from overseas, but Telecom spokesman Ian Bonnar was unable to confirm whether the transition would create net new jobs as there would be "efficiencies".

Telecom has held "open days" in Wellington and Auckland in the past two weeks for HP staff interested in moving to Telecom, and more will be held in Christchurch this week. Hundreds of staff are understood to have attended, and Mr Bonnar said feedback had been positive.

"The sensible thing would be to fill the vacancies with as many HP people as possible."

The bulk of the new roles will be split between Wellington and Auckland, he said, with up to 20 new roles created in both Hamilton and Christchurch.

Telecom has worked out details of its information technology arrangements since its decision to bring some work back in-house was revealed by The Dominion Post in November. Mr Bonnar said a couple of key milestones were cleared last week.

It now appears the only business HP will retain will be the printing of Telecom bills. Server management, database management and application and development management would all be switched back to Telecom "within the next few months".

Before the November announcement it was feared as many as 1500 jobs might be lost to India as a result of the outsourcing contract being retendered at a cost of about $1.2 billion over 10 years. IBM and India's Tech Mahindra had competed against HP for the cancelled tender.

Hewlett-Packard New Zealand inherited the Telecom contract through its United States parent's 2008 acquisition of EDS, after former Telecom chief Theresa Gattung outsourced many of Telecom's IT functions to EDS in a 10-year, $1.5b deal in 1999.

The retention of the work in New Zealand is likely to improve an already-strong jobs outlook for the sector. Nathan Masters, general manager of Wellington IT recruitment firm Ninetwenty, said other big projects in the banking and telecommunications industries would keep the sector busy.

They included Telecom's structural separation, should it take part in the Government's ultrafast broadband rollout, and the merger of ANZ and National banks' core platforms, which would be one of the bigger projects Wellington would see this year. "There's a fair amount of optimism."

Grant Burley, director of Absolute IT, said a lingering belt-tightening mentality had kept salaries at bay. Absolute IT's salary survey for the six months ending November revealed the base median salary had increased by just 1 per cent during that period and salaries for those with high demand skill sets had changed very little or decreased.

Mr Burley said those firms that did not adjust remuneration offers would find it tough to attract and retain key staff this year.

Beyond Recruitment director Ben Pearson said demand for business analysts was very strong in the last six months of 2010 and that would filter through to project management and technical roles.

"When you see strong demand for business analysts coming into the new year it generally means positive things for the whole year. You've got a whole lot of projects commencing and people scoping and planning on doing things."

Elections and the prospect of a change in government usually had a dampening effect on business activity and recruitment, but he doubted the impact would be as noticeable this year. "There'll be a lull but I don't think we'll have six months of wind-down and then six months of wind-up."