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It's not all depression and slit wrists, and for the first time since the spring there is some optimism to report. In the best bit of news to hit the contracting industry for several months, Lara Croft is back in a new adventure, the Underworld. Yes, every programmer's favourite girlfriend has returned and is bouncing around, murdering endangered species, in motion capture rather than in the original hand animation. Though many contractors, of course, like the occasional hand animation, Lara's famous assets are resplendent having been re-created, from scratch, for the very latest consoles. "Lara has never looked or moved better," gushed The Guardian. You might be tempted to check out some stills and the odd video – if you haven't already purchased a copy – while you're at work. According to research by Easynet, over 30% of small and medium sized businesses have no internet usage policies, and workers are often allowed to do ‘whatever they wanted’ on the web. Contractors would never use a client's internet facility for anything other than work, though. Especially during the current economic climate, because, even though Lara's return is cause for celebration, jobs are getting scarce and companies are dropping temporary workers like the Monetary Policy Committee is dropping interest rates. This month heard BT announce the cull of 6,000 IT contractor jobs by March 2009, as part of a wider cost-cutting strategy to eliminate 10,000 workers from its ranks. Google too will continue a plan to reduce its 10,000-strong freelance workforce, which includes data centre IT staff, programmers and developers. Atos Origin is another IT giant reducing its reliance on contractors. According to CWJobs, the IT contracts market slipped into recession – applied in its strict sense to mean a negative growth for two quarters back-to-back. Overall, available IT jobs contracted for two successive quarters, and contractors endured the brunt, with offers falling 13% on the second quarter and 25% on a year ago (against a fall of 9% and 7% respectively for full-timers). In the finance sector, the number of contractor job offers fell by 49% last month compared with September, meaning the supply of work has effectively halved in a month. Simply getting rid of contractors is not enough, either. JP Morgan Chase Bank this month cut its pay for IT contractors by 15%, and like the pay ultimatum initiated by Deutsche Bank months ago, refusal to accept the lower rate led to termination. Companies outside finance have caught this nasty habit of mid-contract rate reductions like a winter virus. Sources told CUK that one non-financer cut pay for IT contractors by 25%! In a sign of the times, CUK bulletin boarder OwlHoot reports, "Today an agent emailed me with a PHP job paying only £150 a day, whereas the lowest PHP rate I've ever been on was £250 a day three years ago. I told him to stuff it, but maybe in a few months that'll be the normal rate for PHP." Alexandra Kelly, director of City vetting firm Powerchex, did offer a glimmer that next year was "likely to bring an upswing in demand" for IT contractors. Pointing to analyst predictions, she suggested requirements of financial services was likely to "bounce back." But it is today's requirements that fill the news. The government is busy pumping billions into the economy in the hope it won't entirely deflate. In case you missed it, this month saw the VAT rate reduced by 2.5% to 15% in order to tempt consumers out of their glum Christmas hideaways and into the shops on a seasonal spending spree. VAT changes don't directly affect contractors except in a small detail (or if they happen to compete with non-registered freelancers), but while the Chancellor's eyes are elsewhere, other, contractor un-friendly, measures have been quietly sidelined. An attack on umbrella companies tax arrangements, and legislation for dealing with 'income shifting' – where income is shared between spouses – were missing from the PBR (Pre Budget Report). But the threat of government action has not been removed, says Simon Dolan, founder of SJD Accountancy. "The state is saying 'we don't know what to do with these proposals, we don't like them as they are, so we'll put them on the backburner because we've got other things to worry about'," he explained. But let's try not to worry at all. Be happy. As Shadow Health Secretary Andrew Lansley has pointed out, a recession can be good for you, especially if you have a PlayStation and a bit of imagination. Since I started with optimism, I'd like to end with it and a fantasy worthy of Lara Croft. Mitch the Tester, writing on the CUK bulletin board, suggests the government should direct recession-busting cash towards, "Ultra high speed magnet trains to every city in Europe, a moon mission, a hypersonic replacement for Concorde, and wine pipelines around Europe from Burgundy." Not least, he adds, "Order banks to re-hire all IT contractors with a 10% rate rise paid out of the directors’ salaries." William Knight Nov 28, 2008 Email this article Printer friendly page Previous Page
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