IT contractor recruiters have their say on Osborne

IT Hiring, Contractors and Recruitment

• George Osborne used his Autumn Statement to confirm the measures announced previously on reforming employment rules.
   
• A consultation will be launched in spring 2012 on streamlining the current regulation of the recruitment sector. As highlighted by initial submissions, this will feature proposals on reducing the regulatory burden posed by the Conduct Regulations.
   
• In 18 months' time, the government will also review the paperwork involved in compliance with the Agency Workers Directive. This was one of the issues recently discussed by the Association of Professional Staffing Companies with Employment Minister Ed Davey. APSCo says it is worth noting that paperwork aspects are not covered by the social partners' agreement between the TUC and the CBI, which would otherwise expose any changes to legal challenges.
   
• Finally, Osborne referenced the Government's continued work on a proposal to merge income tax with national insurance contributions, which APSCo fears could have negative implications for contractors.

Youth IT Joblessness

• It's a tough time to be an IT graduate if you're not in education, employment or training as jobless records continue to rise, according to IT staffing firm Volt Europe.
   
• Combined with cautious employers, this will only increase the competition for jobs with only the lucky few succeeding. Consequently, the firm's European managing director Stephen Herring explained, a shift in graduates' expectations of employment may occur, from one of a work-life balance towards a more pragmatic view that any relevant employment is rewarding.
   
• Contract IT jobs specialist Outsource UK is currently seeing skills shortages in certain areas of IT, yet points out that the UK unemployment rate is firmly on the up.
   
• The recruiter says employers should be encouraged to hire more junior IT staff and offer training. "Too often I see a lack of investment in future staff by even the largest of employers," said Outsource managing director Paul Jameson. "As a parent, and an employer of young people, I see too little to help get young people into work. I would like to see more direct help offered to employers looking to take on apprentices, I would like to have seen tax cuts to help the employers of young people, either apprentices or other trainee schemes."
   
• Still, the Swindon-based firm welcomed the chancellor's plan to create a Youth Contract, to provide work experience in the private sector for youngsters, as did freelance IT staff recruiters at Cogs Agency.

Financial Services IT jobs

• While a chunk of IT contractors in financial services have already had their pay cut this year, their new concern from the chancellor's statement must be the increase in the Bank Levy and its potential knock-on effect on contract pay rates.
   
• A London-based services provider to the IT sector added that banks, despite their difficulties, remain a key source of work for IT contractors. But as it is unlikely the banks will want to take a new hit on their profits, such employers may look again at their expenditure on temporary IT staff to compensate for the hike in the levy.

Public sector IT recruitment

• Many public sector workers will come to the end of a 2-year pay freeze next year, only to find that their pay rises will be capped at 1% for two more years after that. This announcement, made the day before a strike over reform to pension plans, seems likely to APSCo to lead to even worse relations between the government and the unions.
   
• Worse for contractors, the chancellor wants to make 'public sector pay more responsive to local labour markets' - an attack on central negotiation of national rates.
   
• In the OBR report, the public sector is estimated to shed 710,000 jobs over the forecast period to 2016/17 - up from the previous estimate of 400,000, which related to a shorter period.

'Government must prepare its staff for cuts'

• The government must act now to ensure public sector workers are prepared for the job cuts, to ensure those who are being made redundant are in the best position to find new opportunities, said Hays IT, speaking before the updated official forecasts this week.
   
• "Failing to do this will not only leave public sector workers disadvantaged because they can't easily move sectors but could exacerbate problems if we experience a double-dip recession."
   
• The FTSE-listed recruiter says "more needs to be done" by the chancellor to support workers through the public-to-private transition. It warned Mr Osborne: "Failing to provide this support could limit the ability of ex-public sector employees to return to the labour market thereby risking an even greater increase in long term joblessness and blocking the private sector from the skilled workers it needs to stimulate growth."

'Nothing to help us survive or thrive'

Asked about the chancellor's statement, the head of a contractor IT jobs agency in London reflected: "From what I can see, it will make no difference other than the fact that we now definitely know we face heading into another recession. His speech and measures will make no difference at all to that, other than maybe to make things worse generally as all bad news does."