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| CURRENT SECTION :: Market Reports | UK's most visited IT Contractor Site - 250k unique visitors March 2008 |
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Yes or No Is the downturn over in the economy and the IT jobs market? It depends who you ask. The major IT companies are saying ‘yes’. The major job boards are saying ‘yes’. The Stock Market and the pundits are saying ‘yes’. But the IT agencies are still saying no. More Upbeat Quite a few of the major IT companies have reported recently on their profits and spoken about the current outlook and what is to come. Those companies, like IBM, Oracle, SAP and in the UK, LogicaCMG and Xansa have been almost overwhelmingly positive about the economy and about the IT market. The economic commentators, like Snow and Greenspan in the USA, have been very positive too, talking about US growth next year of more than 4%, and the US economy being “like a coiled spring”. The IT Job Boards are also saying that the recovery has begun. Recently CWJobs issued figures showing that the number of jobs advertised for contractors has risen by 7%, although the number for employees has gone down by 4%. Contractors First This is to be expected as contractors benefit first from any upturn, due to the fact that companies don’t want to take any long term decisions on hiring staff. Our part of the industry always rises first coming out of a downturn. The same effect is being seen on Jobstats, where the number of contract vacancies is starting to rise, whereas the number of permanent vacancies is flat. Also in the past couple of weeks, Jobsmeta, which monitors the number of jobs advertised across 17 different job boards, has seen a rise in the number of jobs advertised. This year, the number of jobs advertised (including duplicates obviously) has remained in the 19,000 to 20,000 range. The last two weeks has seen the vacancies rise to over 21,000. Accountants Too The Accountancy firms are also telling us that they are seeing a lot of new business with large numbers of new contractors joining them. The Stock Market is also rising, especially the tech stocks, and that is usually a pointer to recovery a few months down the line. However, of the nine major IT recruitment companies quoted on the Stock Market, none so far have said that there is any increase in business. The most common statement they make is that the market has bottomed out but they see no signs of recovery and are expecting not very much this year. So how does this tie up? Why are agencies being left out? Possible Reasons I don’t really know the answer to that, but I could put forward a few possible reasons:- 1) More contractors are going direct 2) The reason that the Accountants are seeing more contractors is that clients are taking on permies with the new skills as contractors, whilst still having the out-of-work contractors with the old skills still on their books 3) The reason that the number of jobs advertised is going up is that more employers are advertising jobs just to take on non-EU migrant workers. This doesn’t tie up though, as it is contract vacancies that are rising and not permie ones – and employers can only advertise for permies if they want to take on a non-EU migrant worker 4) There is a recovery in the business of the major IT companies, but this mainly comes from those specialising in offshore outsourcing. Indeed, Indian companies are now hiring staff at an astonishing rate, giving credence to this possibility 5) The recovery for agencies has started in America but it hasn’t started here yet. There is some evidence for that in that the world’s biggest agency Adecco are saying that their American market is starting to recover but that Europe is still slow. The share prices of the major agencies are starting to recover nicely there too, whereas our are still close to their bottom prices How Strange It is strange that agencies have not started to see any recovery yet. Anecdotally, some contractors are even saying that they are getting more calls than they were before. What we don’t want to happen is that there is a recovery in the economy, that there is a recovery in IT – but that we are left behind as the jobs are going offshore or to the non-EU migrant workers. However, it is too early to say that. It would still be nice, though, to hear that agencies are seeing some recovery as they mainly supply UK contractors and employees, and the agencies can’t take apply for Work Permits for non-EU migrants directly. The situation is looking better, but it is not clear enough yet if there is going to be a major recovery for us yet. Gerry McLaughlin Aug 4, 2003 Email this article Printer friendly page Previous Page
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