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Fears that the global credit squeeze will soon have a devastating and long-lasting effect on the recruitment of IT contractors are overblown and unfounded. Leading recruiters told Contractor UK that the financial turmoil will trickle down to impact the intake of IT contractors much more slowly than is widely anticipated. The first sign of a potential slowdown for IT contractors is in the second half of next year, when demand from financers may decline, albeit marginally, compared to 2007. But tabling the forecast, agents at Spring Technology, the UK’s largest IT recruiter, said any decline in contractor hires should be seen merely as a “blip” in the market. The potential slump is characterised by one of the agency’s largest banking clients, which initially said its intake of contractors would plummet due to the credit squeeze. But the decrease in contractors was not drastic, and the agency believes this scenario of caution followed by a return to normal recruitment levels will replicate into 2008. Spring said: “Whilst the ‘credit crunch’ has affected contractor spend and the economy in general, we believe that any downturn will not be significant and at worst will be slightly more subdued than the first half of 2007.” Within the Defence and Public sectors, traditionally seen as ‘recession-proof,’ the agency foresees no sign of any evidence of a downturn in contract recruitment. “Our major clients have projects booked that will be delivered over the next three years and there is no reason to believe that any of these will be cancelled. “The order intake is, and continues to be, strong and we are predicting that 2008 will bring similar results to 2007”, a spokesperson for Spring Technology said yesterday. In line with the outlook, a US-based IT recruiter has told CUK most of its clients are raising their budgets for 2008, citing concern over the mission critical status of their IT projects. And late last month, the status of America’s jobs market for self-employed IT workers was described to CUK as not stagnant, but “robust.” Mark Roberts, chief executive of the National Association of Computer Consultants Businesses, said in most instances, demand for IT freelancers still “outstrips supply.” Other than clients in the mortgage lending, housing or property banking sectors, both the US sources agreed “we are not seeing a fall off in demand” for IT contractors. The verdict is in spite of Gartner’s warning to CIOs in the UK and US that they must prepare a second ‘back-up’ budget in the light of a “business slowdown.” The analyst claims it is “just plain good management” for chief information officers to trim the highest level of IT spending they committed to in 2007 by 10 % for 2008. Told that some commentators are worried contract recruitment will slump now and last well into next year, due to economic jitters, one management expert sympathised . “They are quite correct to be,” said Phil Virgo, strategic advisor to the Institute for the Management of Information Systems. “It looks as though markets have fallen over a cliff although I understand that network security skills are still in strong demand - especially for those willing to travel.” Many observers also believe the (UK) public sector will cut its intake of IT contractors, says Colin Etheridge, spokesperson for IT recruiter Square One Resource Ltd. “But this should be more than compensated by the effect of the Olympic [Games in 2012] project and the fact that many public sector programmes can't simply be turned off,” he said. Going forward, he predicts a “little nervousness” in the Financial sector – banking and potentially insurance clients – as to the sustainability of demand for IT contractors. Yet “given the high ongoing levels of demand for permanent [IT] staff driven by the shortage of key skills I do not believe the outlook is bleak [for contractors],” Mr Etheridge, a member of the Recruitment and Employment Confederation's IT & Communications sector group, said yesterday. He added: “There will certainly be pockets of reduced activity and demand but the continuing need for highly skilled and effective IT and ERP consultants will remain strong throughout this year and beyond. “Key strategic ERP projects will continue to receive investment so demand for SAP, Oracle Applications and PeopleSoft professionals will remain robust, as will the need for those able to port such applications to users.” IT recruiters at Spring Technology agreed, saying SAP and Oracle are currently among the most sought-after skills, as are C#, Java and .NET. Although the agency said recruitment activity is now settling down, as a part of the traditional quiet run-up to Christmas, November has been a strong month within the IT contract market, with numerous roles in demand. These include, project managers; project co-ordinators, business analysts, analyst programmers, developers, technical architects, data analysts, as well as roles in security and business intelligence. Spring reflected: “Whilst the US banking crisis and ‘credit crunch’ will affect the wider UK economy, there is limited visibility as to the extent of its actual impact and its specific relationship with the UK IT recruitment market. As a result, we are cautious about 2008 whilst remaining fairly optimistic.” Nov 15, 2007 Email this article Printer friendly page Previous Page
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