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| CURRENT SECTION :: Market Reports | UK's most visited IT Contractor Site - 250k unique visitors March 2008 |
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In December last year, we noted an unfortunate tumble in contractor rates. They had slipped nearly 10% over the previous three months. There was some hope, however, that bigger economic uncertainties may actually help contract rates. The theory was that permies and contractors alike would be less willing to switch jobs, meaning employers needed to pay more to get people moving. In part, this may have contributed to a healthy rise in rates over the winter months. Hourly pay for the ten most commonly requested contract roles has leapt from £30.36 in December to £39.44 today. This is a staggering rise of 30%. But, before contractors go to their bosses and demand a third more money, there are some caveats. This figure has been skewed somewhat by the re-emergence of architects (averaging £38.36 per hour) and SAP consultants (on a hefty £82.63) in the top ten. They enter at the expense of support analysts (£18.55) and C# developers (£34.29). But, the upward movement is still encouraging. Eight of the top ten remained the same over winter, and of these, six have seen rates increase. Only .NET developers (from £33.44 to £ 31.90) and the generic ‘analysts’ (£20.25 to £20.14) have gone the wrong way. Perhaps most encouraging news is that business analysts (£31.05 to £39.10) and project managers (£36.79 to £39.78) have seen the healthiest growth. The former group tends to be the first hired when a firm looks at the viability of new projects; the second group then leads the work. An upsurge in their rates is good news for contractors as a whole. It is also a pleasant contradiction to a recent report (covered by Contractor UK here) suggesting that ‘fees charged by top consultants have dipped by as much as £300 per day’. The boom in rates for SAP contractors, from £68 to £82.63 over three months (a rise of more than 22%) is in stark contrast to static Oracle rates. A big year was expected for Oracle, after strong profits in 2007. However, the popularity of the firm’s products has not yet translated into booming demand for contractors. In fact, rates have dropped fractionally over the last year, from £35.61 to £36. This would appear to contradict all the talk about Oracle rates taking off in 2008 as firms get to grips with PeopleSoft and Oracle changeovers. It is possible that because Oracle has been doing so well for so long, it has attracted enough new contractors to keep supply in line with demand, and rates static. Further contradictions can be found in the finance industry. In the same month that the headhunting outfit Heidrick & Struggles released figures suggesting that investment banks have globally cut IT staff by 5% to 20%, ATSCo reported an 11% rise in pay for contractors in the finance industry over the last six months. But, it’s a rise that was needed, following previous dips. If viewed over 12 months, hourly rates for contractors in finance have actually fallen by almost 11%, from £30 to £26.68. In effect, the surge over the last six month has just got things back to their position of a year ago. The recent good news may come as a surprise to those expecting gloom from the money men hit by credit crunches and sub-prime debt write-offs. But Ann Swain, ATSCo’s chief executive, suggests that this uncertainty may even aid contract rates. ‘Banks,’ she says, ‘may look to mitigate employment costs by putting a freeze on permanent hires, which often creates more opportunities for contract workers.’ But this is unlikely to continue. Contractors may fill temporary gaps, but if money is being withdrawn from IT budgets, they’re likely to feel the pinch eventually. Only longer term investments are likely to keep contractors in clover over the coming 12 to 18 months, but Swain offers some hope here too. ‘Retail banks are continuing to spend on e-banking and web security at a healthy rate,’ she says, ‘and regulatory spending on compliance is already feeding through to demand for IT skills in the insurance sector.’ There is some comfort for those in investment banks too, with Swain claiming that, ‘strong demand for IT skills in areas such as equities and commodities trading is helping to pick up some of the slack on the credit side.’ Her positivity is supported by Matthew Brown, the MD of recruiters Giant. ‘Despite the expected fall-out post-credit crunch,’ he says, ‘contractors are not expecting a wider economic malaise – or at least one that will impact them significantly.’ His firm has done research that suggests three quarters of contractors expect to see their income rise this year. He also agrees with Swain on the potential for contractors to do well from broader economic troubles. ‘There is often an upswing in demand for temporary workers during challenging economic conditions as organisations put off hiring permanent staff,’ he says. ‘So, if there is a short downturn and the market picks up again in 2009, contractors could actually do reasonably well.’ While these are worrying economic times, and we’re finding contradictory evidence about what the next few months may hold, there remain reasons to be cheerful, beyond improvements in the weather. Matt Farquharson Data sources: Mar 5, 2008 Email this article Printer friendly page Previous Page
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