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The number of IT contractors going without work for at least 12 weeks has risen for the first time to its highest level for three years. Figures from Giant group show such ‘long-term joblessness’ among IT contractors rose this month to 5.5%, up from a two-year low of 4.4% in 2007. A knee-jerk reaction to the credit crunch was to blame, as clients, particularly banks, froze non-essential IT spending and put contract renewals on hold. But the group also said that the number of contractors ‘sitting on the bench’ remains “very low”, at a time when skill shortages continue to pressure associated pay rates upward. IT departments are also much more sparsely staffed now than they were between 2000 and 2002, the time of the last market crash, meaning they have “far less fat to trim”. And while the credit crunch was always predicted to make some clients a 'little nervous,' experts were also right to tell CUK that its root cause would actually enrich some contractors. “Risk management and compliance are huge growth areas right now,” Matthew Brown, the managing director of Giant said yesterday. “If anything the credit crisis and the Société Générale scandal will accelerate this process, rather than lead to curbs on spending.” Moreover, he said, most financial organisations have managed their contractor resource much more efficiently since the last downturn after the 9/11 terrorist attacks. Therefore unlike the days of the dot com boom, there is no sense that the economy is overstaffed with IT workers. Most organisations, Giant said, are “working pretty much at capacity.” Contractors seem to realise this: the number expecting their earnings to rise has increased, albeit marginally, from 71.7% of the group’s sample in late 2007, to 73.9% this month. “For contractors in work, the tight supply of skills is still playing a significant role in keeping the pressure on pay, though if joblessness continues to rise, expectations for pay rises are likely to be tempered,” Mr Brown said. Though contractors aren’t being complacent about the economic woes, rather, he hinted, they are merely adapting to the conditions. “Job security is now becoming much more of an issue with economic uncertainty on the rise. “Contractors may feel less confident taking on work in volatile areas of the banking sector as a result, but contractors are still some way off being as concerned about job security as they were during the downturn in 2001-02.” Mar 28, 2008 Email this article Printer friendly page Previous Page
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