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| CURRENT SECTION :: Market Reports | UK's most visited IT Contractor Site - 250k unique visitors March 2008 |
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The leap in contract rates through the first quarter of 2008 was a stark but positive contradiction to general tales of economic woe. But, the end of spring offers a bite of reality, as average rates fall back by almost a quarter. In the March market report we found an average contract rate across the ten most commonly requested IT contract skills of £39.44 per hour. In the last three months, that has fallen to £30.77. But, there are two limited pieces of good news; the £30.77 figure remains up (fractionally) on the average of £30.36 reported in January, and the March numbers were skewed upwards by a surge in demand for SAP consultants (with an average rate there of £82.63). In March, ‘SAP consultant’ figured in 6% of the more than 100,000 job adverts analysed. This month, it doesn’t figure in the top ten at all, with its place taken by ‘support analyst’, which averages £18.22. While this calms the drama of the drop, it doesn’t completely eradicate the bad news. Of the remaining nine jobs, seven have seen a dip in rates. Architects and .NET developers saw a small climb. The most alarming tumble is that of business analysts, who have seen their rate go from £39.10 to £29.88. The severity of the drop is concerning, but the fact that it is BAs – the people that assess the feasibility of new projects - that are seeing demand tumble is even more worrying. The other group to suffer a big drop was Java developers (another group to take an early role in the development cycle) whose rates went from £45.62 to £35.89. The fact that these two disciplines face falling demand suggests that firms are not starting new jobs, and that tough times may be ahead for everyone. For some, of course, the trouble has started already. Barclays Capital announced a straight 10% in contractor rates in May, and credit checking agency Experian recently predicted that 10,000 city jobs will go in the next three years. Lloyds TSB has begun already, with the announcement that 200 IT Contractors and 250 employees will go from its IT department. And the bad news is predicted to continue. IT firm SSL has released its own figures suggesting that the number of finance jobs for contractors has fallen by 16%. This is the biggest drop in demand noted by the firm since 2001. The gloomy news is supported by figures from recruiters ReThink. Its figures claim that IT jobs created by the banks fell to 13,351 last year, down 18% from 16,185 in 2006. And, it seems unlikely that the bad news will be restricted to the City. According to giant group, long-term joblessness among IT contractors overall has reached 5.5% this month, after falling to a two-year low of 4.4% at the end of 2007. All in all, it’s a pretty glum state of affairs. But, there are some (small) reasons to be cheerful. Matthew Brown, MD at giant, suggests that, ‘while we are seeing a rise in joblessness among IT contractors, most financial organisations have managed their contractor resource much more efficiently since the last downturn, so IT departments have far less fat to trim than in 2001-02. Unlike the dotcom boom there is no sense that the economy is overstaffed with IT workers. They are working pretty much at capacity.’ He goes on to say that, ‘in some areas demand for IT skills is actually rising in the City. Risk management and compliance are huge growth areas right now.’ His sentiments are echoed by ReThink MD Jon Butterfield. ‘Retail banks, in particular, are investing heavily in e-banking and bolstering internal systems to combat online fraud,’ he explains, ‘and a lot of work is going on to try and speed up the processes needed to achieve compliance with money laundering regulations.’ These crumbs of comfort may ease the worries of stressed contractors working in the City, but not by much. The positive areas mentioned by Butterfield and Brown will not be enough to eradicate the broader malaise. It is the types of jobs where rates are falling (BAs and developers, for example) that is the most worrying. If these rate drops spread to project managers and the like in the coming months, it could mean a tough year end for IT contrctors everywhere. But finally, a tiny snippet of cheer from recruitment firm Badenoch and Clark. In its Happiness at Work Index, 64% of IT contractors are confident about their job prospects, and just under a quarter are more confident about these prospects than they were last year. Matt Chester Data sources: Jun 4, 2008 Email this article Printer friendly page Previous Page
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