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The financial services sector will weather the economic storm for IT contractors over the next 12 months by creating more jobs for them than any other industry. Research from Giant group reveals that although contractors’ confidence in the most IT-rich sector has softened, they believe it will still be their dominant client by 2009. A tighter management by financers of their IT staff also makes contractors think that any contractor lay-offs will be far fewer than those seen in the last major downturn. This more restrained IT hiring stance since the dot-com bust, coupled with offshore outsourcing, has thinned out corporate IT departments, “leaving less fat to trim.” “What we are seeing is a fairly measured response to the downturn,” Giant added in a statement yesterday. “Some IT projects which will not yield a short-term return on investment are being given lower priority, but the market hasn’t fallen off a cliff by any means.” Group director Matthew Brown said that, historically, economic uncertainty has played into the hands of IT contractors, who are easier to dismiss than permanent employees if conditions worsen. Nick Hardisty, managing director of Inspired Recruitment, an IT jobs agency, said that he could not foresee any economic circumstances that would make contractors quit. "Temps are, as a rule from our experience, not too concerned with risk and would possibly see the downturn as an opportunity to increase their work pipeline," he told CUK. “Large organisations [will] strip the ‘perm’ workforce down, reduce fixed overheads, and look to opt for more project based or ad-hoc staffing solutions, [like] using staff as and when required, in this case potentially contractors.” But the optimism was tempered by Giant’s research, showing that the number of contractors who expect pay rises over the next 12 months has fallen, albeit by only a “shallow” margin. “There is no sign of panic among contractors,” Mr Brown said, explaining how contractors reacted to jitters in financial services, their biggest commercial client. “Sentiment is on the wane, but few are expecting a repeat of the mass bloodletting we saw in the 2001/02 downturn.” Less confidence explains why more contractors want stability before cash; 56.9% of contractors would now prefer a longer term contract compared to 50.5% last year. “The general trend in [contractor] joblessness has been upwards,” Mr Brown reflected. “But the proportion of contractors out of work long-term (3 months or more) has remained relatively static at around 4% over the last year. “To put this in perspective, 13% of contractors were jobless for three months or more in 2003, so the market is still in reasonable shape.” Giant's research found 16% of IT contractors expected telecoms to create the most jobs over the next 12 months, up from 9.7% a year ago, compared to 24% citing financial services, down from 26% a year ago. Jul 1, 2008 Email this article Printer friendly page Previous Page
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