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In the current economic climate, the pay rate is now the single biggest factor a client will scrutinise when considering a contractor for straightforward IT work. Nowadays, the extent to which skills and experience for single process IT work are factored in varies by client, says Matt Smith, a director at Harvey Nash, an IT services and staffing firm. During tough business conditions, he said that the shrewdest IT contractors will freshen up their skills, update their training and move their pay rates in line with the market. Recruitment agents at Just IT said freelance contractors are, in fact, being more realistic with their take-home pay, by showing more flexibility when fixing their hourly rates. If they don’t set “open, honest and reasonable” prices, contractors may lose out, particularly if their skills become more available, said Inspired Recruitment, another IT jobs agency. Julia Bosworth, contract manager at Project Partners agreed, saying IT contractors must “be more flexible on rates and look at each project and assess what exactly it can offer them.” For Steve Pragnell, managing director of PM3, a project manager supplier, the daily pay rate charged by a freelance computer expert remains their “primary weapon in the bad times.” “Domain experience is extremely important,” he said, “qualifications add a little weight, but ultimately the first criterion clients are judging CVs by right now, is rate.” In 2008, the opposite has been true in the IT consulting sector, says the think-tank behind the Management Consultancies Association, which covers 70% of the consulting industry. “In this atmosphere of uncertainty, there seems to have been a ‘flight to quality’ in the consulting market, with clients saying that, if a project is worth doing, then it's worth doing well,” said the director of the think-tank Fiona Czerniawska. Demand for big-name IT consultancies will therefore rise and in their ranks, IT “contractors are likely to find demand for their services strong”, particularly if full-time hires remain unappealing. But Just IT is yet to see this jump in demand: compared to this time last year, the number of IT contracts on its database has declined, said its managing director Sunil Duggal. He explained that the main reason IT contractors reported pay cuts or worse; termination, was that they “no longer offer value for money to their employer.” Addressing IT contractors, he advised: “Keep an eye on your impact on the [client’s] bottom line; if it’s not clear what [positive] impact you make, then worry.” Like IT recruiter Harvey Nash, PM3 said cuts to pay rates are an opportunity for accepting contractors to push for more favourable terms, like a longer placement. “I would seek a longer notice period so that if/when the employer does this [cuts pay] again I would have a greater amount of time to react,” Mr Pragnell advised. “I would also ask for a longer contract to help cover the cost of the [rate] reduction.” The decision of whether contractors should fight pay cuts, by accepting them but only on condition of better contractual terms, is down to each individual contractor’s attitude to “risk”, Mr Smith said. However, other than freelance techies working for clients directly exposed to the credit crunch, such as City banks, most IT contractors are yet to be faced with such a decision. Across the regions, Harvey Nash has not seen any downturn in the IT staffing market – there has been no obvious fall in demand for general computer skills or specialisms. Nick Hardisty, managing director of Inspired Recruitment, reflected on the growing consensus that the IT contractor jobs market is holding up outside of core financial services areas. “Certain sectors and skills will now be offering further opportunities to IT contractors than when the market was, supposedly, more buoyant and permanent staff were affordable as costs were less of a concern,” he said. “In addition, with competition and pricing now becoming more competitive, a flexible workforce is a better means to tighter costing and therefore pricing to end users.” Hardisty said such a workforce is being sought in sectors where clients “work on a project basis and where the contract workers are used [according to] fluctuations in the availability of work,” such as Defence. The Association of Technology Staffing Companies said that, in the private sector, CRM and business intelligence areas were thriving, as clients try to get more business from existing customers and want smarter intelligence to help win new ones. “Contracting is busier than ‘perm’ due to the uncertainty in the [recruitment] market and reluctance of employers to make long-term commitments,” Marilyn Davidson, a director of ATSCo said yesterday. As corporate IT networks continue to need support, infrastructure and support roles are resilient to any downturn, added Just IT, which also reported higher demand for Sharepoint contractors. But Ms Davidson reflected: “Some of the banks imposing cuts in contractor rates are forcing contractors to seek assignments elsewhere, partly because of the financial impact but also because of the way this has been handled by the banks.” Financial IT contractors who quit their contracts appear to have fallen on their feet, and without needing to walk too far, Project Partners suggested. “Within investment banking, key specialist systems knowledge including Sophis, Openlink, Murex, Calypso, Summit and Fidessais [are] thriving as demand outstrips supply,” Ms Bosworth said. “Client projects tend to run simultaneously and therefore banks compete for the scarce skills needed to implement their systems. Due to the nature of the projects, which can run on average for 18 months to 3 years, clients seek contract/interim candidates rather than hire someone on a permanent basis.” Among asset management clients, the agency said Charles River, Latent Zero, Simcorp Dimension and Sophis contract skills are in high demand, as banks try to outbid each other. It added: “Clients want the best contract people in the market who possess these specialist skills to work on 18 months to 3 years projects to transform their business. “In the wake of sub prime and to prevent another Société Générale incident, finance specialists, risk specialists, product control specialists and change process reengineering consultants are also in high demand. Banks need to hire these contractors to work on various projects to ensure that they are protected from future risk.” In line with this assessment of the hottest IT skills, Harvey Nash said sought-after contractors are those who can act “as an interface between the business and IT” departments. The IT group said that the contractors most resilient to any recruitment slowdown would be those with a “robust network of business colleagues, and recruitment agents.” “Right across Harvey Nash, from infrastructure, to development to knowledge-based IT roles, there are some contractors who immediately spring to mind. If a client demanded an infrastructure programme manager, I’ve got about five people I think off immediately,” Mr Smith said. According to an audit of the knowledge-based contract IT roles Harvey Nash placed in 2007, more than 70% went to candidates the agency knew well from face-to-face meetings. Despite price now being the ultimate determinant for straightforward IT work, like a .Net role, Mr Smith rated experience of contracting as a key factor in exerting upward pressure on pay. “In my experience as an IT contract recruiter, organisations were always nervous of taking on a [former] permanent employee for a contract role because they weren’t sure, culturally, how they would manage that,” he said. “One thing that helps contractors get a reasonably high level of remuneration, and stay in work; is how they act whilst they work for a recruiter’s client.” Mr Smith pointed out that contractors stand the best chance of winning a rate rise if they maintain their professionalism, gain the client’s proprietary knowledge and show themselves to be “invaluable.” ATSCo said that in the immediate future, it would be crucial that contractors ‘know their worth in the marketplace’ and make clients aware of their work achievements. “For permanent staff this comes up at appraisals and in management reporting but not so for contractors,” Ms Davidson explained. “[Contractors should also] accept that being a contractor carries risk and be prepared for these risks,” which can be mitigated by working “with reputable agencies.” Harvey Nash stressed that contractors want their IT jobs agencies to be efficient, as well as reputable. “Ninety per cent of the interim vacancies we have we are dealing specifically with the line managers [on the client site],” the IT group said. “This enables us to get a really clear understanding for the scale and scope of any role, and equally we’re able to talk to the hiring manager about the people we are forwarding. So it’s not all about the CV if the contractor is working with the right recruitment consultants.” Jul 2, 2008 Email this article Printer friendly page Previous Page
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