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The average rate for IT contract roles among the 10 most commonly requested job titles has fallen through the first three months of 2009, to £29.44 per hour. This is a drop of 7% on the £31.43 of late December. While any drop is bad news, the relative steadiness of the decline should offer some comfort, given the prophets of doom, woe and disaster that have been so regularly heard of late. The world’s institutions are not returning to the abacus and the quill just yet. Yet, before we get to the good news (and there is a little to come), we must consider the bad. It will surprise no one that the worst hit area for IT contract roles is banking and finance. In late December, CUK reported that the number of contract roles advertised online had fallen from 16,121 to 9,500 over the 12 months to the end of last year. A rather disconcerting decline has seen another third of IT contractor jobs go in this field in the first quarter of last month, with just 6,271 currently advertised. Grim news, but thoroughly expected given the way the City is currently hurting. Though, it’s a cloud that has a silver lining – the average hourly rate has edged up slightly, from £24.09 in December, to £26.71 today. The most logical conclusion is that mid to junior level contractors are going, while the more senior minds are being seen as too valuable to lose. Broader signs, however, are more consistently negative. Research sent to CUK last month by IT consultancy Morse found that 53% of IT directors felt they overpay for IT contractors. As Mike Devlin, a director at Morse noted, "this expense comes at a time when many businesses need to make the most of every penny." But, while IT directors may want to swing the axe, a healthy chunk (46%) who would prefer to have more permanent staff can't afford to do so because they need to spend money on contractors. As Devlin noted: "Employing contractors can still enable organisations to fill skills gaps quickly". The axe may be brandished, but contractors still provide business critical services. Wider figures are more worrying. Each month, KPMG and the Recruitment and Employment Confederation survey 400 recruitment firms in the UK. The most recently available figures recorded a sharply reduced demand for staff (across all sectors) during February. It continues a trend seen through the first quarter of the year, and makes for grim reading. As Kevin Green, the REC’s chief executive noted, "it is clear that we have not yet hit the bottom of the jobs market with demand for staff continuing to contract". Mike Stevens at KPMG sounded equally worried, admitting, "We struggled to find any glimmer of hope in these figures but failed". A bleak outlook. And the IT specific numbers are among the worst. The survey uses 50 as its base index. Figures above 50 show an increase in demand, anything below shows a drop. This time last year, ‘IT & Computing’ contracting was at 58.5. Now, it is at 35.3. The only skill reported to be in short supply was CNC programming. CNC, or Configurable Network Computing is a JD Edwards client-server architecture. It is so rarely called for, that itjobswatch has zero vacancies advertised. A broader search for either JDE or JD Edwards brings a grand total of 72 jobs, from the more than 100,000 in the itjobswatch database. Admittedly, rates for these roles are in the £400+ per day category, but it’s unlikely to start a contracting surge nationwide. So what of those few rays of sunshine we promised? The dire state of the nation’s finances may yield some surprising positives for contractors. As the government tries to spend its way out of recession, the contracting gravy train of the public sector continues to offer hopeful glimmers. As was widely reported in early February, public sector IT spending is already wildly over budget (by more than £18bn, according to one estimate in The Times). While this will bring pressure for public sector IT managers to reduce costs, the recession is, in some ways, increasing demand for IT skills. A recent report for giant group found that the proportion of accountancy jobs to be found in the public sector has risen, from 34% to 37%, with 68% of accountancy contractors (in any sector) expecting their earnings to actually rise this year. As Matthew Brown, giant’s MD noted, "finance departments will play a frontline role in dealing with the impact of the credit crunch both in terms of managing cost cutting programmes and reshaping business plans". Wherever there is change, there is scope for IT contractors. One such example is in the new system for the payment of compensation from failed banks. The Financial Services Authority (FSA) recently set out proposals for speeding up payouts, estimating the cost of the new IT systems to be around £892m over five years. It suggests that financial IT contractors have at least some leverage in the future. Matt Farquharson Data sources: Apr 7, 2009 Email this article Printer friendly page Previous Page
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