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As this quarter’s market stats are filed to CUK, the sun is shining and the weather is sweet. It is a rare bright spot given the news that is to follow. While the past few quarterly reports have found notes of optimism, and rates dipping but not plunging, the market this time round has proved much less resilient. The average hourly rate across the ten most commonly requested contract roles has fallen to £25.94, down from £29.44 at the end of March, a tumble of 12%. It is particularly concerning given that poorly paid administrator roles (average rate £21.54 last quarter) have fallen out of the top ten, to be replaced by Java developers (current average £30). This masks a more serious overall decline. If we remove administrator roles from the March stats, and Java roles from the June stats, and keep the nine consistently most requested roles, the drop is from £30.31 to £25.48 – a fall of 16%. All nine roles that remained constant in the top ten have seen a drop in their average rates, with the most swingeing cuts affecting less technically hands-on roles. Project managers have seen rates go from £33.30 to £25.50 (down 23%), business analysts have dropped from £30.86 to 25.35 (down 18%), and architects have gone from £47.61 to £40 (down 16%). But those lower down the feeding chain have been hit just as harshly, with support analyst rates going from £17.84 to £13.50 (down 24%). It is bad news that will surprise few. The worrying headlines, mostly about the macro economy, have finally made a dramatic impact in real terms to contractor rates. News such as BT’s plans to cut 10,000 extra contract roles (following the 10,000 cut this year, and coming with the galling caveat that many would actually just be moved overseas) cannot continue without having an impact on real incomes. Further downward pressure on contractors’ pay is being exerted by companies, such as Lloyds Banking Group, which are importing less expensive IT contractors from abroad. In the face of replacements willing to work for fewer gold coins, typically half as many, UK-based IT contractors have much less room to wiggle out of earning less for doing the same. Little wonder, then, that increasingly anxious from the lack of opportunities, IT contractors looking at work in all major sectors are lashing out at recruiters, according to a survey by the REC. But there is some hope for jobbing contractors. According to APSCo (formerly the Association of Technology Staffing Companies - ATSCo), the very people who are suffering most this quarter have grounds for hope through this recession. APSCo’s argument is that while the technical roles are being outsourced, remote management remains in the UK, bringing demand for a new skill set from PMs. And iProfile’s CEO, Rick Bacon, has noted the same, claiming that, "the sophisticated project management jobs remain firmly rooted on UK soil. Senior level IT professionals need to remain in the UK so that they are close to their clients”. But, he notes, “We're seeing increasing competition for these positions." There is some further encouragement from giant group, and its findings about long-term unemployment for contractors. Five years ago, at the extreme tail end of the dotcom crash, it found that 13% of IT contractors had been out of work for 90 days or more. The firm’s most recent survey found that just 7.5% of IT contactors have been out of work for 90 days or more. Matthew Brown, the firm’s managing director, reckons that contractors are, “still faring far better than they were following the dot-com crash. IT departments were pared to the bone in 2001/02 and have been cautious about vanity projects ever since. This means that IT departments are much leaner going into the current downturn and IT directors have far less fat to trim.” But in financial circles, there are suggestions that IT departments were more generously staffed than many executives thought on sight of the recession, which officially started in January. This helps explain some of the recent bloodletting and willingness to present contractors with ‘take it or leave it’ pay ultimatums. Yet there is reassurance, Giant hinted, from the public sector, as it “is usually much less volatile during a recession than the private sector”. Mr Brown also points out that, “for the short term at least, projects are likely to continue as planned, as funding for them has already been earmarked.” Of course since his comments, cuts in public spending – that new political football, have been warned of as incoming by the Bank of England, no matter which political party is in power. At the time of writing, reports claimed to have found the first victim: following a review by the Home Secretary Alan Johnson, the compulsory national identity card scheme is to be abandoned. The death of the compulsory scheme, irregardless of its rights and wrongs, would represent a further pinch to the work of public sector IT contractors – one-person companies and major suppliers alike. However there is some faint succour from an overview of the jobs market, amid news from the REC/KPMG monthly jobs report that the decline in temporary placements has slowed to its least damaging in the last eight months. REC’S CEO Kevin Green also said that “sixty per cent of recruiters reported either a stable or increased demand for temporary staff in May”. Mike Stevens of KPMG went further, saying: “There is now some reason to hope that the UK jobs market has overcome the worst, at least for this phase of the recession. For the third successive month we have seen a slowing in the rate of decline in both temporary and permanent staff appointments”. The jobs they’re discussing may come from across the economy, but some are IT, and it is one tiny crumb of comfort for the future. There is never a good time for a contractor to be out of work. But in these harsh times of adjusted expectations, the summer months are better than most, despite the sun shining during the week, but rarely reaching the weekend. Matt Farquharson Data sources: Jul 1, 2009 Email this article Printer friendly page Previous Page
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