Choked by regulation? Contractors, your rates weren’t

Even us recruitment captains have noticed that contractors have spent much of the year firing broadsides at regulation, whether it’s the 2019 Loan Charge or IR35 reform, writes Natalie Bowers, co-founder of niche staffing consultancy Bowers Partnership.

Before I dare to suggest that regulation is not always s ‘a bad thing’ for contractors, it’s worth pointing out that the still relatively far-off changes to IR35 in the private sector are not currently affecting what we’ve seen over this last quarter in the professional contract market.

In fact, our latest intel indicates that the October and early November lull for IT contractors was more closely aligned to the continued uncertainty around Britain’s exit from the EU, not proposed IR35 reform from April 2020.

You’ve probably earned off regulation

Let’s not forget -- and it often is forgotten amid all the lobbying against new laws, that the market and the demand for top-rate tech contractors has been significantly propped up by mandatory regulatory projects. Ever since 2016 in fact. There’s MiFID in the background, and GDPR is still firmly in the foreground today.

Well, in the absence of yet another big new regulation knocking on our doors (NB, nobody can even have more than an educated guess about the precise ‘nuts and bolts’ that the private sector IR35 framework will contain), IT departments are taking a well-earned breather.  In the main, they are adopting a ‘wait and see’ approach to project planning and spending commitments for 2019. This is hardly surprising.

Don’t dither

But don’t let the hiatus from the regulatory respite lull you into a false sense of security. Those of you contractors who are contemplating a jump back (or into) into the world of permanent work might want to investigate sooner rather than later. The gap between daily rate and total compensation (pensions, statutory benefits etc) has never been smaller, and once you factor in the IR35 rule changes of April 2020, you may find that ‘the dark side’ becomes a less gloomy option, in financial terms. So out of those of you who are asking us now, we are recommending contractors not to delay looking at their options with nine-to-fives, or at least -- don’t leave any decision to jump for too long, otherwise you might get trampled in the rush.

SCD - Seasonal (Contractor) Disorder

Acting now is difficult advice to ‘sell’ at this time of year. Let’s face it, who isn’t busy with life in general in the run-up to Christmas? With more time browsing for presents taking over from thumbing through the job board pages, it’s hard to get motivated and even harder to find the time to be bothered searching for that new contract.

For many IT contractors, it’s currently a case of ‘why do today what you can put off until January’?! Even the most industrious contractors know that many agencies will finish on or around December 21st, and the vast majority of client sites have a furlough at the same time.

So yes, this is the one time of year when it feels entirely legitimate to take one’s foot off the contract-searching gas. The job boards tell us that this is a very normal pattern and that they always see a slump in applications between November and the end of December.

Out with the old…

What for the New Year though? Well, we predict 2019 will see a strong continued push for digitisation and all things client-facing. So User Experience, Client Engagement and Client Journey are sure to be the ‘buzzwords’ of the coming 12 months. This will come as great news for contract Web Developers, Digital Business Analysts and Business Change Project Managers, because clients will be looking for a step-change in their Digital and Web-based business models. Testers who work freelance are also sure to benefit from the client-centric projects that are surely set to dominate next year too. It might not be comparable in terms of the rates paid out for these specialisms, but many will see these skillsets taking over as a welcome change from the last three years when regulation was king. And yes, that period paid royally, but a changing of the skills-guard is all but upon us.

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Written by Natalie Bowers

Natalie is a co-founder of Bowers Partnership, an award-winning recruitment company that finds people for Investment Management, Wealth Management and Lloyd’s London Markets clients.
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