December saw IT contractors’ prospects improve, just

A drop-off in IT contractor placements chalked up another month-on-month reduction in December 2018, despite still being stark, a UK staffing body has shown.

In fact, far from a severely ‘in the red’ reading of minus-38% (recorded in the first quarter of last year), IT contractor placements fell by a lesser 17% in the festive month, found APSCo.

The negative score signals a tiny improvement on November 2018 -- when flexible IT placements were down by a larger 21%, while IT contractor demand was 5.6%, versus 5.8% in December.

Likely to be unnoticed by IT contractors ‘on the ground,’ the miniscule uptick in demand is at odds with what permanent IT job-seekers are experiencing, however, in terms of appetite.

Demand via APSCo-member agencies in December for IT staff on a full-time basis went into reverse -- 0.1%, defying a three per cent increase in permanent job placements overall.

But with IT placements for such full-timers surging last month by 25% (compared to --17% for contractors), the negative demand is only likely to frustrate those techies who are actually looking for a 9-to-5.

Even this seemingly strong figure -- a quarter increase in full-time IT placements -- requires context though, the Association of Professional Staffing Companies (APSCo) suggested.

It is because it actually represents an annual weakening in the strength of the permanent IT sector, with the subtext being that IR35-inspired hiring has potentially lost its momentum.  

So whereas previously APSCo said IR35 reform was responsible for adversely affecting just the IT contractor market (it has blamed both the public and proposed private sector off-payroll rules for the stark drop in temporary IT placements), now its member agencies are witnessing its impact on the permanent IT market too.

“When compared to November 2018, the number of permanent placements within the [technology] sector dipped by 5%,” the association said, referring to December 2018. “[This dip is] indicating that the flurry of hiring activity we have witnessed in the run up to IR35 roll-out in the private sector may now be slowing.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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