Brexit uncertainty boosted IT contractors in September

The age-old favouring of temp hires over full-time hires if uncertainty hits came to IT contractors’ rescue in September, as the looming Brexit deadline saw their demand notch up.

In fact, returning to ‘the black’ having slipped into ‘the red’ in August, growth in demand for IT skills on a temporary, contract and freelance basis last month recovered to 51.3.

The reading by the Recruitment & Employment Confederation shows just much “Brexit deadlock” is constraining such growth, given that last September it stood much higher; 59.6.

'Delay to hiring and projects'

So “ongoing Brexit uncertainty” led many hirers last month to delay both projects and hiring decisions, the REC added in its Report on Jobs, which is co-authored by KPMG.

The professional services firm’s James Stewart said that, on the ground, it means hirers are “stuck” because they cannot make informed decisions, and workers are unwilling to move.

Reflecting on what he described as a “Brexit impasse,” the KPMG vice-chair added:

“Given that it’s the weakest increase in job vacancies since 2012 and the longest period that permanent staff appointments have fallen since the global financial crisis, it would seem that it’s proving difficult for businesses to shake off the heightened uncertainty and unknowns.”

'Helping employers manage'

However growth in demand for IT contractors recovering from August – when it was at 49.9 (a score last seen recurring during the financial crisis), has not gone unnoticed by confederation chairman Neil Carberry.

“[The] vibrant temporary work market is playing an important role in helping employers to manage the ongoing uncertainty”, he said, pointing to the September dataset.

“Businesses are positive about their own prospects, but…there are deeper issues which must be addressed to secure the UK’s future prosperity. Productivity is falling, and there are skills shortages in vital sectors”.

'Short supply'

In Computing, shortages are sharpest for Java, general IT/Technology and Developer candidates, as these four specialisms were in "short supply" last month on both a permanent and contract basis.

Also for temporary contracts, there is a shortage of C# and CNC contractors, in addition to a scarcity of full-time applicants for it contract jobs requiring Analysis, Automating Testing, Cyber Security, CAD, Data, Digital, Scala, Software and Technical skills.

However, even if the market were to throw up candidates in all 15 areas of IT which the REC member agencies reported as undersupplied, there is no guarantee they would be snapped up.

Mr Stewart said: “With the [October 31st] deadline fast-approaching, they [employers] may well be waiting to get clarity on the future direction of Brexit before making any key decisions on hiring and investment.”

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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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