IT contractors more upbeat than agents

They may be improving gradually, but trading conditions for two leading IT recruitment businesses are still yet to fully recover to pre-downturn levels.

In its latest market update, SThree said a number of new, sizeable IT projects being signed off was not enough to rebound IT hiring to where it was before the slowdown.

A similar take came days before from Hays, whose fees from IT staff and contractors have sunk since 2009, in spite of "major IT projects" going live in 2010's first half.

The recruiter explained that such projects were now complete, forcing their focus to switch from labour towards the objectives and "productivity/efficiency" gains.

This change may help explain why, across most of its geographies, Hays' permanent placement unit is recovering more rapidly than its temporary placement unit.

However positively for contractors, the IT group said net fee income from temporary workers was more resilient through the downturn than it was from full-time staff.

Contractors in IT, particularly those in financial services, do appear to have noticed that their daily or weekly pay rates have fared better, or dipped less, than they had feared, new research suggests.

In fact, 63% of IT contractors polled in August said they expected their earnings to rise over the next year, up from 58% against the same second quarter period in 2009.

Although only marginal, the increase was seen as evidence that contractors are more optimistic on pay, as well as less pessimistic - as fewer foresaw rate reductions.

The brighter prospects for contractors coincide with their faith returning in financial services as the engine of IT job creation, said Giant, the firm behind these findings.

When it asked which sector would generate the most work, the largest chunk of IT contractors (30%) said the financial services industry - a vote of confidence not seen since its crisis started.

"Financial services businesses are adapting their front office systems to the realities of the post-credit crunch world," said Giant's managing director Matthew Brown.

"They are facing huge regulatory pressure to make transactions more transparent and improve risk monitoring."

Although a few major financial institutions have recently cut IT jobs in their middle and back-offices, Brown claimed that the layoffs seemed "to be against the broader trend."

"Banks and other financial institutions are investing heavily to integrate IT systems following the wave of mergers precipitated by the financial crisis," he added.

"The purpose of these projects is to achieve cost savings, so these are projects banks are keen to push ahead with in the expectation of a fairly substantial return".

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