CUK IT contractors get their say on 2010
The slow economic recovery proved a bigger hindrance to the UK’s freelance IT workers in the last 12 months than more traditional obstacles to IT contracting, such as IR35.
Voting in a wide-ranging poll on the best and worst of a year’s IT contracting, ContractorUK readers said the “on-off recovery” of 2010 was a heftier burden than tax or compliance issues.
Government cuts to services, jobs and contracts in the public sector, including their impact on pockets of the private sector, were partly to blame, the CUK poll shows.
Growth in the offshoring of IT jobs and intra-company transfers, combined with higher road and rail costs, haven't helped the recovery either, the contractors said, let alone their own profit margins.
“The upshot has been a much more competitive marketplace,” said one. “Fewer projects in the market and clients nervous to invest... if they do still hire contractors at all”.
This assessment might come as news to 65% of the sample – the clear majority of CUK readers – who were on-contract for three quarters of 2010, or for longer; “boomed.”
Time in work was a non-award question in the poll, but the finding is important as it indicates that IT contractor joblessness is up on 2009, when 75% had work for three quarters or more.
Then, the “recession” or “downturn” was the biggest hindrance to IT contractors, whereas now it is the “recovery” - albeit criticised as “slow” and “inconsistent.”
This implied improvement in overall conditions is yet to trickle down to IT contractor pay, with a greater chunk of the sample this year reporting lower rates or being undercut.
Explanations given included budget constraints at the end-user organisation, an influx of non-EU (and EU) workers, as well as downward pay pressure from cheaper, offshore forces.
All three of these obstacles to daily rates recovering point to decisions from the client-side, but it was contractors’ recruitment agents that came in for the most criticism.
“Agencies have performed badly this year, seeming more interested in placing anybody to earn some commission than with quality of matching,” one contractor wrote in the poll.
Other agents were just “unhelpful,” by playing candidate against client or, as another contractor put it, were merely “sat pretty on their haunches” rather than working for their fee.
Criticisms of clients, where they were issued, centred on them being reluctant to commit to change, 'hiring for roles they know they will eventually cancel', or imposing shorter contracts.
More contractors than in either of the two previous CUK readers’ awards polls also had gripes upon arriving on-site, with project delays arising from a “lack of strategy,” cost-saving analysis or ‘improvements.’
This may help explain why there is no CUK award for Best Client of 2010 because, while nominations were invited as normal, a winner - in terms of votes received - did not emerge.
Still, commended for treating their contractors well were some high-profile financial services companies – Co-Op Financial Services, RBS, and the Lloyds Banking Group including HBoS.
To this end, it appears the finance sector may have been the best client for IT contractors in 2010, yet they also gave a thumbs-up to BT, the Ministry of Defence and a few NHS care trusts.
According to the poll’s comment section, what unites many of these outfits is their willingness to treat their contractors like "valued" members of the workforce, not external add-ons.
Although potentially problematic in the event of IR35 investigation, such care and consideration was also appreciated when contractors came to vote for best agency, best umbrella and best accountant.
Best Agency of 2010
Always has lots of contracts
Support and help continues until the contract is secure
Regular feedback, pro-active, quality matching
RUNNER UP: Computer People
Repeat and back-to-back contracts
Easy agency to work with
Consistent approach from agents
RUNNER UP: Hays
Pro-active, particularly on payment
Smoothly sorts UK placements for UK candidates even if they are already engaged overseas
Good communication from agents
Regular agent feedback
Valuable pre-start date support, including interview aid
Reliable at contract renewal/extension stage
Best Umbrella Company of 2010
WINNER! Giant group
Personal and efficient service, clear communication, ease-of-use online
Consistently professional approach to answering queries and solving issues
Sound understanding of contracting
RUNNER UP: Contractor Umbrella
Always reliable, available and personable
Makes the work and payment process easy to understand
Comprehensive knowledge from support staff
RUNNER UP: Parasol
Excellent service, always paid on time
Best Accountant of 2010
WINNER! SJD Accountancy
Excellent understanding of contractors and their needs
Friendly, professional and informative about tax and HMRC
Rapidly and thoroughly deals with questions or complicated queries
RUNNER UP: Churchill Knight
Exemplary customer service
Flexible and patient in adapting to particular needs
Pro-active approach to tax affairs and communicating
RUNNER UP: Plan IT
Good marketplace presence
Reliable and responsive staff
Proven understanding of contractors’ tax affairs
Biggest new challenge to IT contracting (in 2011)
WINNER! UK economy
RUNNER UP: Public sector spending cuts
RUNNER UP: The review and proposed replacement of IR35 (by the Office of Tax Simplification)
Best thread on the CUK forum/Bulletin Board of 2010
RUNNER UP: BN66 - Round 2 (Court of Appeal)
Best CUK forum personality of 2010
WINNER! Malvolio (Ed: Again!)