By Andy McCue, 17 February 2004 14:15
NEWS Demand and pay rates for UK IT contractors is on the up again, with unemployment falling and rates rising in some sectors for the first time in four years, according to new research.
The quarterly skills survey by the Association of Technology Staffing Companies (ATSCo) reveals that the City is one area showing signs of recovery, with IT freelancers in financial services companies seeing pay increases of two per cent in the last six months of 2003.
Unemployment fell by a third to 17 per cent and those working in technology companies saw their pay packets get fatter than most, with average pay rises of between six and nine per cent.
Ann Swain, CEO at ATSCo, said in a statement: "Financial services pay rates have lagged behind the upturn in other sectors, particularly government. It now seems as if we are seeing the first glimmer of recovery in the sector that fell the furthest in the stock market crash."
New financial regulatory requirements such as the Basel II Accord are driving demand again as firms begin to implement the necessary IT changes, according to ATSCo. Those benefiting most from this demand are datawarehouse architects, who have seen their pay rise 35 per cent from £40 to £54 per hour in the last six months.
In the tech sector itself, the report says the increase in technology company flotations is evidence of a thaw in the freeze on the financing of IT firms. The skill 'hot spots' in this sector in the last six months were IT freelancers in electronics, software development and aerospace, who saw pay rises of nine, six and five per cent respectively.
Swain is predicting that the upward trend for demand and contractor rates will continue throughout 2004.
"As contractor unemployment falls, wages should continue their upward trend as the pool of reserve labour dries up," she said. "IT departments now need to invest in infrastructure. The bottom line is the average corporate PC and its software is reaching the twilight of its useful life."
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Comments
There are 5 comments. Join the discussion
1. Brian Burkill
Whilst the recovery of the contractor market is welcome. It is simply too late for some.
Many, many contractors (including myself) were simply unable to ride out the storm and have gone to the wall, taking up permanent positions.
I do admit, I was left with a bitter taste in my mouth over contracting, as, although I enjoyed an excellent reputation, I never saw the 'big money' and it was always an uphill struggle getting past the agents and convincing them I could do the job, them preferring to go for the cheaper, less experienced contractors.
I simply could not hang on any longer. I lost my 4 bed detached house, my company, and all I had worked for for 25 years, due to market conditions and having to rely on agencies for my work. I am not bitter, what is gone is gone, but I shall never return to that method of working.
2. anonymous
After the harsh treatment of IT staff and IT contractors by the City firms in the 2000+ crash where contracts were not honoured, rates slashed mid-contract and loyalty returned with a hike out the door, City firms can expect a harder, more ruthless IT population who will return the favour with the same strongarm tactics now the the boot seems to be moving to the other foot. Whereas previously contractors honoured contracts and remained loyal, more often than not at the expense of better rates elsewhere, companies cannot complain if contractors now return the same harsh "market reality" arguments back at employers that these same employers used against contractors and IT staff when teh bubble burst.
3. Robert Styles
More reason to export jobs to India if contractors get too greedy.
4. Brian Burkill
What an excellent point made by Anonymous.
Contractors WILL remember those BIG firms who slashed their contractor rates (me included) with a take it or leave it attitude, issuing the acceptance or 30 day notice notification. They KNEW contractors would stay simply because the market was such that you were FORCED to stay where you were. They knew it, contractors knew it and the clients milked it.
Agencies also suffered as well, but they made it back by increased margins.
The boot will definitely be on the other foot, and I would expect these firms who carried out this bullying practice to become the victims themselves.. EG "I want an increase of 25%, which is exactly what you cut me by in 200n, take it or leave it, I can get another contract".
Oh yes, I can see it coming.. Makes me think is it worth going back to contracting just to turn down those people who would not even look at me in the lean times...
I really do hope some fun is on the horizon for contractors.. You deserve it, having waited so long for the upturn. And I really do hope to see these bullying clients suffer for their past treatment of their contractors.
5. Dominic Oldham
Agencies did not get through it!!! I know many excellent recruiters who left the business as a direct result of not being able to make ends meet. Many lost their homes in exactly the same circumstances as the contractors. Contrary to the beleif that an agent can just "up his margin" to cover lean times the major City firms pick on the agent first, forcing a squeeze on the margin. In many cases colleagues and I would absorb the first and second rounds of cuts in the hope that we could avoid having to upset the "status quo", and sending too many shockwaves among our contractors.
It would be counter productive to want to make sure that employers get a "taste of their own medicine". That will simply serve to alienate the contracting community. We seem to be overlooking that their is a huge potential for UK contractors to "attitude" themselves out of favour.
How long do we think it will be before numerous City contracts are taken up by extremely talented and motivated IT staff from Eastern European countries at a fraction of the cost?
I underaatnd and share the frustration over the market conditions during the last few years but would just urge caution in the desire for retribution - it could back-fire in an unprecedented way...