By Sylvia Carr, 3 August 2004 11:40
NEWS IT contractors can get higher hourly rates by allowing employment agencies to charge fees to companies who want to hire the contractor on a full-time basis or hire the contractor from another agency.
This indicates there could be a shortage of skilled tech contractors and thus the agencies - not the hiring companies - have the upper hand in jobs negotiations, according to one accountancy for IT consultants.
To allow the agencies to charge fees for 'temp to perm' and 'temp to temp' positions, the contractors must opt out of a new regulation - called The Conduct of Employment Agencies and Employment Businesses Regulations 2003 - that does not allow agencies to automatically charge the hiring companies in these situations.
A recent survey of 83 IT consultants shows that the vast majority - 63 - would choose to opt out of the regulation for the right assignment. Just 12 of the respondents said they wouldn't opt out, while eight said they weren't sure what they'd do.
Opting out increases the chance that agencies will charge higher rates for a contractor's time from clients.
The survey was conducted by JSA Group, an accounting firm for IT consultants.
Barry Roback, CEO of JSA Group, said in a statement that this situation is largely dependant on market conditions: "When there are shortages of well-skilled contractors, agencies will find themselves in the driving seat. At present, market forces are moving in the agencies' and contractors' direction, but it would be unwise to think that these conditions will prevail for the foreseeable future."
Comments
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1. Alex
'Opt out or else' is the option agents have apparently been offering so I don't think it's moved in the contractors direction. The 'or else' being your CV may not make it to the client because more suitable candidates are being found.
At least the opt out has allowed contractors to remain free of some of the more restrictive and employee like restrictions of the legislation.
I don't think we have quite got to a shortage of skilled IT contractors yet, much of the interest I have had is offering lowish rates.
When the rates start rising and the client requirments start dropping we have a shortage.
Of course businesses have planned for this coming shortage in the last two years and trained up a large number of entry level people to a high level. Or will we hear renewed demand for more work permit holders?
2. anonymous
You will still hear the cry "we need more work permits" because the accountants who drive modern industry say you can not justify that expence of training people who will only move on. Why is it that when a work force is "rationalised " the accounting departments seem to get left out of the process?
3. John Wilson
Shortage? What shortage?
I'm never really convinced that the shortage of skills is as simple as often portrayed, though as we all (should) realise, being skilled doesn't just involve going on the appropriate training courses. The IT industry is generally dreadful in terms of appreciating that staff actually need to have a reasonable level of aptitude for the job in order to be competent, and not just possess the right training certificates.
As for the shortage, I think a more accurate way to describe it is a shortage of competent staff who are willing to work for peanuts!.....
4. Brian Burkill
To me it just seems like another way for agents to make more money from either the contractor or the client.
And, if you dont opt in, you dont get the job, smacks of extortion to me.
This is in the agencies favour, to allow them to put up margins and still give the contractor the same rate.
So glad I am out of that game now.