The situation for the UK contracting sector is likely to worsen before it improves, according to key industry commentators. But research by the IT Job Board confirms that plum contracts are out there for the taking, if you know where to look and how to get them.
As for the UK economy, it appears to be getting ‘less worse’ and the end of the recession might be in sight, according to a ContractorCalculator analysis of the combined results of four of the biggest UK business barometers.
In this month’s ContractorCalculator Market Report:
- The Monster Employment Index see-saws back into the black with a 1% increase in online recruitment overall, but IT, engineering, construction and management all fall
- BDO Stoy Hayward’s Industry Watch warns of huge levels of business failures before the economy bottoms out
- The IT Job Board’s 2009 salary survey shows massive variation of IT contractor pay, and proves lucrative contracts are still up for grabs
- Recruiters are reporting a rise in demand for contract workers, according to the KPMG/REC Report on Jobs
- Morgan McKinley’s London Employment Monitor shows City fortunes slowly improving, with overall vacancies increasing by 20%.
Monster Employment Index
Following a fall last month, the Monster Employment Index is up again, continuing its seesaw trend of recent months. Overall, though, the index is still down by 38% compared to last year’s levels of online recruitment.
The most recent upturn was in part down to increased demand for telecoms workers. Of the ‘mainstream’ contracting sectors, only telecoms and marketing saw an increase, with the following all recording a drop:
- IT
- Engineering
- Construction
- Management and consulting.
Production, manufacturing, maintenance and repair, where many technical and engineering contractors work, saw a surprise increase.
According to Hugo Sellert, head of economic research at Monster Worldwide: “While it seems that the worst of the downturn in hiring activity is behind us, the latest Monster Employment Index reading shows that the UK labour market remains in a lull, with further rises in unemployment to be expected over the summer.”
BDO Stoy Hayward Industry Watch forecasts business failures
This summer’s BDO Stoy Hayward Industry Watch warns that over 36,000 business failures are expected in 2009, rocketing to a whopping 40,400 in 2010. That’s well above 1992 peaks, with construction and manufacturing expected to be two of the hardest hit sectors.
In its biggest fall since 1931, the UK’s GDP is forecast to drop by 4.5% in 2009, with no growth expected in 2010. Unemployment is set to rise to 9.2%, or 3.3 million unemployed in 2010. These are alarming statistics for contractors, because, whilst contractors are often viewed as a low-risk alternative to employees, if the overall economy hits rock bottom then the knock-on effect could be considerable.
However, Industry Watch editor Shay Bannon says that the bottom is in sight and that the decline in the economy later in 2009 is likely to be less severe than it has been so far. Bannon also predicts that construction is likely to be the first sector to emerge from recession.
IT Contractor pay resilient to downturn
The IT Job Board has published its Salary Survey 2009, showing wildly varying rates of pay. Hourly pay rates depend much more on the type of role rather than the location, with some of the highest earners working outside London and the South East.
Highest paid (per hour)
- Database administrator, London, £72
- Consultant, East Midlands, £73
- Software Engineer, London, £71.
IT directors in all areas except the East Midlands earned more than £100 per hour, the highest being £180 per hour in East Anglia.
Lowest paid (per hour):
- IT support, North West, £6
- Test analyst East Midlands, £6
- Web developer North East £7.
The survey confirms that the IT contractor market is vibrant and rich in variation, with high paying roles available across many skills and all over the country.
Based on over 6,000 responses between February and April this year, from contractors and permanent IT employees across the UK, the survey classifies IT contractor earnings into 15 of the most common job titles and by region, although in most cases excluding Wales and Northern Ireland due to lack of data.
Increased contractor demand says KPMG/REC Report on Jobs
The decline in both permanent and temporary worker appointments is slowing, says the latest KPMG/REC Report on Jobs. This means that conditions are still worsening for contractors, but at a slower rate. Furthermore, according to Recruitment and Employment Confederation (REC) chief executive Kevin Green, demand for contractors is on the rise.
“An increasing number of recruiters are reporting a rise in the demand for temporary and contract staff,” he says. “Flexible working options will provide a crucial way back into work for a number of jobseekers, which is why we must ensure that the new regulations covering agency work do not limit these opportunities.”
An increasing number of recruiters are reporting a rise in the demand for temporary and contract staff
Kevin Green, REC
The fall in contract availability was the smallest for eight months, but pay for temporary and contract workers has also fallen because the number of workers chasing each contract has increased.
Morgan McKinley shows City financial sector picking-up
Contractors who rely on the financial sector for their contracts can take heart from the latest Morgan McKinley London Employment Monitor. This shows that new job vacancies are up 20% on the previous month.
The City’s financial sector has traditionally provided work for a significant number of IT contractors based in London and the South East. But contracts and rates have been slashed in the last twelve months, as clients grapple with the fall-out of the credit crunch.
“Over the last couple of months, there have been muted increases in hiring in most areas and across most levels within the financial services industry,” comments Andrew Evans, managing director of Morgan McKinley’s financial services division. “And in areas where there hasn’t been a rise in actual job numbers, there does seem to have been an improvement in the appetite amongst employers to recruit.”
The knock-on effect, particularly for IT contractors, is likely to be positive, because as trading activity increases, the demand for back-office systems and front-end support also goes up.
Published: Tuesday, August 04, 2009
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