The number of IT contractors out of contract long term now is half that of the dotcom crash, according to a new survey published by contractor services firm Giant Group. These results are prompting speculation that client organisations are viewing IT, and their IT strategies, in a different light, six years on.
The research by Giant shows that, at the end of 2003, 13% of IT contractors were out of contract for more than 90 days, compared to 7.5% of IT contractors out of work for more than three months today.
According to ContractorCalculator CEO Dave Chaplin, this research demonstrates that IT strategies have moved on: “During the dotcom boom there was nothing short of hysteria about what money could be made from internet businesses, with firms throwing money at speculative ventures without concrete business plans.
“This time, it’s different. Like it or not, organisations have no choice but to maintain investment in IT or they will fall behind, and may never catch-up.”
No contractor fat to trim
And, as Matthew Brown, managing director of Giant Group, explains, IT directors have far less fat to trim: “IT departments were pared to the bone after the dotcom crash in 2001/02 and have been cautious about ‘vanity projects’ ever since. This means that IT departments are much leaner going into the current downturn.”
Contractors are clearly still concerned about job security and whether we are at the bottom or the market still has some way to fall.
Matthew Brown, Giant Group
IT contractors appear to share the strategic view, as the research by Giant shows that the stability and longevity of a contract was valued as more important than its rates – 62% of contractors prefer long-term contracts to higher hourly pay, up from 56% in 2003.
Brown continues: “Recent research suggests that IT spending is unlikely to be as negatively impacted by the downturn as spending in other business areas. But with rates in some sectors having been cut, contractors are clearly still concerned about job security and whether we are at the bottom or the market still has some way to fall.”
Public sector – knight in shining armour?
IT contractors appear to view the public sector as their saviour, following the collapse of the financial services sector in 2008. A whopping 30% of IT contractors expect to find greater contracting opportunities in the public sector, up from just 13% in 2003.
“Demand for workers in the public sector is usually much less volatile during a recession than the private sector,” says Brown. “Despite the risk that funding for public sector IT projects may be adversely affected by the Budget, for the short term at least projects are likely to continue as planned, as funding for them has already been earmarked.”
The battering the financial services industry has suffered is shown by the 9% fall in contractors’ expectations of securing a contract in the sector. In 2003, 24% of IT contractors expected their next contract would be in financial services; in 2009, it’s 15%.
Contractors’ sales skills even more important
“With more contractors chasing even fewer contracts, it’s even more important for contractors to hone their sales, marketing and negotiation skills,” explains Chaplin. “This means a killer CV and highly targeted job search, together with faultless interview and negotiation techniques.”
Support to achieve these is out there in the form of the Contractors’ Handbook, written by Chaplin and including the invaluable knowledge he gained contracting through previous recessions.
Dave Chaplin is a former IT contractor in the City of London, and is founder and CEO of ContractorCalculator, and author of the Contractors' Handbook.
Started in 1999, ContractorCalculator (this site) is the leading independent website for the UK contracting industry – most of whom are highly skilled knowledge workers.
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It is the contractors who are best at winning contracts who stay in work, and those contractors work hard on their sales skills to stay there
Dave Chaplin, ContractorCalculator
“It’s a well-known fact that it is not the best contractors who win contracts,” says Chaplin. “It is the contractors who are best at winning contracts who stay in work, and those contractors work hard on their sales skills to stay there.”
Published: Thursday, April 16, 2009
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