“We will see a slow recovery in 2010, with encouraging signs already present. But competition for contracts will be fierce and contractors will need to work smarter and up their game to win work,” believes Alan Rommel, Managing Director at Parity Resources.
As the end of the ‘noughties’ hurtles towards us, in this exclusive interview with ContractorCalculator, Rommel reviews the past year, gives his insights into what 2010 will hold, and offers advice to contractors wanting to make sure they stay in contract.
According to Rommel, 2009 was a tough year for almost everyone in the contracting sector: “The majority of recruiters have seen revenues fall by 25% in 2009, and one in four contractors has struggled to find work or has only been working at 75% capacity.”
IT contractors had ‘annus horribilis’ in 2009
Things have been particularly bad in IT contracting, says Rommel. “We’ve seen a quarter of IT contractors unable to find contracts, while those that have been in contract have suffered from the rate reduction programmes that have dominated the commercial client sector.”
He explains: “We’ve seen systematic rate reductions in the commercial sector ranging from 5% to up to 20%, and we anticipate this downwards pressure on rates to continue in 2010.”
The outlook would seem to be worrying for public sector IT contractors, too. “We have a strong position supplying IT contractors into the public sector, and we are expecting our public sector clients to start reducing rates as they see their budgets slashed in cost-saving exercises,” says Rommel.
Slow growth forecast for 2010
The good news is that some commercial contracting markets have already bounced back, and Rommel cites the financial sector emerging as the biggest growth market for late 2009, a trend likely to continue in 2010.
“Business and market needs mean that projects put on hold a year ago can’t wait any longer, resulting in fresh budgets for new talent,” explains Rommel. “Demand is growing in technical areas like SharePoint, SAP and some web technologies, but is less strong in project management.”
Business and market needs mean that projects put on hold a year ago can't wait any longer, resulting in fresh budgets for new talent
Alan Rommel, Parity
According to Rommel, some previous hesitation in decision making on the part of clients is due to the fear of being seen to make the wrong decision. “Where the threat of redundancy is high within commercial client organisations, executives don’t want to be seen to make poor decisions; so they sometimes simply avoid the issue by taking no decision at all!”
Rommel forecasts that the growth in commercial contractor markets will be tempered by a lull in the second quarter, which is most likely to be immediately post-election, when the new government will take stock of spending and commissioning new projects is halted. “But we’ll see public sector spending pick up again,” he says, “because the new administration will have its own ideas that need investment.”
Contractors must up their game in 2010
“Although there will be more contracts out there, where once a client would accept a 90% fit with the contractor in the frame, in future they will be seeking a 99% fit,” Rommel warns. “This means contractors will need to stay positive, be flexible and up their game.”
Rommel has the following advice for contractors:
- Be pre-emptive. Try asking for a contract renewal, extension or new project with your existing client before considering going to the open market for a new contract
- Be flexible about location. A 200 mile commute or living away from home during the week in the short term may be a small price to pay for staying in contract
- Tailor your CV to the contract on offer, and include references and testimonials which could tip the balance in your favour
- Shout about your accomplishments and the value you have added to your current client’s organisation. Don’t be ‘British’ and reserved – be upfront and ‘in your face’
- Work with your agent. Pick two or three good proactive ones, tell them where you’ve worked on past contracts and encourage them to create opportunities for you
- Spread your CV wider among more agencies. Many generalist agencies are on exclusive managed service contracts with clients and you won’t get put forward for those contracts if you are not with that agency. But don’t forget the specialist, niche, agents with an in-depth understanding of the contractor skills and market
- Above all, be even more professional, deliver even better than before and make sure your client knows about it.
This and further advice on upping your game can be found in the Contractors’ Handbook, which is full of tips on how contractors can easily and effectively ‘up their game’.
Uncertainty – a good thing for contractors
Rommel has some surprising advice: “Uncertainty can work in favour of contractors, because they are a low-risk alternative to a permanent employee. So canny contractors should exploit this uncertainty, particularly if they have a good agent proactively sourcing contract leads.”
Contractors shouldn’t lose heart, says Rommel, who predicts that the first two quarters of 2010 will feel like nothing has changed, or that they are even getting worse; but he is cautiously optimistic that the summer will see an upswing in confidence.
Hot summer for contractors?
“The post-election spending freeze will be over and the World Cup will literally have kicked off, resulting in increased confidence and the hoped-for release of new budgets,” he says. “The flies in the ointment will be the increased outsourcing to India and other low-cost regions, inter-company transfers of low-cost migrant IT workers into the UK and the impact of the bankers’ bonus tax on the City.”
But despite the turbulent times ahead, Rommel maintains that the flexible workforce is an essential component of the UK’s economic recovery. “Contractors who keep their nerve and up their game will stay in contract,” he asserts. “Yes, 2010 will be another tough year, but those of us who survived 2009 will be up for the challenge.”