IT contract market slips into recession

by Editor 11/19/2008 3:03:00 PM
IT contractors have begun to feel the impact of the economic crisis in the third quarter this year. The IT contracts market has slipped into recession, writes Contractor UK, with the demand for freelance IT jobs dropping for the sixth successive month.

A recent study from CWJobs shows that the IT job market has entered recession, with the number of IT jobs being advertised dropping for two quarters back-to-back, and temporary employees are the first to feel its impact.

IT contractors have witnessed the sharpest decline of job adverts, 13 percent less than in the second quarter and 25 percent less than in the same period last year.

Matt Smith, director of UK regions at Harvey Nash, said: “We have seen pay ultimatums spread beyond financial services across a range of sectors. At the moment, we are at a stage where contractors are certainly not as confident as they were this time last year, when they expected to go from one role straight into another. As a result, contractors are being more pragmatic when their clients are telling them to cut their daily fees mid-contract, upon renewal or effectively be gone.”

The same survey, however, found that contractor pay rates were up by one percent on average compared to last year. IT directors and system analysts polled by SSL defied the pressures to cut their fees, while contract developers and programmers tended not to.

A greater number of IT contractors are now considering full time roles because of the economic uncertainties. “Organisations know that they can fill their jobs permanently, so if they need a certain role they are advertising for it permanently and that is… reinforcing that the contract market is being squeezed,” says Smith.

IT jobs in the public sector, on the other hand, are seeing a 25 percent rise in advretising for freelance IT staff. Gill Hunt of IT consulting firm Skillfair says: “The permanent and contractor jobs markets have slowed down – but we’re still seeing a high level of project based work coming through, particularly from the public sector. Consultants in our IT market who have taken the time to market themselves independently are still picking up new contracts.”

“I guess the old adage still holds,” concludes Hunt. “If you’re willing to travel and put the effort into marketing yourself, then the work will come. But your work-life balance may have to suffer for a while.”

Find the latest IT contract jobs on Top-ContractConsultant.com.

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