Demand for IT contractors has strengthened over the past six months despite the uncertainty caused by the vote to leave the European Union. At first glance this seems counterintuitive. Demand for IT contractors has strengthened over the past six months despite the uncertainty caused by the vote to…
Demand for IT contractors has strengthened over the past six months despite the uncertainty caused by the vote to leave the European Union. At first glance this seems counterintuitive.
Historically, contractors have been the first into and first out of a period of economic malaise or even just uncertainty. The fear was that the EU referendum result would send the jobs market into a tailspin, and that contractors would be first to feel the pain. They are, after all, a flexible resource and it is much more cost effective for organizations to divest themselves of contractors than employees. In the months leading up to the referendum last June, that is exactly what we saw. Demand for contractors weakened as organizations hesitated over their IT investments until some measure of clarity was achieved.
It could be argued that the current position is not much clearer. The UK is leaving the EU but on what terms is still a matter for speculation. Prime Minister Theresa May’s letter triggering Article 50 sheds some light on the sort of relationship the UK might have with the EU post March 2019 and there are suggestions from both sides that continuity will be a priority. This will be good news for business investment, much of which is spent on IT hardware and services.
Our research, among 600 IT contractors, indicates that there has been a modest, albeit comforting, upturn in demand for contract IT skills since the referendum. The positive change in the market over the last six months has not been dramatic but nevertheless important when you remember that many commentators were forecasting economic Armageddon. A growing proportion of IT contractors have seen their daily rates increase over the past six months. Twenty point five percent of contractors are reporting an increase in their daily rates, compared to 19.4 percent just before the referendum. At the same time, the proportion of IT contractors experiencing rate cuts is falling. Sixteen point six percent of contractors recently experienced a reduction in rates, down from 18.
