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UK — IT contractors back in demand as long term unemployment falls by -33%

24 May 2010

According to umbrella company and contractor services provider Giant Group Plc, the number of IT contractors who were out of work for three months or more fell by -33% in Q1 2010.

Six months ago, one in ten (10.1%) of IT contractors had been out of work for three months or more, compared to just over two thirds (6.8%) who are long term jobless at the moment.


Official Government data shows that investment in IT (hardware and software) jumped by +9.2% in Q4 2009.

Matthew Brown, Managing Director of Giant, commented "this is a very dramatic drop in long term joblessness among IT contractors. It shows just how deeply IT departments cut back on personnel during the recession and how strongly investment in IT is bouncing back."

"After cutting back on IT investment for so long, businesses are now kick-starting projects which were stalled during the recession. Many IT Directors shed contractors over the last 18 months, but are now finding themselves dangerously understaffed as project workloads start to pick up."

Matthew Brown added "contractors are often the first to be let go in a recession, but they are usually the first back in the door as the economy recovers. IT Directors are still wary about increasing headcounts, so contractors offer a relatively low-risk way of increasing capacity without incurring additional employment-related costs as demand recovers."

The Giant research also reveals that the proportion of IT contractors expecting their earnings to rise in the next year has jumped from 61.4% to 65.8% over the last six months.

Brown said "inevitably as demand recovers and joblessness falls we will see a return to end users out-bidding each other for skills, which should lead to rate increases. Many financial services companies slashed rates by around 20% over the past 18 months, so we could see some fairly dramatic pay increases in areas of acute shortage as the recovery gathers momentum."

 

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