IT contractors to shine in 2009?
It's been a pretty torrid year for financial IT contractors, who have faced compulsory rate cuts of up to 15%, shrinking opportunities and increasing anxiety over job security. However, it seems their 'cost flexibility' could work to their advantage in 2009.
When State Street announced plans to scale back its $1.3bn tech budget for next year, it said it would look to take on more contractors, due to their "flexibility in expenses management". Similarly, Man Group says it plans to use contractors for projects going into 2009.
Obviously, two firms doesn't make a trend, but with shrinking technology budgets, and increasing difficulty securing permanent headcount, could contractors be used more going forward?
Ann Swain, chief executive of the Association of Technology Staffing Companies (ATSCo), thinks so: "It makes perfect sense to use contractors in the current climate. There's no reason why contractors should cost more than permanent staff, particularly when you incorporate benefits and training. However, if you don't pay them enough, skilled contractors will look to other sectors."
She says the allure of working in the City was always the fact you could make more cash. However, with rates shrinking and job security diminishing, the financial sector could face an IT contractor exodus.
A report by TowerGroup suggests that while IT spending in UK state bailout banks may cease, those not under government supervision might suddenly find the riskier markets lacking in competition. This could spur a rush of short-term tactical market opportunities, and supporting IT projects, which will provide more openings for contractors.
Simon Walker, director of IT recruiters Project Partners, reckons he's seen an influx of contractor positions recently and expects this to continue.
"Firms are still rolling out projects that are putting strain on the existing workforce. However, there's no way they can get sign-off for a permanent head in the current climate. Contractors' flexibility makes them the ideal solution. We've actually seen roles that were previously permanent change to contractor positions in the past couple of months," he says.
