eFinancialCareers

IT contractors are anticipating another rate rise this year, but do they have their heads in the clouds?

Research into the IT contractor market within financial services would have you believe the temp route is the way to go.

A study by SkillsMarket and the Association of Technology Staffing (ATSCo) in February says contractors have seen an 11% pay rise this year. Now, in its annual contractor expectation survey, JSA – a specialist IT contractor accountant – says temps are anticipating much more.

Of the optimistic (some might say deluded) respondents, 63.5% expected a rate rise of between 5% and 15% this year. This lofty figure seems particularly ambitious when most imagine the market will either shrink or remain static.

A buoyant 2008?

Graham Burns, director of the technology division at recruiters Robert Walters, says: “We’ve seen a slight decrease in contractor roles this year. February was quiet and March was subsequently busy, but we expect a buoyant contractor market in 2008, if not a slightly better one than 2007.”

But can contractors expect rates to head to new highs? Julia Bosworth, manager of the contractor division at IT recruiters Project Partners, thinks not: “It’s a massively optimistic prediction. Right now people are concerned with security rather than more money. We’re doing more extension work than new contracts. Banks are looking to transfer people internally to new projects, and contractors are having to market themselves more on site.”

Contractors at the drop of a hat

Regardless of pay, now is a good time to be an IT contractor, reckons Richard Lett, manager of the IT team at recruiters Jonathan Wren: “During the last downturn in 2001-02, banks pressed the eject button and contractors were the first to go. Now, managers have to submit lengthy business proposals to justify a permanent head, but they can bring in contractors at the drop of a hat.”

Burns agrees that the temp route currently has an added allure: “At the senior end, a lot of permanent candidates are thinking ahead and making themselves available for contract work, as it will improve the quality of a lot of the jobs being run by them in the coming months.”

Still, it’s not all good news. A report from the Giant Group suggests that long-term unemployment among IT contractors within banks has risen to 5.5% this month, from 4.4% at the end of 2007. This is still very low, though, reckons the specialist temp recruiter.