Mixed messages show economic uncertainty is the only certain thing:
- 16.1% drop in IT contractor positions in the finance sector, though overall IT sector resilient
- Construction market has 3.1% more vacancies than a year ago
- UK workers’ optimism bucks trend – more people in work and more vacancies than ever before.
- Scottish contractors see billings rise
- Steady decline in online recruitment
The current raft of confusing statistical data, some of which is directly contradictory, exemplifies uncertainty in the contracting sector. Overall, though, it seems we are experiencing a contracting market that is still growing, although at a slower rate than previously,
To Crunch or Not to Crunch
Financial firms don’t appear to agree with the Bank of England’s claims - reported in last month’s Market Report that we have seen the worst of the credit crunch. Computer Weekly SSL’s May survey on the IT jobs market shows the biggest drop, 16.1%, of IT contractor positions advertised since 2001.
Unless an IT project has the potential to show an immediate return on investment, it is likely to be put on the back burner. Projects at risk include CRM systems, internal process projects and those requiring major capital investment.
Companies are carrying on with business-growth projects that will make money. But they are being cautious on projects where the return on investment is less obvious
Ben Booth, vice-chair of Elite, the IT directors forum Computer Weekly
Although financial firms are the first to squeeze IT budgets, the number of contracting positions advertised across all sectors fell by 11.5% from the last quarter, with construction hard hit due to a slow-down in new build housing. However, this worrying drop should be taken in the context of a marketplace with 3.1% more vacancies that a year ago.
UK Job Seekers Upbeat
It seems that UK workers are turning the threat of a recession into an opportunity. If the financial world is feeling the pinch, this can’t be said for most UK workers. A whopping 47% of those workers surveyed by online recruiter Jobsite.co.uk said they will move to higher paying positions this year. It will be interesting to see how many make the move into contracting to achieve their ambitions of earning more.
To reinforce this apparent feel-good factor with hard statistical evidence, the Office of National Statistics Labour Force Survey in April shows we have the highest number of people working in the UK since records began in 1971. And, at the same time, we also have more job vacancies than ever before.
Contractor Billings Rise in Scotland
Whilst Scottish employment statistics overall are showing just over zero growth, temporary and contract workers are on the whole performing well. In the Bank of Scotland’s Labour Market Report last month, 34% of panellists in the temporary and contract sector claimed rising billings. This was matched by a five-month high in demand for contractors and a fall in their availability.
Nursing and Medical Care workers are in the greatest demand throughout Scotland. Then comes blue collar workers followed by secretarial and clerical. Engineering and construction contractors ranked fourth in overall demand, with IT and Computing next at fifth.
It could be that the buoyant oil and gas sector is driving demand for contractors in Scotland, as the strongest growth and demand and fastest pay increases have been in Aberdeen.
IT Sector Resilient to Downturn
Recruitment consultants Harvey Nash have just completed their 10th Chief Information Officer Survey, with results suggesting that many firms of all sizes are looking to their IT function to carry them through the forecast downturn.
Of the senior IT executives and professionals surveyed, 83% saw their role as providing solutions that will make their firm more competitive. They felt that collaboration and innovation were the keys to competitive advantage, and saw a direct correlation between the amount of the IT budget invested in innovation and the resulting return on investment (ROI).
We are seeing innovation collaboration happening more and more frequently and the more IT leaders collaborate the better the results
Bryan MacDonald, Director, Chief Information Officer Practice at Harvey Nash
IT plays such a big part in creating and sustaining competitive advantage as is it seen as a driver of operational efficiency and as a route to new markets. The evidence suggests that IT could present a range of quick fixes for senior managers to boost performance during tough times. Canny IT contractors able to spot opportunities for operational efficiency or exploit existing IT resources, like customer databases, could do well in the coming months.
So where are all the jobs going to?
The overall situation in the contracting sector is far from clear. We’ve already reported this month that the UK has more people in work and more job vacancies than ever before since records began. But according to one of the largest global online recruiters, Monster, overall online recruitment in the UK is falling.
The Monster Employment Index also directly contradicts the Computer Weekly survey, citing increasing online recruitment in banking, finance and insurance. And, according to Hugo Sellert, Head of Economic Research at Monster Worldwide, “…demand in the financial sector remains relatively robust…”
Another area of confusion is in the construction sector. The slowing housing market appears to be the culprit for the overall job slow-down reported by Monster, with opportunities in architecture and construction showing a sharp decline in the last month, but still up on the previous year’s figures. Yet Broadbean Technology, which is responsible for distributing a staggering 1.2 million recruitment adverts every month, is reporting a downturn in financial sector recruitment, and a buoyant building sector. So, who are we to believe?
With such mixed messages from diverse sources it is difficult to assess the true direction of the contracting market. Although upbeat about the economy, workers in the Jobsite.co.uk survey are also concerned about inflation and interest rates; so macroeconomic factors are having an impact on our confidence in the economy.
Taking everything into account, it appears from statistical indicators that overall we are experience a slower growth of the contracting market rather than an actual decline.