Press releaseTuesday 4 November 2008

IT contractors seek safety over economy fears

• Job security increasingly more important

IT contractors’ confidence has been dented by the recent financial turmoil, with 25% more IT contractors than three months ago (20% now compared to 16% in Q2 08) giving job security a number one ranking from a list of criteria potentially influencing their choice of contract, reveals research by giant group plc, the contractor services provider.

Contractors are asked to rank criteria (income, job security, work-life balance, skills development, responsibility, and employer brand) from one to five (one being very important, five being fairly unimportant).

According to giant group, contractors are now thinking less about so-called ‘soft’ issues like status, prestige and work-life balance when choosing a contract, and more about maximising the amount of time in work as the risk of unemployment rises.

23% fewer contractors gave criteria like work-life balance, responsibility and employer brand the number one ranking when choosing a contract than in Q2 2008 (36% gave these criteria a number one ranking in Q3 08, compared to 47% in Q2 2008).

The survey by giant also reveals that 8% fewer IT contractors expect to earn more money next year compared to three months ago, though the majority still forecast earnings growth (65% in Q3 2008 compared to 70% in Q2 2008).

There was also an increase in the number of contractors saying that they would prefer a long-term contract over a higher per hour payment – 62% in Q3 2008 compared to 57% in Q2 2008 - which is further evidence that contractors are increasingly concerned about the risk of being out of work.

Matthew Brown, Managing Director of giant, comments: “When times are good and the job market is buoyant contractors tend to be more concerned about higher hourly pay, job status and working for a prestigious employer. But our latest survey results show that IT contractors are de-prioritising these considerations for the time being and concentrating more on securing long term contracts. This is essential for maximising earnings as work becomes scarcer and the gap between contracts lengthens during the downturn.”

“A large number of contractors working in the financial services sector are having their contracts terminated or not renewed, as banks skim off non-essential staff. This has struck a blow to their confidence and made many of them reconsider their priorities, becoming more pragmatic about their prospects for the next 12 months.”

The research by giant also reveals an 11% increase in long-term unemployment during the past 3 months to 5.3% of contractors, compared to the second quarter’s 4.7% long-term unemployment.

Matthew Brown says: “The economic turmoil of recent weeks has had a sudden a dramatic impact on contractor joblessness, which is being mirrored in the wider economy. It’s worth noting, however, that at the bottom of the market after the dot com/Y2K bubble burst contractor joblessness exceeded 12%, so the market is still in reasonably good shape.”

Note: Established in 1992, giant group specialises in providing services to recruitment agencies, temporary workers, freelancers and contractors. The range of services include agency back office solutions from giant precision – timesheet management, billing, payroll, contract management, pre-employment and background checking, BACS disaster recovery – and giant umbrella payroll services where giant is the professional employer organisation employing and payrolling the temporary workers and contractors.

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