Press releaseMonday 27 April 2009

Long term joblessness among IT contractors half of what it was five years ago

Contractors confident public sector will support the market

Despite the economic crisis joblessness among IT contractors is still only half of what it was during the aftermath of the dot com crash five years ago, reveals research by giant group plc, the contractor services provider.

This is higher than the average for the public sector which employs 19.5% of the UK workforce overall, according to data from National Statistics.

The research by giant shows that at the end of 2003, 13% of IT contractors were out of work for 90 days or more. This contrasts to 7.5% of IT contactors out of work for 90 days or more in giant’s latest survey.

Matthew Brown, Managing Director of giant group plc, comments: “Despite the current problems that IT contractors are faced with they are still faring far better than they were following the dot-com crash.”

“IT departments were pared to the bone after the dot.com crash in 2001/02 and have been cautious about vanity projects ever since. This means that IT departments are much leaner going into the current downturn and IT Directors have far less fat to trim.”

Job stability rated as more important than higher pay

Even though they are faring better in terms of long-term employment prospects, more IT contractors now prefer a long-term contract to higher per hour pay than five years ago, according to giant’s research.

At the end of 2003 56% of IT contractors preferred a long-term contract to higher per hour pay. That figure is now 62%.

Says Matthew Brown: “Recent research suggests that IT spending is unlikely to be as negatively impacted by the downturn as spending in other business areas, but with rates in some sectors having been cut, contractors are clearly still concerned about job security and whether we are at the bottom or the market still has some way to fall.”

IT contractors put faith in public sector employment

Confidence in the public sector to support demand for IT skills is at an all-time high. Five years ago, 13% of respondents thought that they would be able to find more opportunities in the public sector in the following year. That figure has jumped to 30% in the latest giant survey.

Says Matthew Brown: “Demand for workers in the public sector is usually much less volatile during a recession than the private sector. Despite the risk that funding for public sector IT projects may be adversely affected by the Budget, for the short term at least projects are likely to continue as planned, as funding for them has already been earmarked.”

In contrast, giant’s research reveals that 24% of IT contractors expected in 2003 that their next contract would be in the financial services sector. This figure has dropped to 15% this year so far, as IT professionals are still feeling the ripple effects of the collapse of major financial institutions in 2008.

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 (www.giantprecision.com) – 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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