Crystal Umbrella

CWJobs has compiled research on behalf of CUK which shows that permanent IT staff are more likely to feel the need to retrain or enhance their skills than their contracting counterparts. The recession has forced all workers to think about their skills but this research shows that nearly two-thirds of permanent techies felt ‘forced’ to retrain during the economic downturn while only 53 per cent of IT contractors felt the same pressure.

However, the research did show that many IT contractors are still choosing to retrain to give themselves the best chance of competing in the market which is saturated with highly skilled freelancers. The research also found that permanent IT staff were more likely to complain about the effects of the recession than contract IT workers. However, nearly 75 per cent of IT contractors said that they did not feel that their skills set matched the current market requirements.

Richard Nott, CWJobs site director said: “IT professionals need to take control of their careers and understand the importance of developing and showcasing their skills correctly. This in turn, will allow them to have a competitive advantage against their peers and increase their opportunity to negotiate with prospective employers.”

Nott also explained that as permanent and contract IT job-seekers were placing more focus on their individual skills and expertise, candidates would be under more pressure to display the core skills they possess. According to the research, IT contractors stated that the skills which are currently in high demand are SQL, .Net and Java.
IT contractors also stated that if they were to invest in re-training they would be most likely to opt for SAP, even though they acknowledged that Linux would be in demand between now and 2011.

New research by Clydesdale Bank has shown that confidence is rising amongst employers and contractors. This fresh belief that the economy can recover comes at a time when figures suggest that employment is growing for the first time since the recession hit.

Data received from the Clydesdale Bank research showed that ninety per cent of those polled expressed optimism for the future, while one thirds of businesses believed that they could survive in these tough economic times.

Mike Williams, Clydesale Bank Executive said of the research: “This is a positive sign: where confidence exists, growth often follows. It has clearly been a challenging time for businesses, but these figures show there are signs of stability creeping into the market but it is still important to retain a grounded and cautious perspective as the market changes.”

Further evidence that things are improving comes from data compiled by the Recruitment and Employment Confederation (REC) and KPMG. According to these statistics, permanent employment grew in the month of August for the first time in nearly a year and a half. There was also a growth in the number of contractor positions for the first time in over a year. August also recorded less salary reductions than previous months.

Despite the positive connotations of this data, Bernard Brown, partner and head of business services at KPMG warned that it is “too early to speculate”.

He continued: “Given that employment costs are a substantial element of public sector spending, you would expect significant pressure on those costs going forward. This is likely to have a significant impact on the UK jobs market.”

The rate of VAT was reduced to 15% at the height of the country’s economic downturn. At the time, the chancellor warned that it would revert back to 17.5% as soon as the economy showed signs of recovery. HMRC have now confirmed that this will happen on 1^st January 2010. This will affect the majority of businesses from the stroke of midnight at New Year. The only exception will be pubs and clubs who operate through the night. However, tax experts have said that such businesses can only expect a few hours grace period from HMRC before they will have to apply the full rate.

HMRC have issued guidance to support businesses through the transition of reverting back to the original VAT rate. It is expected that the change will cost businesses in the region of £125m.

Choosing to increase VAT on New Years’ Day has been met with criticism from business groups and economists alike.

George Bull, from accountancy group Baker Tilly, spoke to the Financial Times about the impending increase. He said that he believed that the VAT cut had failed to achieve an increase in consumer spending as had been hoped. He believes this is the reason why the reduction looks set to be cancelled at the turn of the year.

For many, it’s hardly surprising as recent indications suggest that the decrease barely impacted upon consumer spending. Although for campaigners wanting to postpone the imminent VAT rise, the refusal to prolong the period is seen as a significant disappointment.

CBI, the voice of business, are predicting that unemployment could reach 3 million in the UK by the middle of next year. It reached 2.4m in August. In a bid to tackle this issue, Microsoft have launched their ‘Britain Works’ campaign, born from the belief that “there’s only so much” that government ministers can do to support people who are unemployed.

This incentive aims to provide training and paid apprenticeships throughout the Microsoft network and has been given the seal of approval by the CBI. Financial backing is being provided to many of the smaller businesses within the Microsoft corporation to train 3,000 IT apprentices. The software giant has previously run a similar initiative which was based purely in the West Midlands. Based on the previous project, it is believed that the first IT apprentices (approximately 700) should be ready by September next year. Overall, up to 500,000 unemployed people could be helped by the programme.

Britain Works is a partnership initiative which will see Microsoft working alongside Job centre Plus. Opportunities will be available for jobseekers to take part in varying levels of IT training courses through the allocation of vouchers.

Former director-general of the CBI, Lord Jones, said: “There are thousands of people who do not have the appropriate skills that businesses need in today’s IT led economy. Businesses still need these people, and so a significant part of this campaign will focus on making ‘Skills for Business’ training vouchers available.”

The Association of Professional Staffing Companies has surveyed its member firms on the recent swine flu pandemic and have found that IT contractors are reluctant to take time off work, even if they are suspected to have the virus. This could potentially cause others in the workforce to become infected with the H1N1 virus. APSCo have attributed this reluctance on behalf of contractors and freelance workers to the current recession as they only get paid for the hours they actually work. Many contractors feel that they cannot afford to take time off due to illness. However, this issue could worsen later this year if the expected second wave of swine flu hits.

Marilyn Davidson, APSCo’s director, said: “In past years seasonal flu hasn’t been much of a problem and is considered an occupational hazard for contractors. This year though, the recession has exacerbated cashflow problems for contractors and there are compelling reasons for them to try and stay at work.”

The APSCo survey revealed that contractors who refuse to go home when sick are likely to cause “animosity” within their place of work. APSCo are recommending a pro-active approach, advising employers to ensure that their sickness policies were up to date and that “contractual terms are revised at the earliest opportunity.”

APSCo commented further: “Significant problems can arise of a sickness policy is ambiguous and a contractor with suspected swine flu stays on-site. This is something that is increasingly likely during the recession as contractors do not get sickness pay, so will be looking to maximise their income.”

Following the sixteen recommendations made by the Migration Advisory Committee, the government are set to introduce a number of measures to protect employment opportunities for UK residents .

From 2010, there will be a requirement on employers to advertise vacancies in Jobcentre Plus for four weeks before they can seek to bring non-EU workers into the UK to fill positions. Any worker being transferred to the UK must have been employed by the company for at least 12  in order to qualify. Previously, jobs only had to be advertised for 2 weeks and the workers only had to be employed by the company for 6 months.

Non-EU workers must also qualify as skilled workers to be eligible for a transfer into the UK. This means that the worker must be earning at least £20,000. This has been increased from £17,000.

Alan Johnson, Home Secretary, said: “The introduction of the points based system has radically improved our ability to respond quickly to changing economic circumstances. We have now accepted all of the Migration Advisory Committee’s recommendations and we will continue to work with them to make sure we use the flexibility in the points system to the best advantage of society and the economy. These changes will ensure that businesses can recruit the skilled foreign workers that the economy needs, but not at the expense of British workers, nor as a cheaper alternative to investing in the skills of the existing workforce.”

The Association of Professional Staffing Companies (APSCo) believe that the proposal by the Home Office’s Migration Advisory Committee (MAC) for a points-led system for immigration could result in an influx of non-EU IT graduates into the UK.

Under the MAC recommendations, graduates would be eligible to enter the UK through the intra-company transfer (ICT) system. Such graduates would only be required to have been employed by the company for three months prior to the transfer. There would be no requirement on the sponsoring company to advertise the position in the UK first. Non-graduates will be required to work for the company for at least 12 months before they will be eligible for transfer.

Chief executive of APSCo, Ann Swain, commented: “While the ICT system might not be exploited in the financial and legal sectors, there is evidence that it is being exploited in the IT sector. Nearly six times as many IT workers entered the UK last year on ICTs than workers in the entire financial services and legal sectors combined.”

She continued: “The whole point of ICT is to bring in senior staff with specialist knowledge or expertise not readily available in the UK. Using the system to bring in graduates would be wrong-headed and illogical. While graduate secondments can be a useful way for companies to train staff, these proposals could lead to a significant increase in non-EU IT graduates coming to the UK at a time when there are plenty of UK IT graduates out of work.”

“Most of the non-EU IT workers coming to the UK are working for Indian software companies. India produces enormous numbers of IT graduates every year, so there is a real concern many could head to the UK on intra-company work permits if this proposal is adopted.”

“The irony is that while graduate level IT jobs are being outsources to India it is now being proposed that it should be easier for Indian IT graduates to work in the UK at a time when there are few if any skill shortages at that level.”

A Nottingham-based recruitment agency has devised a new incentive to encourage employers to hire permanent IT staff instead of continuing to hire IT contractors to fill their positions. Ratio Search & Solutions are offering to pay the candidate’s first month’s wage if they are taken on as a permanent employee. This incentive aims to increase the demand for full-time, permanent IT staff and is applicable to any of the permanent ICT job-seekers and end clients on the agency’s books.

Ratio Search & Solutions have revealed that the development of this incentive has been as a direct result of the continued use of temps to fill IT positions. They have admitted that their incentive is a ‘radical’ step, however, with the current economic climate still affecting recruitment, they said that many employers are still reluctant to hire permanent, full-time employees.

Their incentive to employers is not just financial. While Ratio will pay the first month’s salary of any successful candidate, they are also offering a guarantee to the employer that is that employee leaves the company within the first twelve months, a replacement will be provided.

Recruitment director of Ratio Search & Solutions, Steve Byrne, spoke to MicroScope about this recent development at the agency. He said that they hoped the incentive would “knock down some of the barriers” to permanent employment.

He continued: “We have never seen such demand for temporary staff”. He attributed this to the fact that contract staff do not increase overheads for employers.

HMRC are set to streamline their system for filing tax returns on-line alongside Companies House. This common approach has been adopted to minimise the administrative burden of changes to software on businesses.

This new data format is known as Inline XBRL (iXRBL) and will be adopted by Companies House by the summer of next year for unaudited full accounts. They will then roll out the system for all accounts they receive. Companies will be able to purchase iXBRL-enabled software from Spring next year.

HMRC will follow suit in their adoption of this system from April 2011 for all Company Tax Returns (CTRs). This will include the return form, tax computations and the company accounts. The new method for filing online will take effect for accounting periods which end after March 31^st 2010. However, the HMRC’s iXBRL service will be available for CTRs from November 2009.

Chief Executive of Companies House, Gareth Jones, commented: “This early statement of our intentions will reassure businesses that both HMRC and Companies House are working closely together to align our services to make the filing of accounts as easy as possible for UK companies.”

The Carter Programme has responsibility for the improvement of HMRC’s online services. Its Programme Director, Mark Holden, said: “Today’s joint statement is an important step towards our goal of offering a joint filing facility for company accounts and Company Tax Returns, as recommended by Lord Carter’s Review of HMRC’s Online Services.”

Parity Group, which provides IT services and recruitment, has announced their interim results for the period ending 30^th June 2009. Their results show that the Group continued to experience “difficult trading conditions” during this period. This is further evidence that the IT sector has a long way to go before it recovers from the current economic downturn.

Parity Group’s revenue was £62.8m, down from £66.3m in the same period last year. Their operating profit had dropped from £735k last year to £336k in this period. The Group has been focussed on cutting costs over this period. This has included the closure of two offices, in Leeds and Hemel Hempstead.

Chief executive of Parity, Alwyn Welch, made the following comments on the results: “We are continuing to experience difficult trading conditions due to the severity of the recession. Demand for skills in our areas of focus in Resources has held well, whilst the discretionary nature of much of Solutions’ business means that market has continued to see extended procurement cycles, project delays and cancellations.”

He continued: “We expect market conditions to remain difficult during the remainder of this year and the first half of 2010. We will therefore continue to manage with care, balancing the need to retain and motivate our staff and to invest in sales capacity to compete, with the need to be prudent, which has so far delivered a resilient performance in Resources and an improving situation in Solutions. Management’s expectations for trading performance for the year remain unchanged.”