Crystal Umbrella

It has been revealed by the Recruitment and Employment Confederation (REC) that, with many companies reducing their plans to expand permanent staff, independent contractors are set to benefit. With the economy’s future remaining uncertain, the next quarter will see more temporary workers taken on as firms look at payroll outsourcing and IT contracting instead of having in-house staff.
With the economy remaining turbulent, it was shown that, in respect to staffing over the next three months and indeed the next year, plans envisioned at the start of the year to add employees to firms are to be downgraded. The result will see increasing work for temporary staff and independent contractors.

Director of research at REC, Roger Tweedy, explained that the downgraded company plans were an indication of the “uncertain economic context.” He added “With the economy continuing to stagnate, businesses will understandably remain cautious, which is why we are seeing an increase in the longer term demand for flexible staff, such as temporary and contract workers.”

With 83% of firms revealing that contract workers would stay at current levels or increase over the coming year, the future looks bright for contractors. Over the next quarter alone, 79% of employers said temporary staff would be boosted or held steady at a minimum. With payroll outsourcing and IT contracting two specific areas that are being utilised by firms to cut costs, those in these sectors are set to see rising amounts of freelance work.

The NHS is seeking highly skilled specialists in IT contracting working through umbrella companies, according to data from the international recruitment firm Badenoch and Clark.

Contractors in the IT skills market who have knowledge of NHS data systems and SQL server business intelligence are experiencing increased demand for their services, figures contained in Badenoch and Clark’s latest Talent Spotlight reveal. The company’s Operations Director, Mark Gascoigne, says that NHS Trusts based in Birmingham are creating new NHS datasets and are on the lookout for skilled information analysts as a result. The health service needs to develop more robust data warehouse solutions and business intelligence, Mr Gascoigne explained, both of which are driving demand for IT contractors.

In London, numerous NHS Trusts are attempting to complete major projects and are seeking data migration professionals, especially those with testing and training experience in RiO and Cerbner, he added.

Outsourced work for IT professionals may also be more generally on the rise. Technology sector analyst Ovum claims that the utilities sector, which is known to be squeezed for cash, is reluctantly outsourcing IT work in a bid to keep the long-term costs associated with permanent positions to a minimum. Hiring PAYE umbrella contractors and other skilled freelancers is about the only option they have to keep permanent headcounts to a minimum.

The rise in outsourced work is hardly a tidal wave – Ovum’s Principal Analyst Stuart Ravens described it as small but significant – but it is a trend he believes will increase over the coming year. Utilities companies are beginning to realise that outsourcing must be given serious consideration.

PAYE umbrella contractors with expertise in the IT skills market should consider placements with small tech firms, according to one expert who believes they provide exciting opportunities for tekkies.

Ian Hogarth, the Chief Executive Officer of the music website “Songkick,” claims that smaller companies emerging in the technology sector can deliver a stimulating and stable working environment for freelancers specialising in IT contracting. Songkick itself represents one of the success stories for such firms – launched only four years ago, it’s now a thriving enterprise.

But Hogarth’s invitation came with a note of caution: economic circumstances remain extraordinarily difficult for small businesses in particular, and small tech firms have not received sufficient government support at the crucial start-up phase. With government backing, however, he believes they could easily become a highly attractive option for the UK’s best IT talent.

He urged the coalition to do all in its power to assist start-up tech firms to flourish. This would help stop the bigger companies from mopping up all the leading IT talent and help the crucial smaller business sector to drive employment upwards. He said, “We’d like to see the government promote start-ups as a stable, legitimate and exciting option for graduating software engineers.”

Hogarth drew attention to a disturbing fact – even though the UK has some of the finest educational institutions for engineering in the world, most of the country’s top engineering graduates end up joining a management consultancy or a bank. Too many IT graduates think that jobs in software development with a new company are still too risky and they want a more secure option. Adequate government support would dispel this fear, Hogarth believes, and attract talented software engineers – the “lifeblood of tech start-ups” – toward working in new firms.

IT contracting in the financial services sector continues to have decidedly healthy prospects, new research suggests.

The study from the contractor service provider Giant Group suggests that insurance firms and banks are boosting their IT expenditure, a development that hasn’t gone unnoticed by many PAYE umbrella contractors in the IT skills market. A third of IT contractors believe that it will be the financial services sector where most IT jobs will be found in the coming year – a significant rise from the same time last year, when only 8% of those polled felt that way.

The number of contractors anticipating that the public sector will produce the most jobs has virtually halved, plunging from last year’s 17% to today’s 9%. In 2008, the proportion was a positively buoyant 30% but the government’s austerity measures have since taken the wind out of the public sector’s sails. With public sector opportunities evaporating, the finance sector is becoming considerably more important to specialists in IT contracting.

Experience and skills in cloud computing will be especially in demand, according to the Giant Group’s Managing Director, Matthew Brown, who believes the evidence now suggests that banks are “ramping up spending again” after the recession, during which they pulled out of many IT projects.

In addition to efforts to improve productivity through cloud computing, banks also have to deal with new regulations aimed at making them more transparent. Brown believes this, too, is driving demand for IT contractors.

The research heralds a welcome change in fortune for IT contractors, who suffered acutely during the depths of the financial meltdown.

The latest Report on Jobs published by REC and KPMG may not cause many PAYE umbrella contractors to break open the champagne, but it brings modestly encouraging new nonetheless. Recruiters reported that contractors working for umbrella companies were still in demand during July, with both temporary billings and permanent placements rising moderately.

Pay rates also rose from the low-point reached in June but remain subdued. Contractors in the IT skills market will be reassured to find that workers in that sector, along with engineering and construction, were the most sought after. Moreover, the supply of permanent candidates reached the best level in 18 months, while temporary availability hit its strongest point since February.

Commenting on the figures, the REC’s Chief Executive Kevin Green said ”This month’s Report on Jobs shows that the rate of jobs growth in July quickened from June’s figures. These figures show that the jobs market is continuing to perform well despite general weakness in the UK economy.  We have now had two years of continuous growth and employers are still continuing to hire staff, albeit not in the numbers needed to radically reduce unemployment.”

Mr Green added that the key reason why employment is continuing to grow even in difficult economic circumstances is the UK’s flexible labour market – employers are increasingly turning to temporary workers and “continue to see the value of using a flexible workforce.”

KPMG Partner and Head of Business Services, Bernard Brown, noted that, although the jobs market hasn’t deteriorated, employers in all sectors continue to be cautious about taking on new staff. Government cuts and falling real wages continue to depress domestic demand, he added.

PAYE umbrella workers specialising in IT contracting could again find a surge in demand for their services following the implementation of a new European e-privacy directive, which became law in the UK on 25^th May. Yesterday we reported that the UK’s restaurant industry is poised to seek input from IT professionals to help them develop new mobile technology; they are also likely to need assistance with the e-privacy rules, as indeed will any company with an online presence.

The directive obliges firms with an online presence to gain explicit user consent before using cookies – the information that websites place on users’ computers to track their online activity. But one specialist insurer has warned that while there is uncertainty about the enforcement of the legislation, companies should act now to develop clear policies governing their use of cookies. Many website operators who routinely use cookies will be seeking assistance from contractors in the IT skills market to ensure their sites fully comply with the directive.

Alan Thomas, who is head of Technology and Media at the specialist insurer Hiscox, warned that there was “a great deal of uncertainty surrounding the enforcement of the new European e-Privacy Directive but the message to companies using cookies is clear: don’t allow a half-baked approach to cookie consent expose your company to prosecution.”

He went on to say that the issue of cookie consent is an emerging risk for UK businesses, especially those in the technology and media sectors. Companies must appreciate the importance of developing a clear policy for cookie use, he added.

Umbrella companies may well find their IT contracting specialists seeking placements in the restaurant industry after one expert called for it to embrace new mobile technology.

Andris Bezins, who is Chief Marketing Officer at Livebookings, Europe’s largest online reservations service for the restaurant industry, urged restaurateurs to make use of mobile technology in order to maximise their business potential.  In today’s 24-7 world, consumers increasingly want access to services at all times, and Mr Bezins believes that it’s now essential for restaurateurs to take this fully on board, shifting their business model in line with changes in customer wishes and behaviour so that the best quality user experience can be delivered.

He went on to explain that his company’s index study reveals that mobile technology is driving a major expansion in online reservations throughout many European markets today.  Mr Bezins believes that this is largely attributable to the burgeoning popularity of smartphones across Europe, which in turn has “fuelled the growth of mobile reservations.”

In response to the trend, Livebookings has recently launched a new mobile platform known as “Pocket Diner”, which is designed to help restaurants to maximise all booking channels.  Mobile technology can help drive profitability and footfall, Bezins insists, complementing a restaurant’s existing online presence.  Pocket Diner “creates a mobile-optimised version that’s suitable for devices like the iPhone and BlackBerry,” he added.

PAYE umbrella contractors with experience in mobile technology could shortly find themselves much in demand in a new corner of the IT skills market – the restaurant business.

PAYE umbrella contractors working in the financial services sector may draw some cheer from new research released by the specialist recruitment company Marks Sattin. Salaries amongst financial services professionals rose by 8 per cent during 2010 and are predicted to rise by 13.5 per cent this year, the figures suggest.

Dave Way, Managing Director of Marks Sattin, said that the recession had suppressed salary increases last year as employers sought to restore their margins. If similar trends continue into 2011, he explained, salaries may only rise by a similar amount (8.5 per cent) but there are signs of optimism amongst professionals in the sector that business will pick up. Mr Way added a cautionary note, however, and suggested that hopes for salary rises of 13.5 per cent be “over optimistic.”

Contractors used to working in temporary placements through their umbrella companies may be heartened by the study’s finding that pay rates for temporary staff in financial services remained higher than those for permanent staff and freelancers on long-term contracts.

The Marks Sattins study contrasts somewhat with new figures from Powerchex, which reveal that the two 4-day weekends in April resulted in a sharp decline in recruitment in financial services. Investment banking jobs declined by 30 per cent during the month and there was less recruitment activity in hedge funds and stockbroking. Even so, recruitment for investment banking countered the general trend by rising 19 per cent above the previous month. IT contracting, though, has undergone something of a recruitment bonanza, with 75 per cent more vacancies in the IT skills market compared to the same time in 2010. Companies seeking improved data security accounted for much of this growth.

Umbrella companies supplying contractors to the IT skills market may find themselves moving into the retail sector in the light of new figures from the recruitment firm ReThink Recruitment.  Demand for IT professionals has soared in the sector, more than doubling in the space of a year: ReThink received 218 requests for candidates with IT skills in the fourth quarter of 2009 but this had leapt to 564 by the same quarter of 2010.

Iain Blair, ReThink Recruitment’s Director, attributes the rise to increasing retail competition in providing mobile, multi-channel online and home delivery customer services.  This has not only increased demand for IT professionals but has also pushed up their pay rates, he observed, adding that IT specialists with e-commerce experience “are now commanding up to a 24% pay premium over colleagues in equivalent roles in other sectors”.

By way of comparison, programme managers in other industry sectors can secure pay rates of around £685 per day at present; in retail, by contrast, programme managers with e-commerce experience can expect to be paid £850 per day.  Project managers and business analysts can also command similar pay rates in the retail sector, ReThink Recruitment believes.  Blair was forthright in his assessment, declaring that “E-commerce and financial sector IT skills command the highest salaries.”

Retailers such as Morrisons, Waitrose, and John Lewis have driven the demand for IT skills as they seek to expand their home delivery services.  In addition, there may be even greater demand for IT skills in the sector – according to a report by Martec, 19 per cent of retailers intend to replace their e-commerce platforms over the next twelve months and a further 5% are planning to acquire an e-commerce platform for the first time.

PAYE umbrella contractors working in the IT skills market will be well aware that cloud computing technology is on the rise but, according to a leading security expert, it may also pose a “huge risk” for some businesses.

Hewlett-Packard’s Senior Director of Products, Application Lifecycle Management Software, Subbu Iyer, was speaking after the release of a report from the EU which endorsed cloud computing enthusiastically, highlighting its potential cost savings and the revenues associated with the technology. But Mr Iyer points out that many small firms who may be considering the technology are unlikely to have a security information team, a deficit which could expose them to significant security risks.

IT contracting may see something of a surge in demand as a result, as increasing numbers of firms seek to benefit from the cloud’s advantages. But My Iyer was at pains to highlight the “substantial risks” faced by newcomers to the technology, adding that security, availability and performance are regularly cited as the top three concerns inhibiting the wider uptake of cloud computing.

Number one on the list, Mr Iyer noted, was security. “It’s a huge concern,” he added. If companies are moving a critical business process completely onto the cloud, he continued, “the first area that chief information officers are concerned with is, ‘Is it secure?’”

Iyer believes that security concerns are playing a major role in both cloud technology and mobile computing – both of them central to the new economy. “There are a lot of applications being purpose built for mobile phones,” he noted. “How do you ensure that those are secure?”