Crystal Umbrella

PAYE umbrella contractors with a fondness for the Emerald Isle may be tempted to move to Cork after computer giant Apple announced a major expansion to its European headquarters in the city.

Apple currently employs 2,800 staff at its Hollyhill HQ, a number that will rise by a further 500 over the next 18 months. The company has been in negotiation for several months about the project with Ireland’s Minister for Jobs, Richard Bruton, along with department officials and IDA Ireland.

Mr Bruton said: “The announcement that Apple, one of the world’s leading companies, is expanding its operations in Ireland and creating 500 new jobs is a huge boost for the country. It is a great testament to the company’s workforce, a great vote of confidence in the future of our economy, and it shows what is possible for Ireland at the heart of a stable Europe.”

IT contracting opportunities are likely to be amongst the new jobs on offer as staffing for online services and technical support is set to grow. The Hollyhill plant, which is located in the north of the city, became the company’s first non-US base when it was built in 1980, and has already seen expansion in the recent past thanks to the soaring popularity of the iPod and Apple’s spectacular resurgence in the PC market.

The plant has not been without its ups and downs: 450 jobs were shed at the close of the 90s, prompting some pundits to forecast that the firm was downsizing in Ireland. Today, however, the story is completely different, with Hollyhill playing a pivotal role in Apple’s European, Middle Eastern and African supply chains.

Contractors in the IT skills market with experience of web design are likely to be eagerly sought after following new research from KPMG, which reveals that a staggering 95% of UK organisations with websites are not ready for new EU data protection rules, despite the fact that the implementation deadline is fast approaching.

Even after a 12-month deferment on the cookie requirements of the new rules, a majority of British firms are still not ready. This places them in the firing line for harsh penalties, which can be as high as £500,000. Websites must now clearly ask visitors for permission to monitor their online habits.

KPMG partner Stephen Boner explained that the new regulations would be enforced in the UK as from 26^th May, but that the vast majority of British organisations still have much work to do to ensure compliance. Only one organisation included in the study had so far got around to asking online visitors to opt-in to its cookie policy. This is the central plank of the EU Directive on Privacy and Electronic Communications, and it is more than a little worrying that so many companies have done so little about it.

Although some sites pepper their visitors with thousands of cookies, the majority use between five and ten – but that is enough to attract a nasty kick in the financial nether regions if permission is not expressly sought.

Mr Boner urged companies to waste no further time in analysing their cookies and drawing up plans to ensure their usage complies with the directive. PAYE umbrella techies stand by: you might find your phones ringing continuously over the new few weeks.

Techies working through umbrella companies in the IT skills market may wish to brush up on their knowledge of the cloud if they want a steady flow of well-paid work in the future. So says the business analysis group Gartner, anyway.

According to Gartner, cloud computing is on the rise across the world and now represents new generation technology. Ominously, the group warns that unless IT departments keep abreast of developments, they are likely to become as defunct as the proverbial dodo. The way forward, Gartner suggests, is for IT departments to start functioning as cloud brokers, working as intermediaries while their companies make the transition to cloud systems.

Last year cloud brokerage gathered momentum as a model and the group believes it is bound to accelerate over the coming five years. It requires IT heads to create purchasing strategies aimed at cloud adoption and to encourage other departments within a company to approach IT experts whenever they require support and advice. Enter the trusty IT contractor with well-honed skills in cloud computing.

There is plenty of work to be done, as it happens. Gartner’s Research Vice President, David Mitchell Smith, believes that transferring current operations to cloud systems is only the first step. Firms will also need to develop special applications suited to the new cloud environment if they want to get the best out of the new environment.

The moral of the story for specialists in IT contracting? You will remain very much in demand if you evolve your skills to keep up with the latest in cloud technology.

Specialists in IT contracting enjoyed strong demand in January and February this year, but new data from the REC suggests that the hiring spree is cooling off.

In March, demand for contractors specialising in the IT skills market dropped to 52.5, a small but detectable fall-back from February’s score of 53.9 (the highest score in six months). In March 2011, IT contractors had topped the poll of most sought after temporary candidates, reaching a score of 63.8. They have now slipped into third place out of seven categories, narrowly missing second place, which went to freelance engineers.

However, PAYE umbrella techies need not feel personally affronted: the latest REC/KPMG Report on Jobs suggests contract billings in toto fell last month at a rate faster than that seen for over two and a half years. Demand for permanent IT experts remained strong, especially in areas such as CAM, CAD and development skills where there are full-time shortages.

The REC’s member agents believe that the slight depression in temporary contractor billings can be attributed to the cumulative effects of the Agency Workers Regulations. Recruiters for contractor and permanent staff frequently reported that hirers have responded to the AWR by converting formerly temporary roles into permanent ones.

Acknowledging the slight decline in temporary appointments, the REC’s Director of Policy and Professional Services, Tom Hadley, said:

“This may in part be linked to employer uncertainty over the Agency Worker Regulations, although it could mainly be due to the fact that increasing business confidence has resulted in more employers being prepared to take on permanent hires rather than temporary or contract staff.”

Despite recent research by Adecco suggesting that 2012 may be a prosperous year for the UK’s IT contracting community, the chances are that they are going to have to work a lot harder for their money.

This is according to a new survey by the specialist IT recruiter ReThink Recruitment, which reveals that although 90% of the IT directors polled anticipate greater workloads during the coming year, only 39% expect to have bigger budgets. Many fear that they will be unable to get business-critical projects off the ground: this is the third year running that budgets have fallen behind the expansion in workloads.

The net effect is that PAYE umbrella contractors specialising in the IT skills market are toiling away for longer hours to meet increasingly impossible deadlines with no corresponding increase in income.

The ReThink survey polled IT directors from firms with 250 or more staff members – and the evidence is that several years of Scrooge-like austerity has hit IT departments hard. The pressure has been to push pay rates down but the predictable consequence of such an approach is that key talent just is not sticking around. Losing your best techies is hardly a recipe for business success.

In the past incentives could be offered to skilled contactors to keep them on board, but this option is disappearing for many IT heads, with the consequence that their most valuable staff are being poached by rival companies with bigger funds in their talent war chests.

32% of the respondents reported that their budgets had actually fallen last year; however, 43% said that their budgets had increased on the previous year.

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.