Crystal Umbrella

PAYE umbrella contractors on the lookout for new job opportunities may be encouraged to hear that bankruptcies in the UK have dropped appreciably over the last twelve months.

Commercial bankruptcies fell by 31.3 per cent in the first quarter of 2011 compared to the same period last year, with 12,539 insolvencies being reported in the latest Insolvency Service report. Encouraging though this development is, it hardly invites the popping of champagne corks just yet: the figures reveal a slight increase in the level of bankruptcy reported in the final quarter of last year, which reached 12,028.

The first quarter of 2011 also saw a decrease in the number of personal insolvencies when compared to the same period in 2010 – 30,162 people officially became insolvent between January and March this year, representing a drop of 31.3 per cent on last year’s figures.

Umbrella companies supplying the IT skills market have more reason to be optimistic, however, as Monster UK’s latest monthly index reveals a 30 per cent rise in recruitment in the IT sector. The index showed that there were more vacancies in the technical sector than any other field, resulting in many specialists in IT contracting securing placements with client users.

Monster UK spokesperson Isabelle Ratinaud noted that there was a “persistent upward trend” in the availability of openings in the IT skills market.

Both sets of figures follow hot on the heels of new data from the REC, which last week indicated that the temporary labour market had expanded in size during April – news which is likely to be music to the ears of the jobbing PAYE umbrella contractor.

PAYE umbrella contractors working in the IT skills market will be cheered by a new survey produced for the website CWJobs, which reveals that demand for IT professionals rose consistently over the last six quarters.

Commenting on the data, CWJobs’ director, Richard Nott, said that the IT market is “continuing to stabilise,” which is encouraging news for all who make their living through IT contracting. In Q2 and Q3 last year, growth hit 8 per cent and continued rising in Q4, when it reached 5 per cent. 2011 is likely to see continued growth in the sector throughout the year. Even so, Mr Nott cautioned against excessive optimism – the figures are still considerably lower than those seen before the recession hit and a full recovery in the market for IT jobs is still some way off.

The survey coincides with decidedly more gloomy research from GfK NOP, which shows that consumer confidence fell sharply during April, reaching a score of -31 on the index. This is only the third time in the index’s 37 year history that consumer confidence has fallen below -30. The sharpest decline measured was in people’s confidence about their personal finances, which fell to -23 over the last year. It remains negative in outlook for the forthcoming year at -14.

The Managing Director of GfK NOP Social Research, Nick Moon, said that the drop in confidence was bad news for both the government and the economy. The Chancellor’s attempts to spur economic growth in the March budget do not appear to have convinced the public. Mr Moon expressed his concern that, as all five measures of consumer confidence showed a decline, a double dip recession remains a real possibility.

IT contractors working through umbrella companies could be adversely affected by the use of inter-company transfers (ICTs) after the government’s annual immigration cap this month, the Recruitment and Employment Confederation warns.

Designed to ensure that highly skilled non-EU workers can work temporarily in the UK, ICT exemptions might also be used to bring in foreign IT professionals at lower rates of pay than their UK equivalents unless strict monitoring is practised, the REC maintains.  UK contractors supplying the IT skills market are likely to agree.

ICT rules stipulate that all eligible non-EU workers must be skilled enough to attract annual salaries of no less than £40,000 (and leave within five years).  However, the REC reports that some companies are already bending the rules, paying lower salaries by including accommodation allowances as part of the salary package.  They are also including the payment of PAYE contributions as a job-related benefit.  Both artificially inflate advertised salaries to falsely comply with ICT qualifications.

REC spokesman Jeff Brooks supported the ICT exemption system as a sensible measure that introduced intelligent flexibility to the new immigration rules.  Left unmonitored, however, it opens the door to unscrupulous employers to abuse it, he said, adding that there should be strict enforcement of the minimum salary requirement to ensure they do not succeed in falsifying their salaries.

IT contracting has taken off in the UK in a big way and fairness demands that homegrown professionals are able to compete for jobs on a level playing field.  When you consider that two thirds of the people entering the UK under the older ICT visa scheme were IT professionals, the need to monitor that fairness takes on an added urgency.

Umbrella companies supplying professionals in the IT skills market are set for a bumper year in the London area thanks to the 2012 Olympics, according to the specialist IT recruitment company Langley James.

The firm’s founder and director, recruitment expert James Toovey, says that the city’s hosting of the games in 2012 should lead IT professionals across the UK to consider a move to the capital, at least temporarily. IT contracting in particular is likely to experience a major boost in demand, with the Olympic and Paralympic Games generating a major surge in short-term IT jobs ideally suited to freelancers.

Although IT job opportunities of all types will rise, IT specialists looking for short-term contractor posts are likely to be most in demand, he added. The sheer weight of the workload required to get the show up and running on time will feed this demand, as will the amount of time being taken off by people during the Olympics event itself. Temporary vacancies will have to be filled by adequately skilled and qualified staff.

IT professionals sticking to the permanent model of employment will not benefit nearly as greatly as temporary contractors, however, warned Mr Toovey, even though some long-term new ventures will start up on the legacy of the event. Mainly, short-term contractor posts will be available largely because of IT staff taking time off to view the Olympics.

If ever there was a good time for IT professionals to consider a switch from permanent roles to PAYE umbrella contracting, this is very probably it.

Umbrella companies supplying the IT skills market may well have noticed a “huge rise” in demand for contractors with digital skills over the last twelve months, according to a new study.

Recently published research from the freelancer’s marketplace PeoplePerHour.com reveals that while the Government’s public spending austerities have caused a surge in unemployment, the resulting shortage of manpower in the public sector has been offset by a flurry of contractor hiring.

In particular, contractors with digital skills such as search engine optimisation, database development and web design have been very much in demand. PeoplePerHour.com recorded a massive 315 per cent rise in postings for contractors with these skills over the last year.

Xenios Thrasyvoulou, the website’s founder, said that the private sector responded rapidly to the recession by shedding permanent staff and turning to freelancers instead. Thousands of businesses in the UK, he added, quickly understood that the best way to survive the new economic realty was to engage freelancers on time-limited contracts. The decision helped them to “stay lean and remain solvent,” he said.

The public sector, it seems, has taken a leaf from the private sector’s survival book. PeoplePerHour.com’s findings lend support to the PCG’s recent endeavours to encourage refugees from the public sector to consider freelance contracting as an alternative. Contrary to popular belief, the organisation cites evidence that many “ex-bureaucrats” can successfully make the transition from the public sector to the private through contracting. The key obstacle identified by recruiters, the PCG insist, is poor self-belief on the part of ex-public sector employees.

PAYE umbrella contractors supplying the IT skills market are amongst those IT professionals experiencing greater confidence about their career prospects, according to a new poll by the recruitment firm reed.co.uk.

Three out of every four of the IT workers polled across the country are confident that they will be offered desirable roles over the coming six months. Speaking to the news provider “Recruiter” magazine, reed.co.uk’s Head of marketing, Mark Rhodes, said that the attitudes reflect a “slow and steady recovery” in virtually all areas of the private sector since the beginning of 2011. IT professionals appear to be especially positive about the immediate future.

Mr Rhodes went on to say that demand for IT staff is on the rise as more UK companies are “gearing up for a return to growth,” although he anticipates that the sector will once again experience a skills shortage as this trend gathers momentum.

The reed.co.uk poll coincides with data from the pre-employment screening firm Powerchex which reveals that offers for IT contracting in the financial services sector fell by 80 per cent in January. However, the figures also show a rise in contract offers of 3 per cent between January and February, and 8 per cent over the last year as a whole. In a press release, Powerchex MD Alexandra Kelly applauded the stabilisation in the number of confirmed appointments made to IT contractors, which was good news for those seeking contacting opportunities. But, she cautioned: “things have a way to go to recover in this area.”

Freelance contractors working through umbrella companies and limited companies are likely to support suggestions from the CBI, urging the Chancellor to make the determined pursuit of economic growth the top priority for his forthcoming Budget.

The employer’s group believes the government should focus on three key areas: dismantling barriers for high-growth firms, boosting domestic investment spending and enhancing export performance.

In its pre-Budget letter to Mr Osborne, the CBI also urged him to make changes to the tax system, arguing that the 50p income tax rate actively discourages the very entrepreneurship the government wishes to promote. Amongst a raft of other measures aimed at assisting medium to larger enterprises, the CBI also wishes the government to cut back on business red tape. This is discouraging many prospective smaller enterprises from even making a start.

CBI Director-General John Cridland said that the March Budget “must demonstrate a relentless focus on growth to get the UK working again.” An “all-action Budget” was urgently required to boost jobs, investment and exports, he added, with swift decisions on investment in the infrastructure playing a key part in the process.

The CBI’s advice follows recommendations made to the Chancellor by the Federation of Small Businesses last week, which called for policies ensuring economic stability. The FSB believes that only under economically stable conditions can smaller businesses develop the confidence to grow and hire more staff. Amongst the measures it advocated was an extension of a further year to the current National Insurance holiday, and providing finance for micro-businesses to take on apprentices.

PAYE umbrella contractors working in the IT skills market may experience another surge in demand for their services if advice from a leading managed services company is heeded. Advanced 365 has recently urged entrepreneurs running smaller enterprises to embrace cloud computing technology, after a recent survey from PeoplePerHour.com suggested that many SMEs are sceptical about the potential benefits to their business of adopting the model. Almost three quarters of SMEs polled (74 per cent) in PeoplePerHour.com’s study revealed that they do not presently use cloud computing, with 43 per cent admitting that they’re unsure about what, exactly, it is.

Advanced 365’s Managing Director, Neil Cross, said that the figures were “hardly surprising” – cloud computing technology is evolving exceptionally rapidly and the number of options available is proliferating continually, making it a struggle for SMEs to keep up with, let alone understand. He also noted a failure on the part of some value added resellers and IT service providers to promote the commercial benefits of cloud computing, mainly due to their own lack of understanding. This is exacerbating the problem, he believes.

Mr Cross claimed that SMEs are unable to make informed decisions about cloud computing for their business if the advice they are receiving from existing suppliers is unclear. He urged small firms who believe this might be the case to consult a specialist cloud partner for advice. By choosing cloud technologies tailor-made to their specific business needs, Mr Cross added, small companies can reduce costs and improve operational efficiencies substantially, as the cloud typically minimises the cost of in-house IT-management.

If permanent IT posts fall in companies turning to the cloud, there may well be an increase in the use of temporary IT specialists working for umbrella companies who have expertise in cloud technology.

IT experts contemplating the benefits of freelancing may be tempted to walk away from permanent posts and work through umbrella companies supplying the IT skills market, in the light of new research from ReThink Recruitment. IT contracting, it would seem, is poised to see a surge in demand.

ReThink’s study provides compelling evidence that IT directors in the UK have one over-riding priority: staff retention. Of those directors surveyed in the research, a sizeable majority – 85 per cent -  said they were “concerned” or “very concerned” about their ability to hold on to their IT talent in 2011.

A large number of respondents (41 per cent) had expanded their IT headcounts in 2010, and 80 per cent of those polled said they expected to preserve or increase their IT staff this year. ReThink Recruitment’s Director, Michael Bennett, said that the good news for IT experts was that the recovery in both pay and jobs is actually accelerating presently. But good news for the jobbing IT contractor can be a headache for employers, who now face a “very real challenge” in holding on to essential IT staff, according to Mr Bennett.

He went on to explain that the IT skills market does not have a large pool of unemployed IT talent swimming around in it waiting for IT directors to fish them out. Skills tend to be very specific and continually updated, with appropriately qualified people being snapped up very rapidly. This could indeed be a rather lucrative time for salaried professionals to opt for IT contracting.

PAYE umbrella contractors supplying the IT skills market might wish to take heed of recent advice proffered by a leading recruitment specialist on how to clinch the best work placements.  Professionals in IT contracting are widely respected for their technical expertise, but according to Richard Nott, the Website Director of specialist IT recruiter CWJobs.co.uk, this is fast becoming a criterion to be filed under ‘necessary but insufficient.’

Even though there is a significant shortage of IT expertise in the UK at present, IT professionals need to have additional ‘softer skills’ to do well in contemporary businesses.  Mr Nott elaborated on this by noting the new shift toward a ‘much more modern way of working,’ which he believes is demanding good communication skills from IT professionals as well as technical knowledge.

Referring to what he called ‘agile methodology,’ Mr Nott explained that it was now incumbent on IT professionals to develop ’softer’ communication skills in the organisations they work within,  as they are increasingly called upon to negotiate effectively with the commercial part of the business  to deliver the IT projects the company actually requires.  Today, the conventional model of an IT technician ‘sitting in the corner bashing out code all day’ is outmoded; today’s companies require people who can translate that code to the business end in plain, straightforward language and deliver required projects in time with business needs.

IT contractors working through umbrella companies might need to start purging their speech of techno-babble as a matter of urgency.  Those with the softer skills Mr Nott identifies may well find themselves securing the best placements.