Crystal Umbrella

Despite relentlessly gloomy recent forecasts about the UK economy’s prospects for growth, placement-hunting contractors working through umbrella companies have some reasons to be cheerful, thanks to a new survey from the Reed recruitment agency. Specialists in IT contracting in particular have more reason to smile than many.

Reed’s latest Jobs Index, which covers the month of October, records a surprising eight-point increase on September’s figure, climbing from 121 to 129. The number of available job opportunities has returned to levels last seen at the beginning of the year, when the economy appeared to be more firmly in recovery. Moreover, employer demand has risen by 23% compared to the same month last year.

While the index surged most vigorously for the voluntary sector (up 43 points), the IT skills market also proved to be in fine fettle, with the sector rising by 24 points. Temporary roles, too, have grown since September, up by 2.5% – a figure that should bring at least some cheer to the jobbing PAYE umbrella contractor.

Reed’s Group Managing Director, Tim Lovell, declared that the October Index recorded the healthiest month-on-month surge in job opportunities for two years. It seems clear that all regions have seen at least some degree of growth.

Mr Lovell went on to say “While recent reports have focused on a north/south divide in employment levels, the real picture is not that clear cut, with strong demand for candidates in both the north and south of the UK. Our job index shows that demand for candidates has increased across all regions, with particularly strong growth in London, and Yorkshire and Humberside.”

IT contracting specialists working through umbrella companies may be heartened to discover that, while permanent staffing opportunities fell last month, temporary billings – especially in the IT skills market, engineering and professional services – climbed slightly, according to the latest REC/KPMG Report on Jobs.

The dip in permanent billings was the first fall recorded by the REC survey in over two years. The report, which is based on a poll of 400 UK recruitment and employment agencies, attributes the decline to hesitancy amongst employers due to the general economic outlook. Even so, successful candidates for permanent posts in October were awarded starting salaries that were broadly in line with previous months.

KPMG’s Head of Business Services, Bernard Brown, said “Nervous employers are placing recruitment decisions on hold amidst concerns over the economic outlook, in many cases choosing instead to plug gaps with temps. There is some positive news with more permanent opportunities in IT, finance and accounting showing signs of improvement. However, we are still on a knife edge as we enter a critical time for European economic stability”

REC Chief Executive Kevin Green hailed the increasing use of skilled temporary workers, such as PAYE umbrella contractors, as “fantastic news”,” not least because many had feared they would suffer due to the implementation of the Agency Workers Regulations in October. He added “This again demonstrates the importance of the UK’s flexible workforce in helping businesses meet fluctuating demand and keeping people in work.”

IT professionals with Java skills were most in demand for permanent posts, and Java experts and business analyst topped the bill in the temporary sector.

We recently reported on the dismal trends facing IT contracting specialists in the banking and financial sectors but new figures suggest that demand in other sectors of the IT skills market is rising healthily.

A new survey commissioned by IT websites JobsAdWatch.co.uk and CWJobs.com reveals that the number of IT vacancies advertised has risen by almost a fifth (19%) in the space of one year, two thirds of which are with outsourcing firms and software houses. Demand is also rising in the retail sector.

Over the last quarter, openings for IT contractors rose by 4.7%, significantly outpacing the demand for permanent posts, which rose by just 1%. Skills most in demand over the last twelve months were ASP (up 22.9%), .NET (23.4%) and Agile (38.6%).

There is, however, something of a regional divide in the distribution of IT contracting roles. Most of them remain in the South, with growth strongest of all in Outer London (5.7%). This was closely followed by Southern England (4.8%) and Inner London (3.8%). By contrast, contractor roles actually fell over the last quarter further North, with the North East experiencing a 2.9% drop and the North West a 0.9% fall.

Unsurprisingly, in the light of severe spending cuts, public sector roles have plummeted – permanent IT roles fell by 40.6%, while contractor roles plunged by 42.2%.

Overall, however, the IT industry is proving exceptionally resilient despite the faltering economy, with advertised vacancies increasing in each of the previous nine quarters.

No one is under any illusions that the UK economy remains in a parlous state but it seems that PAYE umbrella contractors who specialise in the IT skills market may be well placed to weather the continuing gloom for the next three months at least. That’s according to the latest analysis from Price Waterhouse Coopers (PwC) and the CBI, which finds that, while all forms of capital spending over the next quarter will be cut in the financial sector, IT budgets will remain intact.

The main reason appears to be that IT plays a crucial role in eking out efficiency savings for finance sector businesses. End-users will be scaling down their spend on machinery, vehicles, building and land, the CBI-PwC report reveals, in order to safeguard their IT investment plans.

The biggest IT spenders over the next three months will be building societies, most of which plan to fork out more than they did a year ago on applications and systems in a bid to enhance their client retention strategies.

The PwC-CBI study does contain some other, more ominous data, however. Most financial firms, for example, expect to see a slowdown in growth over the next quarter and do not anticipate any improvement in profitability.

Andrew Gray, the group banking leader, said that further headcount reductions were likely in the longer term, as most banks are very aggressive in their approach to controlling costs.

Even so, specialists in IT contracting are used to seizing opportunities whenever they arise and, for the next quarter at least, they look set to be lucratively busy in financial services.

Specialists in IT contracting have good reason to feel optimistic about their prospects despite generally gloomy economic conditions, according to a new report from the prominent cloud computing recruiter Resource on Demand (ROD).

Cloud recruitment figures have risen year-on-year by a breathtaking 52.9%, which should bring cheer to PAYE umbrella contractors with expertise in this corner of the IT skills market. ROD’s Operations Director, Theresa Durrant, maintains that the data illustrates how cloud firms are continuing to invest in their workforces and grow. This trend, she pointed out, is in stark contrast to many other areas of the UK economy, where unemployment has risen to 2.5 million.

She went on to say that she believes the growth in the cloud ecosystem has partly been created by the “tech bubble”, but the expansion is sustainable nonetheless: “Many firms who rely on the cloud are heading towards, or have already made, an Initial Public Offering (IPO) and due to this are seeing initial and continued paths to investment, not least due to the sale of stock to the public that comes with an IPO.”

Moreover, despite figures from the Office for National Statistics which showed an 80,000 increase in the number of people out of work during the last quarter, Durrant believes that the growth in cloud computing will make the industry effectively recession-proof. She added “If there is one sector that can have immunity from a double-dip recession it is Cloud Computing. We are confident of this and are looking forward to another busy 12 months and reporting further growth in 2012.”

PAYE umbrella contractors specialising in the IT skills market are increasingly being sought by US firms, according to research from the online business marketplace PeoplePerHour.com.

The hunger for the UK’s digital talent is greatest in Texas, New York and the home of Silicon Valley itself, California, the study reveals. It also shows that freelancers specialising in IT contracting are concentrated in specific areas of the UK, with London, Leeds, Manchester and Glasgow topping the poll.

IT consultants with skills in three areas are being recruited most avidly by US companies, the figures suggest. These are writing/translation (chiefly copywriting and copy editing for web content), web design (including web programming and application development) and graphic design (including logo design).

Xenios Thrasyvoulou, PeoplePerHour.com’s founder and Chief Executive Officer, maintains that the research shows the UK in a very favourable light, confirming that it has one of the most skilled and talented IT sectors in the world. He added “Our figures show clearly that the UK is producing highly skilled IT consultants. The huge growth in hiring UK IT consultants from the US when both countries have high unemployment shows that the UK staff are not just taking surplus jobs but competing with their US counterparts in a highly competitive marketplace.”

He also found the strong performance of UK talent in highly competitive IT jobs markets such as Silicon Valley especially positive. Silicon Valley is known to attract IT specialists from across the globe. Mr Thrasyvoulou added “This shows that it isn’t just US IT specialists that the UK consultants are successfully competing against but IT specialists from other countries too.”

It has been revealed that the IT skills market is calling for more contractors to have soft skills, including competencies in areas such as financial awareness and people management. The research carried out by CWJobs.co.uk, an IT recruitment centre, showed that whilst contractors were proficient in their IT skills, many believed that they would be more attractive to employers if their soft skills were improved.

Taking a survey of over 1,000 individuals looking for jobs, CWJobs found that 93% of people believed that employers would find them more attractive as business candidates if their soft skills were more accomplished. Having a lack of business acumen and people management skills led 76% of those surveyed to reveal that it was this lack of knowledge that did not allow boardroom positions. An additional 86% said that they would be more attractive to businesses looking at the IT skills market if their soft skills were better.

With IT contracting currently booming in London, there is more work than ever for freelancers with the appropriate skill set. However, a boom could also result in increased competition in the industry, with professionals needing to differentiate themselves from others. Whilst having the technological experience and knowledge is important, having a base of soft skills, including business awareness and people management to fall back on, could just make the difference in gaining a client and going without work.

The London IT skills market is in rude health as the capital rebounds from the financial crisis far more vigorously than just about anywhere else in the UK, according to new research from ReThink Recruitment.

Even though it represents just 13% of the UK’s population, London now accounts for 40% of all new jobs and IT contracts in the country, climbing significantly from the 34% share held before the recession.

Commenting on the figures, ReThink’s Director Michael Bennett told the freelancer news outlet Shout99 “London is quickly emerging as a major hub for high-tech IT start ups – with several heavy hitters including Cisco and Google recently investing in Shoreditch. In comparison with other high-tech centres, London still offers relatively cheap rents and has consequently attracted very specialised tech firms looking to recruit qualified IT candidates.”

It seems that firms offering venture capital – the key source of funding for new tech start-ups – are turning to Europe in preference to Silicon Valley, where investments are considered over-priced. London has benefited from this shift. Moreover, the capital is home to the headquarters of many financial services firms and banks, which are responding to increased business volumes by re-hiring the IT staff they had previously cut during the recession. Umbrella companies supplying experts in IT contracting are amongst the new beneficiaries.

The public sector, by contrast, looks frankly beleaguered. Regions outside London and the South East have lost market share, Bennett believes, because they had relied so heavily on the public sector for IT job creation. Recruitment freezes are already underway and IT projects are being cut, significantly subduing demand for IT skills.

Umbrella companies with specialists in IT contracting on their books may well have found that demand for their services has been outstripping their availability. Findings in a new report from E-skills UK reveals that “The number of advertised vacancies for IT staff rose for the sixth consecutive quarter to 105,000 positions, while the count of ‘ready candidates’ declined to 95,000.”

The IT profession in the UK (a growing proportion of whom work as PAYE umbrella contractors) is at an all-time high numerically, having breached the 1 million mark, the study notes. The positive figure conceals a more troubling fact – in such a rapidly changing sector, only 23% of IT professionals had received training or education in the last 13 weeks, a percentage that compares unfavourably with the average of 27% in other sectors. The feeble economy has taken a toll on small firms in particular, which are more likely to have cut back on skills and training. Only 15% of IT workers in SMEs received training over the same period.

E-skills UK’s Chief Executive Officer, Karen Price, was heartened by the news that IT is contributing so strongly to employment growth in the UK, but warned that greater investment in skills and training was necessary if the trend was to continue. She said “More needs to be done to make fit-for-purpose and affordable training available to employers, and particularly to small businesses.”

Her organisation is actively working with employers to achieve this by developing the National Skills Academy for IT.

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.