PAYE umbrella contractors specialising in the IT skills market may need to brace themselves for a period of pay freezes and budgetary cuts, as more public and private sector organisations seek to pare back staffing costs and place IT spends on ice.
Lloyds Banking Group recently placed a ‘take or leave it’ 10% pay rate cut before its IT contactors. It was, however, merely following a trend – similar pay rate ultimata had already been dropped on IT contracting specialists by RBS, Nomura and UBS. Now, financial services firm F&C Asset Management is planning to shed 70 jobs across its fund manager business, with the brunt of its £33 million cost savings expected to fall most heavily on IT and back office functions.
Moreover, the Financial Times has reported that French carmaker Peugeot is planning to axe 6,000 jobs across Europe by 2012 to achieve an eye-watering £702 (€880) million in efficiency savings, with IT personnel (including contractors) included in the cuts.
The National Audit Office recently discovered similar trends at work in the UK’s public sector, with many temporary IT contracts in the firing line in order to meet budgetary targets. The NAO report suggests that ICT will continue to be subject to “heavy spending cuts” under current economic conditions, and urged the government to “pay more attention to workforce planning, deployment of staff and knowledge management.”
However, as we reported on 18th October, the news is not all doom and gloom for IT contractors, with demand for their services rising in other areas, such as .Net and SAP, as well as the burgeoning growth of mobile technologies.