Jana Technology Services Blog

September 22, 2007

Finance crisis ‘will hurt IT contractors’

Filed under: Sales and Business Development,Technology — janats @ 1:34 pm

The number of IT contractor roles in Britain’s finance industry will inevitably decline amid jitters from the Northern Rock credit crisis, a leading IT jobs agency said yesterday.

A management expert also said shock waves from the lender’s implosion will shake the finance jobs market for at least the next 18 months, with IT staff budgets among the hardest hit.But global IT recruitment firm Hudson says demand for financial IT experts could slump as early as this year, causing pay rates to plateau, before they further depress into 2008.

A slowdown in temporary IT jobs looks like an inevitability, the firm said.Economic pressure on IT staff budgets would revert market status to five years ago, when contractors were mainly hired for niche roles, rather than to fill headcount.But for now, there is no evidence that end users facing the shaken finance industry are cutting their spending on IT contractors, consultants or freelancers.

Similarly, contractors themselves aren’t refusing IT roles with financers, but they are asking questions about how these companies responded to the turmoil, Hudson added.Another IT recruitment agency, CV Screen, doesn’t foresee Britain’s financial woes as having a “sudden impact” on permanent or contract IT recruitment.Its managing director, Matthew Iveson, said: “It would be naïve to think that the current credit crunch will not have some impact on the employment market.“But the current signs are that organisations are still feeling bullish and have not put [IT] projects on hold. We are continuing to field enquiries from both existing and new clients.”Positively for the economy, management and IT consultants are yet to be bitten by Britain’s banking crisis, hailed as the most embarrassing for over a decade.

Fiona Czerniawska, director of a thinktank for the Management Consultancies Association, which represents 70 per cent of the UK consulting industry, said confidence among members remains high.“Capital markets is quite a niche segment,” for UK-based consultants, she added, “much smaller than banking and insurance, so it’s unlikely firms would be heavily exposed here.“Longer-term, however, it’s clearly a situation we need to keep an eye on, as it might be the first sign that the recent boom in consulting may have peaked.”

Finance crisis ‘will hurt IT contractors’ :: Contractor UK

We’ve heard comments from numerous consultancy firms that they expect to see a glut of contractors released onto the market that in January and result in better choice for agencies and lower rates…..



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