24 May 2005

IT contractors poised for rate rise

More than three-quarters of UK IT contractors expect their earnings to significantly increase for the rest of 2005, with new research showing that demand for temporary IT workers is now at its highest level since the dotcom boom. But this, it appears is not being echoed locally.

This is the viewpoint of Org Geldenhuys, a co-founder and director of executive search and IT recruitment company, Abacus Recruitment, who said that employers in South Africa seem keener to "rather employ full-time staff than contractors".

According to an analysis by Giant research, the number of contractors in the UK expecting higher rates (76%) is far more positive than the reaction last year, when about 50% of contractors predicted better pay.

Citing the UK-based publication, www.contractorUK.com, Geldenhuys said the UK is reflecting record levels of confidence in the financial industry and in "a maturing public sector".

The research by Giant observes that the public sector is employing more contractors than the private. "This is creating significant pressure on the sector's budgets and has resulted in many temporary IT workers eying the financial sector for their next posting."

In the UK the financial services sector has traditionally been the principal growth driver for the industry, said Matthew Brown, managing director.

"When things start moving there, times are generally good but what is particularly encouraging about the current market is that the public sector, which tends to be more insulated from cyclical trends, is providing additional ballast." Giant also pointed to Reuters selecting BT to manage their worldwide network as an example of telecoms growth, adding that the gradual uptake of 3G should further cement demand for technical expertise.

Commenting further, Geldenhuys said "the local contracting market is not showing as much enthusiasm. It is not bad, but we are certainly not seeing as much activity from the public sector, for instance. But the Barclays takeover of ABSA bank in South Africa may spark a bigger need for contracting work in the local banking sector as specific skills sets may be required."