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Margins on temporary and contract staff fell for the seventh month running in November, with the rate of decline the sharpest since the Recruitment and Employment Confederation's (REC) Report on Jobs survey began in October 1997. Consultancies generally linked the latest squeeze on margins to weaker demand for temporary staff and intense competition.
The most recent REC report shows demand for temporary IT/ Computing, Engineering/ Construction and Executive/ Professional staff to have fallen at their sharpest rates since the survey began. Demand for contract workers in the IT sector ranked eighth out of eight sectors at 35.1 per cent. Last November demand was at 53.5 per cent and ranked in seventh place.
The availability of contract workers rose for the seventh consecutive month in November, rising at the fastest pace since REC's survey began. Just under 46 per cent of all recruitment consultancies reported an improvement in the availability of temporary workers during the month, largely as a result of weaker demand for staff from employers and fewer incidences of skill shortages.
Significantly weaker demand was reported for all main categories of permanent staff in November- a marked contrast to the buoyant growth of demand seen a year earlier. Indices showing demand for permanent Engineering/ Construction, Hotel/Catering, Executive/ Professional and Secretarial/ Clerical staff all fell to survey lows. However, the sharpest rate of contraction in demand for permanent staff was again seen in the IT sector, where another drop was recorded for the seventh consecutive month.
Demand for permanent staff for November in the IT sector was recorded at 30.3 per cent, ranking eighth out of eight sectors. This time last year it ranked in second place at 65.4 per cent with No key permanent staff skills were reported in short supply in the IT sector. The Engineering/ Construction sector showed demand for Engineers.
As with the permanent market, the REC Report on Jobs this month similarly failed to mention any demand for IT workers, with only 'railway workers' listed under demand in the engineering/ construction sector.
Recruitment consultancies reported the weakest increase in average hourly rates of pay for contract workers in the survey's history in November. Growth of temporary staff pay has slowed significantly since the middle of 2000 to near stagnation in November, reflecting pressure from clients to reduce costs in view of deteriorating economic conditions and the ability of an increasing number of consultants to offer lower pay due to greater staff availability.
Jobstats, reports the change in the number of job adverts for IT workers since the end of November to be down six per cent on the previous month. This shows a slowdown in the rate of contraction, where percentages from the three months before this on e showed drops of 52 per cent, 61 per cent and 45 per cent consecutively.
According to the online rates site Jobstats, the average hourly rate quoted is £24 per hour for IT contractors and £36,800 per annum for permanent IT staff.
Still waiting for the first signs of an upturn |
Support 20.6 per cent - Average rates: £18 per hour/ £33,300 per annum
Design 16.7 per cent - Average rates: £33 per hour/ £38,700 per annum
Management 15.2 per cent - Average rates: £29 per hour/ £40,600 per annum
Unix 14.9 per cent - Average rates: £37 per hour/ £38,400 per annum
SQL 12.3 per cent - Average rates: £30 per hour/ £35,300 per annum
The top five locations are:
London 23.9 per cent - Average rates: £25 per hour/ £43,900 per annum
City 6.2 per cent - Average rates: £22 per hour/ £48,000 per annum
Berkshire 5.9 per cent - Average rates: £26 per hour/ £39,000 per annum
Surrey 4.5 per cent - Average rates: £27 per hour/ £36,700 per annum
Hampshire 3.5 per cent - Average rates: £15 per hour/ £35,500 per annum
(Note: Hourly rates refer to contract positions, annual rates to permanent)
Another stats website, TheSkillsMarket.com, reports the following top 15 areas of demand and their corresponding rate for contractors in the IT sector: (Average rates per hour)
1/. MS Project- £53.14
2/. Oracle- £50.78
3/. JAVA- £49.17
4/. OO Analysis and Design- £49.05
5/. UNIX- £47.92
6/. IBM Operating Systems- £46.36
7/. JCL- £44.38
8/. MS SQL Server- £43.98
9/. MS Visual Basic- £43.82
10/. Systems Testing- £43.33
11/. MS Access- £43.33
12/. VB Script- £42.90
13/. COBOL- £42.18
14/. ASP- £40.11
15/. JavaScript- £39.09
Daniel Elkins, CEO at TheSkillsMarket.com, said: "Almost 70 per cent of IT professionals have reported to us that they’ve been affected by the economic downturn, whether this is a pay cut, redundancy or a decrease in demand for their skills. We’ve seen a surge of highly experienced and skilled IT contractors enter TheSkillsMarket looking for work and prepared to except lower rates than before. Programming languages such as C++ and Java remain the skills which recruiters have the highest demand for and Oracle and Java are currently the highest paid skills earning an average of £50.78 and £49.17 respectively."
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Richard Powell, Shout99
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