December diluted IT contractor demand

A slowdown in demand for their services hit IT contractors in December, due to what a consensus of recruiters suggest is a ‘perfect storm’ of factors.

First flagged up in November by APSCo, the slowdown began with a 33% annual drop in the number of IT contractors working via the trade body’s member agencies.

This third fewer IT contractors on-assignment compared to the same time in 2016 has held steady thanks to a nine per cent dip in the stock of new IT contracts on the agencies’ books.

‘Uncertainty’

December can be a quiet time for IT contractors, as decisions around budgets and projects get put on ice until the New Year. Written contracts are also often dated until the year-end.

But APSCo believes the season is only partly to blame. “Amid uncertainty around Brexit”, it says, “employers are more concerned about an exodus of talent than a demise in demand.”

So a “very uncertain” hiring situation due to Brexit saw end-users in December ‘lock-in’ IT staff for 2018, says Staffing Industry Analysts, following IT contractor lock-ins in October. 

‘Slower’

“Businesses are moving away from the contingent workers that they leaned on in times of greater uncertainty,” said Association of Professional Staffing Companies boss Ann Swain.

Non-APSCo agency First Point Group, which places IT contractors agrees: “December was indeed slower in terms of placements made, but for us that is traditionally the case.”

However, the agency’s London office also said it still saw a “strong upswing” in new contract instructions, albeit in the latter part of December and particularly for telecoms contractors.

‘Bucking the trend’

Another contract IT jobs firm Networkers, says it didn’t see any slowdown at all: “[We] must be bucking the trend. Definitely [we were] busier than last year [throughout December]”.

Asked where it placed IT contractors the most, the firm cited Project Management (“plenty of new roles”), IT Security (“and related”) and Data Governance (“a few more” than last year).

IR35

Yet on top of Brexit and the year-end traditional softness in recruitment, APSCo believes that its 33% fall in IT contractor placements “may, in part,” be down to another factor -- “changes to rules around off-payroll working in the public sector.”

But Swain reassured: “[The] news [from Autumn Budget 2017] that the government will not automatically extend these reforms to the private sector without careful consideration should ensure the wider contract market remains strong in the near future.”