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IT contractors back in demand

IT contractors back in demand as long term unemployment falls 33%

? IT Contractors see a big rise in job prospects as companies pour investment back into IT
? Expectations for financial services work outpace public sector

Long term joblessness among IT contractors has slumped dramatically over the last six months as business investment in IT gathers pace, reveals new research carried out by giant group plc, the contractor services provider.

According to giant group plc, the number of IT contractors who were out of work for three months or more fell by 33% in the last quarter (Q1 2010).

Six months ago, one in ten (10.1 %) of IT contractors had been out of work for three months or more, compared to just over two thirds (6.8%) who are long term jobless at the moment.

Official Government data shows that investment in IT (hardware and software) jumped 9.2% in Q4 2009.

Matthew Brown, Managing Director of giant, comments: This is a very dramatic drop in long term joblessness among IT contractors. It shows just how deeply IT departments cut back on personnel during the recession and how strongly investment in IT is bouncing back.

After cutting back on IT investment for so long, businesses are now kick-starting projects which were stalled during the recession. Many IT Directors shed contractors over the last 18 months, but are now finding themselves dangerously understaffed as project workloads start to pick up.

Matthew Brown adds: Contractors are often the first to be let go in a recession, but they are usually the first back in the door as the economy recovers. IT Directors are still wary about increasing headcounts, so contractors offer a relatively low-risk way of increasing capacity without incurring additional employment-related costs as demand recovers.

The giant research also reveals that the proportion of IT contractors expecting their earnings to rise in the next year has jumped from 61.4% to 65.8% over the last six months.

Matthew Brown says: Inevitably as demand recovers and joblessness falls we will see a return to end users out-bidding each other for skills, which should lead to rate increases. Many financial services companies slashed rates by around 20% over the past 18 months, so we could see some fairly dramatic pay increases in areas of acute shortage as the recovery gathers momentum.

The giant research also reveals growing confidence among IT contractors of job opportunities in the financial services sector. 25.6% of contractors expect financial services companies to create the most jobs over the next year, compared to 22% of respondents six months ago. The financial services industry has therefore surpassed the public sector in contractors expectations as the sector most likely to create jobs over the next year as concerns over public sector spending cuts grow.

Matthew Brown explains: The financial services industry is traditionally one of the heaviest users of IT skills, so with banks now beginning to increase investment in IT, contractors should benefit enormously. The wave of mergers in the sector precipitated by the credit crunch and the resultant need to integrate IT systems is a major factor behind the resurgence in demand for IT contractors in the financial services sector.

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