Contractors in demand in the City

The financial services sector has leapfrogged the public sector to regain its traditional position as the UK’s biggest user of IT contractors, reveals research by contractor specialist giant group plc. The public sector moves down to second place.

According to the latest giant Contractor Confidence Index (CCI), 21.2 per cent of IT contractors (19.9 per cent six months ago) now work in financial services compared to 20.5 per cent in the public sector (20.5 per cent six months ago).

According to giant, a bounce back in sales of retail financial products, growth in investment banking and hedge funds, and the need to upgrade legacy systems is driving IT job creation in the City.

Matthew Brown, Managing Director, giant group plc, said: "The City shed a lot of IT staff when the stock market fell, many of whom were hoovered up by the public sector as part of the e-government drive.

"Six months ago the public sector employed more IT contractors than financial services - for the first time in its history - but it now looks as if the natural order has been restored and the City is once again asserting its dominance.

"City IT departments are now investing heavily in infrastructure. Projects that were put on hold during the downturn are being revived and financial institutions are hiring to meet demand from regulators."

Growing requirements

However, giant claimed that with the City’s requirements for IT contractors growing, and unemployment among IT contractors very low, the public sector may find it increasingly difficult to recruit IT staff and secure the skills it needs.

Matthew Brown said: "There aren’t many out of work IT contractors for the City to pick up so it’s becoming a question of who will it poach from.

"It will be particularly tough for the public sector to compete with the City on pay and benefits, but if it doesn’t it could face skills shortages. E-government projects tend to be heavily reliant on a number of key individuals who can be very hard to replace."

High confidence

The survey also polled contractors on a range of other issues concerning their current and future job prospects, including earnings growth, unemployment and what they look for in a contract.

The results show that confidence among IT contractors is at its highest level since the survey began nearly two years ago.

Seventy per cent of contractors say their earnings have increased this year compared to 45 per cent who reported an increase last year. Only 6.7 per cent of contractors say their pay has decreased compared to 28 per cent who saw a decline in income in 2003.

Contractors were asked about the average number of days between contracts. According to the research, the number of contractors not working for 60 days or more between contracts is now just 2.8 per cent, down from 3.3 per cent six months ago.