UKTECH survey shows contractor to permie shift has doubled

A UKTECH survey has revealed the number of contractors who have closed their businesses to go permanent has doubled since June 2000. The number of contractors out of work has also risen more than three-fold since two years ago.

In UKTECH's June readers' poll, contractors were asked how their limited companies' turnovers had decreased in order to draw a comparison with the findings collected from the same survey two years ago.

The two surveys showed the number of contractors who had closed their businesses to go permanent had risen from eight per cent in 2000 to 16 per cent in 2002, with a massive rise in the number of contractors 'on the bench', from 11 per cent in 2000 to 39 per cent this year.

The number of contractors who had closed their businesses and retired had also risen, from one per cent to five per cent, and those choosing to work less hours and take more holiday (possibly involuntarily if recent reports of forced breaks are included) had halved, from 23 per cent to nine per cent in 2002.

The number of contractors who had changed contract and continued as before was down by almost a third, from 27 per cent in 2000 to 10 per cent this year.

"The good times will return, but being able to predict when this will happen is proving difficult at the moment" - Graham Fisher, Bloor Research

Graham Fisher, Senior Analyst at Bloor Research, said: "Bearing in mind the current state of the job market the figures are pretty much as expected. Of course, the most significant changes are the move towards permanent work and the lack of work. In June 2000 the labour market was buoyant, many contractors would have been fully employed on good rates to tackle the Year 2000 issues and then the rush for an online presence continued the labour shortage which played into the contractors' hands, and those of permanent staff for that matter.

"The fact that twice the number of contractors are choosing to close their business and go permanent is really a reflection that those halcyon days are no longer with us, for the time being at least. This fact is further emphasised by the massive increase in contractors not being able to find suitable work that has increased three fold.

"The uncertain economy means that fewer people are moving jobs, there are more people going for jobs and employers are able to 'cherry pick.' There are general cuts in spending which may delay or cancel many projects and the increased popularity of outsourcing means many organisations are passing work outside, including offshore. These trends have a knock on effect all the way through the labour market. The good times will return, but being able to predict when this will happen is proving difficult at the moment."

June 2000: Finding a contract wasn't the challenge it is now

June 2002: More work (if you can get it), less holiday