Global Credit Crunch & Contracting

28th February 2008

Widely publicised in the media, the “credit crunch” seems to have everyone talking. But what does it really mean and how does it affect the IT contracting market?

What is it?

By the end of 2007, there was talk of a global credit crunch, with stock markets falling and city jobs going. The banking sector in particular was in trouble with the USA sub-prime mortgage collapse. Northern Rock was one of the worst hit, having recently gone into public ownership but not all banks were affected by the events.

Does the Credit Crunch effect contracting?

It’s defiantly not all doom and gloom! While the financial sector may be going through a rough patch, the rest of the economy looks fairly healthy. Although it could be difficult to break into the financial markets for the first time, contractors in particular are far more attractive to employers. There is work to be done but taking on a permanent employee is a risk many financial institutes don’t want to take – contractors are the better option.  If agents have fewer contracting positions in the UK, they start to take clients from overseas, Europe in particular. At BITE we have seen agents actively seeking contractors to work in the UK, a clear indication that the credit crunch is not affecting contractors.

A slight slowdown causes employers to be more selective and therefore standing out with BITE as a professional contractor / consultant becomes yet more effective.

What’s driving the IT contracting market?

The 2012 London Olympics are continually driving the contracting market forward and we have seen a substantial growth in this area for IT contractors. In the run up to the Olympics, the demand will continue to grow especially for skilled contract workers.  Other large scale projects, principally in the public sector, also require contractors and show no signs of slowing down.

Other sectors have seen a steady growth with contracting still accounting for 30% of the total market. The economy in general is not doing so bad, the retail sector remains steady and consumer spending is at healthy levels. There are mixed opinions over the housing market, some say prices are rocketing up, others say down!

How to deal with the issue

Overall, despite the credit crunch, the employment environment remains positive. What’s important is to appreciate the changes and adapt quickly to them, to stand out from the crowd contractors need to be aware of not only the current climate, but how to effectively respond to it. The additional support received from BITE puts you in fantastic position, not only will you stand out from other contractors and appeal to employers, most importantly, you will find great contracting positions.

When the employment market is as it is, you want to make sure you’re selected for interviews, by presenting yourself in the most professional manner possible and impressing clients. Even with years of UK contracting experience, our contractors are able to keep abreast and continue to perform successfully in a dynamic fast paced market. Don’t get complacent, things that worked last year might not this – often the most successful contractors are those that continue to learn and adapt to the market.

“I’ve been contracting for 5 years in the UK, the info I got from BITE definitely helped me, I thought I knew all there was to know, but luckily I picked up a few extra points that got me the job”