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The Agency Low-down: Part 1 - Where the work is...
by Richard Powell at 10:48 08/01/03 (News on Agents)
Shout99.com interviewed a number of UK-based IT agencies to find out where the work is, what the state of rates and margins are and when the recovery will arrive. In part one, we investigate which skills are hot and where UK freelancers are working.
Government projects are responsible for some of the best success stories in the recruitment industry at the moment, according to some of the agencies who took part in 'The Agency Low-down'.

David Bloxham, Operations Director at GCS Computer Recruitment Services, said: "PC Support, Low-level Network and Helpdesk Win2000 and XP freelancers for local Government migration projects are very popular for us at the moment, as are freelancers skilled in .Net.

"We're sending a lot of freelancers to France; and Amsterdam, where we've just opened a new office at the moment, but 90 per cent of our work is still coming from the UK, mainly from the public sector."

Stuart Ferguson, Managing Director of Optimum IT Plc., said: "We've got a huge demand for SAP and Peoplesoft Developers in the HR and Payroll sectors in Holland, Spain and Belgium. The Europeans tend to stick with package software, whereas UK clients are becoming increasingly interested in open source. Demand for package software developers represents about 70 per cent of the business we're placing at the moment. Our remaining business is in placing freelancers in the South East of the UK, M4 corridor area - in: Java, C++, and a lot of UNIX developers, mainly in Government projects. These include projects at the Inland Revenue, Department for Education and Skills and Department for Environment, Food and Rural Affairs, also Strategic Rail. Only about 20 per cent of our freelancers in the UK are working in the City in the telecoms sector."

"Placing freelancers is difficult for us at the moment"
Henry Lee, Sentinel IT
For some agencies there has been a notable shift in business being conducted at home and abroad over the last couple of years.

David Sen, Senior Consultant for Development at Paragon IT, said: "We're starting to do more business in the UK now - which is continuing a trend that stretches back about six months. In the six-month period prior to this, much of our business was being conducted in Europe. Most of our freelancers worked in: Germany, Belgium, Holland and France. The reversal in business being conducted here rather than in Europe at the moment looks like things are getting better in the UK."

Regarding the skills sets Mr Sen is having success placing, he added: "Development projects for us are still Web/Java focussed - there's been a steady demand for freelancers with these skills sets - mainly in the public sector as opposed to the financial sector, but obviously the markets continue to be more deflated than they were 12 months ago."

Henry Lee from Sentinel IT, a niche agency that provides clients with Middleware specialists, Cognos, SAS Programmers and Data Management freelancers to the pharmaceutical industry, had experienced the opposite, with a swing towards conducting more business in the UK again.

"Placing freelancers is difficult for us at the moment," he said. "We're around 40 per cent down on the number of placements we were making at the peak of the dot com boom. Most of our business has been in Europe over the past two years, but competition has become very hard on the Continent and at the moment 85 per cent of our business is being conducted back in the UK. We're also doing some business in Switzerland."

Andrew Pike, Corporate Accounts Manager at Generic Software, said: "Things are as difficult now as they have been for the past 24 months, but we're still placing quite a lot of freelancers into Support, Legacy and Testing roles and there's quite a bit of client server development work recently.

"Ninety per cent of the business we're currently doing is in the UK, but we are also providing Programmers to France, Germany and the Netherlands (last year this was mainly Spain and Luxembourg)."

A recruitment consultant at Best International, said: "We've been placing quite a few project administration, C++ and Linux programmers and SQL guys, mostly in the City."

Some freelance workers, frustrated by the lack of projects available, look for work in the permanent sector. However, clients fear they will 'jump ship' when the market picks back up.

Some agencies are continuing to promote freelancers into the permanent sector. As Tim Barton, Director of ARC Recruitment, illustrated in August last year: "Sometimes only ex-contractors have the high level of experience required for these positions. I've placed a couple of ex-contractors in permanent roles before and they're still there three years on, so historically we've built up an element of trust."

This could well be a trend that continues in 2003 depending on whether more work is made available for the freelance sector. This is also dependent on whether clients can get over their phobias that freelancer workers who go permanent will 'jump ship' back into freelancing when the market picks up again.

The Association of Technology Staffing Companies (ATSCo) and iProfileSkills recently published a report that showed significant increases in the market value of five key skills - C++, Java, MS SQL Server, MS Visual Basic and Unix - since September.

The report said the skills had experienced a 14 per cent increase in hourly freelance rates. The increase in annual salaries for permanent employees in those sectors was put at 10 per cent.

In part two of 'The Agency Low-down’ series, to be published tomorrow, agencies talk about their rates and margins.

Richard Powell, © Shout99.com 2003

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