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The Low-down: Part 3 - Agencies' outlook for 2003
by Richard Powell at 15:37 14/01/03 (News on Agents)
In the final part of our series examining recruitment agencies' opinions of the current IT freelance market, Shout99.com finds that war with Iraq, a housing market crash and a drop in consumer confidence represent some of the threats to growth in 2003...
Related articles:
  • The Agency Low-down: Part 1 - Where the work is...
  • The Agency Low-down: Part 2 - Rates and margins...
  • The last part of Shout99.com's 'The Low-down' series reveals some general thoughts from agencies, as well as some specific views on when we can expect a market upturn. There is also some useful advice for freelancers who are finding it hard to secure work in the current industry climate...

    Andrew Pike, Corporate Accounts Manager at Generic Software, said: "I'd like to think there's going to be an upturn this year, but there are so many factors that stand to influence this, including war with Iraq, which would certainly put development work on the back burner. If things stay as they are at the moment, then there might be gradual growth throughout the year - I don't think there's going to be a jump mid-year. Most of the work stands to come from the banking and financial sectors who can't be seen to have any sort of edge over each other. Our clients have said provided there are no dramatic changes in the economy, there will be further development work in 2004, but not before."

    Henry Lee from Sentinel IT, said: "We're not expecting a mid-year recovery as some analysts have predicted. It might creep back up towards the end of the year, but this will be factored in with whether there's war with Iraq, what house prices do and consumer optimism."

    A consultant with Best International, estimated an upturn would most likely happen mid-way thought the year. "We're certainly confident we're not going to do any worse than last year and we're hoping to push forwards," he said.

    Other agencies' optimism rested on the performance of other industry sectors...

    Stuart Ferguson, Managing Director of Optimum IT Plc, said: "In terms of an upturn, it's going to be reliant on the economic outlook. I think there's going to be a rise in business with risk management companies (in London), the equities market looks set to stay the same - generally the City will be hard to work with. I also think we're going to see a lot more rates cuts on top of the rates cuts that have already been introduced. Traditionally our business has been 80 per cent in the UK and 20 per cent in Europe, but this is going to reverse this year and soon we will be doing half of all business in Europe.

    "Basically, it's going to be another very tough year."

    David Sen, Senior Consultant (Development) with Paragon IT, said: "I think the market will pick up in the next few months if the economic climate is shaken up too drastically by war with Iraq, certainly things are looking better at the moment than they were in the fourth quarter of 2002."

    Some agencies were able to pinpoint where their strongest skills sets were and gave specific advice for struggling freelancers...

    David Bloxham, Operations Director, GCS Computer Recruitment Services, said: "It's difficult to say when the upturn is going to be, but if you keep yourself trained in skills in demand, which for us are .Net and MS technologies and remain flexible on your rates you'll be able to hunt out the work, because there are good pockets of demand around if you know where to look.

    "Looking at our guys, the advice I'd give freelancers in the current market is: be flexible; have a willingness to go the extra mile, and I say that knowing freelancers get paid more because they do this anyway, so go the 'extra, extra' mile and really make yourself stand out; focus on the market, and take contracts you would never have taken a couple of years ago if it helps you keep a full CV; and finally, build up a close relationship with your agent. This is very important because there are so many freelancers looking for work that we almost have a preferred supplier list, something only the client had the luxury of historically."

    The sheer numbers of workers currently looking for work in the IT industry was revealed last month in a report from e-skills UK, the national IT skills barometer, which put the figure for both permanent and freelancers at 162,000.

    Mr Bloxham concluded: "Keep in touch with us and let us know what you're doing so you are our first choice."

    Not all agencies are so amenable when dealing with freelancers, as a survey conducted by the skills statistics website, TheSkillsMarket.com, found, last July.

    It said: "the quality of the service given by agencies still has a lot to be desired at a time when the recruitment industry becomes vital to the increasing numbers of IT professionals that are out of work."

    It found 70 per cent of UK IT workers had been sent to clients for jobs or projects irrelevant to their skills sets, with only 12 per cent of respondents saying the service they had received from agents was 'good.' Forty-five per cent said it was 'average' and 44 per cent reported service to be 'poor.'

    Don McLaurin, Chief Executive of the National Association of Computer Consultant Businesses (NACCB), a US association representing IT recruitment companies, told delegates back in November, 2001, that there was a severe short-term decline ahead, but that longer-term growth was still predicted at between 15 per cent and 19 per cent a year to the year 2005/ 2006.

    He said: "It's been a great ride for ten years, but all we're doing now is regressing to the mean. We're getting back to normal and that was inevitable. For us, even if we put 'normal' at about 10 per cent growth- it's a figure most other industries would envy. The fact is there are a lot of people in our sector who have an unrealistic view of what is normal, and they've never worked through a recession. Their expectations have to be re-adjusted."

    Please use the comment facility at the bottom of the page if you wish to comment on this or any of the other 'Low-down' articles.

    Richard Powell, Shout99.com 2003

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    The Low-down: Part 3 - Agencie... Richard Powell - 14/01
        The Low-down: Part 3 - Agencie... steh - 14/01
           Rates daveyboy1033 - 16/01
              Re: Rates geoffm - 20/01
                 Agents anthonyenglish - 21/01
                    Anticompetitive ? mikew - 21/01
                       Agents will be here to stay anthonyenglish - 21/01
                       No, but a conflict of interest geoffm - 21/01
                          A Third way anthonyenglish - 21/01
                             Enlightened agency - repost mikew - 21/01
                                Downturn anthonyenglish - 21/01
                                   Glasnost mikew - 21/01
                                   Articles saying IT is still a ... AndyBarnes - 18/02
                                      Well paid IT a fiction mikew - 18/02
           mankey gits theblackhole - 21/01
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