Is Agency Workers Regulations now having a detrimental effect on IT Contractors

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Detrimental effect on IT Contractors

AWR may now be having a detrimental effect on IT Contractors.

According to the latest Markit survey of the UK market by RBS, the number of IT Contractors is expanding.

The market survey shows the indicator at 52.5.

Anything over 50 shows the market expanding.

However, this is down from 53.8 in February so the rate of growth seems to be slowing a little.

Other indicators and news from agencies show that the IT Contractor market turned the corner at the start of the year.

Permanent Workers in IT

Normally, when a downturn ends, IT Contractors are first to benefit.

However, the Markit figure for permanent IT workers is now 59.5 – up from 57.8 in February.

This is a little worrying for IT Contractors.

Usually what happens is that when the market starts picking up after a downturn, companies start taking on contractors first.

They do that because they are not sure how strong the recovery will be and if it will last.

Made Redundant

Also, usually companies will have made permanent workers redundant during a downturn and they can‘t legally take other permanent workers on to replace them so soon.

So, they hire contractors instead till the recovery is more sure.

Well, there are the signs of a recovery but it is still weak and unsure at the moment.

So, why are companies going more for permanent staff rather than contractors at the moment?

Sure, they are taking more contractors on at the moment but they should be piling into them now from past experience.

Agency Workers Regulations (AWR)

Is it because of AWR?

Are companies now thinking that if they potentially have to give temporary workers the benefits of permanent workers they might as well take on real permanent workers?

It is too early to say for sure but the fact they are not taking on contractors is the dog that didn‘t bark in the night.

The fact that they are taking on more permanent staff may be good down the line for contractors once they run out of permies to hire.

But it‘s a little worrying that they are plumping more for permies rather than contractors at this stage of the cycle.

It coulld be that AWR s having a detrimental effect on IT Contractors.

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