It looks like IT Contracting is now a safer profession that being a permanent employee in IT.
We announced recently that Barclays Bank were chopping 422 IT jobs, mainly from their site in Knutsford, Cheshire.
We said we didn‘t know if any of those would be contractors.
We were informed by a reader that it didn‘t affect contractors.
All the big banks have been making major cuts in their permanent staff in the past few months. That includes in their IT departments as they look to cut costs.
However, this has largely passed IT Contractors by.
What has happened instead to them is that most of the banks have cut their rates by 10% across the board.
This flexibility is an advantage that IT Contractors have over permies, as it is not legally possible to cut the pay of permies. So when they make cost cuts, some of the permies are toast.
Cost Cutting Contractors
It used to be that major companies saw getting rid of their contractors an easy and excellent way of cutting costs along with cutting their advertising budgets.
They didn’t need to make any redundancy payments.
Now, there has been a sea change in attitude from the way major companies see IT Contractors.
They want to keep them on and let rate cuts take the hit.
Enablers of Cost Cutting
There are two reasons they want to keep them on.
Firstly, they see them as enablers of cost cutting during a downturn.
Secondly, they don‘t want to stop projects. They have found that, when they did that in the past, they were a couple of years behind those rivals in the marketplace who had continued with their systems development during the downturn.
IT Contractors Good Bet
Nowadays IT Contractors have an each way bet. They are seen as enablers of the new Information Age during upturns and enablers of cost cutting during downturns.
It is the poor old permies that have to take the hit now in a downturn. That’s when major companies want to cut costs to preserve the bottom line.
It’s not a safer profession now.
What‘s the point now of being a permie if you get half the money and your job is less safe than that of a contractor?
Answers on a postcard.