IT agencies 2nd biggest fear


According to their representatives REC, agencies‘ 2nd biggest fear is a looming IT skills shortage.

IT skills shortages

I find this one more surprising, After all, we have very recently come out of the worst downturn in the history of the IT industry and yet they still talk about skills shortages.

It‘s not even as they are talking the same game as the Government. When the Government talk about skills shortages they are talking about skills shortages for permanent members of staff.

When you add on the contractors to that then there is no real skills shortage. What the Government has done is to move IT contractors down the pecking order.

3rd Class Citizens

It used to be that companies went for permanent employees and when they didn‘t get them they took on contractors.

Now the Government have changed the priority. Now the rule is that if you can‘t get a UK or EU permie then you can try for a third world permie before you have to take a contractor.

The Government, in the guise of Beverley Hughes confirmed this in an answer to the House of Commons when she said that UK IT contractors weren‘t in the loop, and that a company had the decision as to whether they wanted a permie or a contractor.

If they chose a permie then they could then get one from abroad if they couldn‘t get one in the UK – even if there were UK contractors with that skill available.


Yet, agencies, most of whose income comes from contractors rather than permies are still fearing a skills shortage.

They may just be talking about their permie side – but then again they may not.

It would certainly be good news for us if there was a skills shortage just around the corner. It would get us all back into work and the squeeze on the labour market would push rates up as well.

Of course the Government would be watching this closely ready to push down the price of labour by increasing the Supply of it from outside the EU.

It may seem to readers that a party which calls itself a party of Labour should be working as hard as it can to push the price of labour down for the benefit of the big companies, but that‘s another story.

Down the Line

Perhaps the fear is just a fear for a skills shortage down the line.

After all, although IT became the most popular course for graduates entering university in the late nineties / early zeroes, only one-in-five of recent IT graduates actually managed to get into IT and have had to look elsewhere.

The fact that so few got in could contribute to a squeeze.

Let‘s hope that agencies are right though and that there is a coming squeeze on the IT labour market which will bump up rates.

Hopefully we can start to make some money out of the profession again before the Government take action to drive down our rates again.