The 25 steps in an IT Contractor lifecycle

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IT Contractor Lifecycle
IT Contractor Lifecycle - the 25 steps

IT Contractor Lifecycle

We look, here, at the IT Contractor lifecycle.

So what lies in store for the IT Contractor?

I have seen the whole IT Contractor lifecycle at least three times, so let me tell you what to expect. To be forewarned is to be forearmed, so you might want to remember where you are in the cycle and what lies ahead.

So, where shall we start?

We might as well start when the economy is in boom conditions.

25 Steps in IT Contractor Lifecycle

1. IT Contractors are at premium as companies grab as many as they can get.

2. IT Contractor Rates rise rapidly.

3. IT Contractors think that their time has come and that the gravy train will go on for ever. They think that just a few years of this and their pile will be made and they can then get out and live the high life. To bring this date sooner they also invest their excess money in the booming Stock Market.

good rates from a contract
Good Rates – How to get them from a contract

4. Lots of permanent IT workers, who would never have risked turning contractor before, feel that the risk has been taken out of it and become contractors.

5. This means that there are heaps more permie vacancies which will be filled ‘temporarily’ by contractors.

IT Skills Shortage

6. Employers and the consultancies start to lobby the Government about a skills shortage.

7. Loads of students joining university take IT related courses to take advantage of the new boom meaning that when the downturn comes thee will be even more IT folk competing for fewer jobs.

8. The boom economy starts to turn down.

9. The Government, who are always behind the cycle, starts opening the floodgates to tens of thousands of cut-price IT workers from the developing world whilst saying that they are not replacing UK IT workers and that they are not undercutting those UK IT workers.

10. As company profits suddenly start to dip, Finance Directors are told to find ways of cutting costs so that profits can be protected.

IT Contractors Laid Off

Sackings and Rate Cuts
IT Contractor Sackings and Rate Cuts

11. Great swathes of IT Contractors get cut from the books of companies across the country.

12. IT Contractor rates start falling. Some companies issue take-it-or-leave it 10% cuts across the board to all their contractors – even those with perfectly valid contracts with plenty of time to run. Some companies even go back for a second bite of the cherry.

13. In the second wave companies start laying off their permanent IT workers to cut costs.

14. Many companies decide that the way forward, to cut costs, is to outsource their entire IT department, many of them sending IT jobs offshore never to return.

15. Not only have tens of thousands of IT Freelancers lost their jobs but they see the Stock Market, where they’d invested their hard earned contracting cash, sinking, meaning that they have lost not only their income stream but much of what they have invested for a rainy day and for the future.

IT Contractors have Problems with HMRC

16. Many IT Contractors, who have spent their remaining cash on staying afloat, run into problems with HMRC, and run into terrible financial problems. Indeed many even lose their partners and family as the pressure builds.

Company Cut My Rate
Company Cut My Rate by 20%

17. Gloom and doom is everywhere as the pundits, and many contractors, say that the best days are over and that IT Contracting has had its day. They even say that the bottom of the market is actually the new peak and that there will be even fewer contractors in the future.

18. Some IT Contractors get out of the industry altogether and those that can take a permanent job. There is much weeping and gnashing of teeth.

19. Many IT graduates appear on the market just as the party is over. Like last time only one-in-five IT graduates will actually get a job in IT.

20. The recovery begins slowly but gradually gathers momentum as companies get more confidence and make those long outstanding major system changes and give budget to projects that have been on the back burner for ages.

Companies Take On IT Contractors

21. Companies take on IT Contractors in the early stages of the recovery as they don’t yet have the confidence to take on permanent IT workers yet (or they may not be legally able to as they have so recently laid off a whole load of them).

22. The recovery in the IT Contracting market becomes more gentle but more stable. This usually lasts for three or four years. This is the best time for IT Contractors as, allthough rates are not as high as during a boom, the market is more stable and we are still well away from a downturn.

23. In a downturn the most important Business Driver is Cost and the Finance Director is in the ascendant at a company.

In an upturn Time-to-Market becomes the most important Business Driver and the Sales and Marketing Directors are in the ascendant. Companies want to get more and better and quicker products to market and the IT systems component is normally crucial in many products and services.

Therefore they need new projects but don’t want to take on extra staff for one-off projects. This is where IT Contractors come in and companies start competing for them.

24. Suddenly, just when companies need them most, there are many more IT Contracts available than there are IT Contractors.

25. Return to Step One.

So, there you have it – the IT Contractor lifecycle.

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