Good News for Contractors in 2010
19th January 2010
Good news for Contractors in 2010 according to Philip Fantham, MD of Jenrick IT who commented “we have noticed a significant growth in demand for IT experts, in particular for contract consultants as our clients emerge from project hibernation.” A view shared by recruiters across the Construction, Engineering, Marketing, and Telecoms Sectors.
Research group Forrester Research predicts businesses and governments around the world will start investing in IT as a six-to-seven-year cycle of growth and innovation that it calls “Smart Computing” begins. “The technology downturn of 2008 and 2009 is unofficially over,” said Andrew Bartels, analyst at Forrester Research, this week. “All the pieces are in place for a 2010 tech spending rebound.”
More encouraging news for contractors but not so good for permanent employees is that many firms are expected to make large job cuts in the early part of 2010 with over 250,000 jobs expected to go. Flexible workers such as temps, freelancers and contractors will be required to fill the void by covering essential 'back office' activities that still need to be done.
According to John Brazier, managing director of PCG; "A core central office supported by freelance contractors is becoming more common. Since October and November we have definitely seen an uplift coming through and, while I think it is too early to be calling it a trend, it is something that will be picked up more."
Additional opportunities for contractors look to be in the financial sector, in particular banking where many banks will have to look to contractors because of the legalities of employing permanent staff so soon after mass redundancies.
It seems outsourcing to freelancers will be a key cost-cutting strategy for many employers over the coming years. Just this month, the Confederation of British Industry released a report stating that freelance and flexible workers will become more and more popular with employers over the next decade.
Turning to finances, high earners apart, contractors were largely unaffected by the chancellors’ pre-budget report last month.
There were no major breaks for contractors beyond delaying the scheduled 1p rise in corporation tax, and the anticipated attack on umbrella company expenses and limited company contractor dividends failing to materialise.
However the future is more uncertain with the impending general election and the likelihood that whatever the outcome you’re going to be paying a different rate of tax and NIC post election.
Despite the election, the fortunes for contractors in 2010 so far look healthier, at least when compared to the last year and a half.
However, to avoid any nasty shocks this year Contracting Made Easy warns contractors to continually update their skills, target the right sectors at the right time, to prepare for a change of government, an emergency budget and more tax to pay.