If it’s not too much of an understatement, 2016 has been interesting, exciting and challenging. We saw a significant and growing increase in demand from Jan 16 through to May for both contractors and permanent staff, but this hit the buffers at the end of June after the Brexit shock kicked in.
Subsequently, during July and August we witnessed a surge in perm hiring, however with increasing uncertainty over Article 50 and the process of leaving the EU, perm hiring slowed in September and October. To counterbalance this, though contract hiring slowed in July and August it then picked up in September and, in particular, October. It seems reasonable to assume that hiring may have shifted to contractors in recent months with companies, despite some uncertainty around the future economic direction of the country, needing to act to fulfill current and short-term staffing requirements. Committing to contract staff instead of perms offers flexibility to re-align staffing as future needs become more clear.
In the last two months we have seen a growing demand for staff for new roles and an increase in CVs sent out, but clients are taking longer to make decisions. Conversion to interview is certainly slower, as are placement timescales (time to hire). Put simply, uncertainty is slowing the whole recruitment process down.
With candidates increasingly difficult to find, this can make for frustration all round. Just when we think we have sourced a tough role, sometimes, more often than not, the client moves too slowly and the candidate is snapped up by another client who has acted more quickly. This is an issue across the market for most, if not all, rec-cons in IT/Digital.
In addition, over the summer we have witnessed an increase in the level of ‘back outs’. This is when someone accepts a new role but backs out of the process whilst in their notice period or on the start date itself (a ‘no show’ - yes it does happen). This is invariably due to a counter-offer from the current employer, or, alternatively, other clients offering a higher salary/package which the person cannot turn down. Our rate of back outs over the summer has peaked at 18%. This is an all-time high for this stat during my 24 years in recruitment, which is alarming to say the least. Perhaps unsurprisingly, due to the increased demand for their skills, this affects the developer marketplace more than others.
As far as remuneration goes, we have seen significant increases in IT/Digital permanent salaries of c. 3%-5% over 2016 so far. More notably, we have seen contract rates spike in the last two months, with a c. 10% increase in pay rates across the board.
So all in all, it is changeable at the moment but there is increasing confidence coming back from buyers. That said, my gut feel is that there is a growing lack of patience with governments (not) agreeing how Brexit may work. Business waits for no one and the economy has to carry on (as it did in Spain for most of this year without a government!) regardless of the political (in)decisions we face.
Gareth Biggerstaff, MD, Be-IT Resourcing