Featured in Contractor UK

May 2024

First Point Group featured on Contractor UK's news website this month discussing whether or not contractors rate cuts were on the horizon. Here's what Pendy Hou, from our London office, had to say. The original article can be found on the Contractor UK website.

Shrewd IT contractors won’t price themselves out when an upturn's just around the corner

They traditionally fare comparatively well in a shrinking economy but more IT contractors than not will likely welcome the UK leaving recession, as it did in Q1 2024.

Yet engagers still face the difficult balance of managing costs while retaining their top telecoms and technology talent, writes Pendy Hou, delivery team leader at staffing firm First Point Group.

No 'take it or leave' rate reductions during the recession

Fortunately for IT contractors and other candidates, during the shallow recession we didn’t see organisations present aggressive tactics such as a ‘take it or leave’ rate cuts or enforced leave. However, we have had a number of contractors not get their contracts extended. Where contractors requested a higher rate than was budgeted, clients simply asked us to reaffirm to them that they wouldn’t be able to increase their offer.

Are there signs of confidence returning, and what about the BoE?

Over the last few weeks, we've closely monitored the IT contractor market. What we've observed is two distinct pictures. In the UK, the tech contractor market remains quieter than usual.  However, there are positive indicators. The Bank of England froze interest rates in late March 2024 (its fifth ‘hold’ decision in a row), suggesting stability. Furthermore, strong hints by the BoE about potential rate reductions next month and throughout the year bode well for confidence and investment. As the UK’s economic conditions improve, we expect increased hiring activity.

It's brighter in Europe...

The picture among our European clients is brighter. This is the second picture. When hiring for their projects and programmes, organisations we supply in Europe have been more active over the last few weeks in engaging IT contractors. This divergence from the UK highlights regional variations in market dynamics.

What steps can IT contractors take to position themselves well for the UK upturn?

As the hiring market in the UK gradually rebounds, IT contractors can position themselves for success by taking three steps:

1. Polish your CV: Use this quieter period to enhance your CV. Highlight relevant skills, certifications, and project achievements. A well-crafted CV can make a significant difference when competing for temporary/contract roles.
2. Reality-check rate expectations: Be realistic about your rate expectations. While it's essential to value your expertise, consider market trends and prospective client budgets. Pricing yourself out of opportunities may hinder your chances of securing contracts.
3. Network and upskill. Engage with industry peers, attend virtual events, and expand your professional network. Take this preparatory stage of the market to upskill in areas of high demand, such as:
   • Cloud Computing;
   • Cyber Security, and;
   • Data Analytics.

Outlook 

In summary and since the UK entered recession and then came out of it in this year’s first quarter, while challenges persist, the outlook for IT contractors is cautiously optimistic. As confidence returns and projects ramp up, contractors who adapt, negotiate wisely, and stay informed will thrive in this dynamic environment.