| Crunch on contractor rates |
As the economic "slowdown" takes effect, and the major banks write down billions in losses
from the sub-prime mortgage mess and cut back lending to companies of all sizes it is not surprising
that companies are looking to make savings.
According to the Register, one major bank has asked its IT contractors to take a 10% rate
cut or a quick exit from the company. Other city firms are also cutting back on their contractor
outlay – some are looking to exploit the situation offering rates 30-40% below the market.
New survey results show that project and programme managers are pessimistic about the year
ahead, with many prepared to become permanent staff or even leave the profession in 2009.
Project manager survey findings
The PM7 2009 annual associate survey found the following:
- A staggering 59% of respondents believe that demand for their skills in 2009 will decrease
from 2008 levels. A year ago, the same survey found that only 8% had this belief.
- The outlook on contractor day rates is no better, with nearly two thirds of respondents
expecting their day rates to drop in 2009. Of those expecting a drop in rates, nearly one in five
expect the rate decrease to be 'severe'.
- Overall, of the independent contractors who completed the survey, 40% are budgeting for no
more than 9 months work this calendar year. Half of these expect to have contract work for no more
than six months of the year.
- When asked how they intend to approach the predicted downturn in 2009, almost 50% of
respondents replied that they would look for permanent work. PM7 say that this is a surprisingly
large amount, given the notoriously independent and flexible nature of contract Project Managers.
It will be interesting to see both how they fare in the permanent job market and the affect it may
have on competition for permanent roles.
- Of the other approaches being considered for avoiding the downturn, a worrying 10% would
consider leaving the project management profession entirely.
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