| Contract rates continue steep decline |
There is growing evidence that average contract rates have fallen dramatically over the past
quarter, with more contractors on the bench and those in contract often asked to take a mandatory
rate cut.
It has been reported on stats site ITJobsWatch that rates for a generic "analyst" role have fallen
by 2.16% over the previous 12 months. The percentage drop now stands at just over 6%. The same
pattern is repeated across most roles - the generic "developer" role has seen a drop of
8.98% over the past 12 months, compared to just under 6% in September. Roles involving "SQL" are
off over 9% over the past year.
Not only are contract jobs being slashed by a number of leading companies - but those who remain in
contract are either being forced to take a percentage rate cut, or signing up on lower rates for new
roles. A recent report shows that the number of engineering contractors on the bench for over 90
days has also risen dramatically.
Unsurprisingly, financial services contractors were the first to face up to the changes in market
sentiment.
A recent report showing that financial services contractors have seen their average rates slashed by
12% over the past 12 months. The research showed that the average contract rate for IT contractors
working in the financial services sector is £44 per hour - the lowest average rate for five years.
In late 2007, the average rate was £50.
Another site has provided a benchmark for the health of the contracting sector for many years,
Jobstats, also shows a rapid decline in average rates over the past few months. In late February,
the average contract rate had already declined to £36 per hour across the board. The average rate
this week is a mere £31.
Many contractor services providers are also feeling the pinch, with anecdotal evidence from the
contracting industry mirroring that in the general economy.
One of our accountancy contacts told us last week: "Business wise, as I know you don't need me to
tell you, things are pretty tough, with many contractors closing their limited companies and looking
for permanent work."
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