Malvolios Blog

(This is a copy of an earlier Blog entry I wanted to keep current, mostly to see if I’m right!)

I get this horrible feeling that with IT Contracting – and perhaps some other disciplines – “contracting” is going to be the most apt description. The recession has had many effects; one of them has been to highlight just how exposed the contracting business is in the UK.

For one thing, it has turned many companies’ eyes away from quality and towards costs. While this is understandable, it is getting to the point where it is counter-productive to the economy as a whole. Individual companies may well benefit from pushing rates down to the basement, but as I said yesterday, this limits the number of people available to you: not a problem in the South-East perhaps, where transport links actually work, but elsewhere it is becoming an issue.

Secondly, it has led to the proliferation of companies moving work offshore. There have been long arguments about this, and early horror stories were justified, but the offshore suppliers are catching up.  They can turn out code as well as we can and at a much lower rate. As the quality of their work goes up, the management overhead goes down and they start to get close to the cost efficiencies they promise but have so far failed to deliver.

As an aside, but a serious one, this does not justify bringing in workers under Inter-Company Transfers to learn on the job and take their new skills back offshore. This is a blatant abuse of the purpose of ICTs and needs to be stopped. To do that there has to be documentary evidence (as opposed to people saying it’s happening). If you do have such evidence, please pass it on to the ICT Abuse website at http://www.ictabuse.org.uk/cms/index.php.  It’s important.

Sorry, back to the plot…

Secondly we have lots of people dumped on the job market. These are skilled and capable people, of course, and are looking to keep their income going.  As a result they have joined the pool of already established contractors, meaning recruiters have a much larger population to choose from. But, as we have seen, this has meant that the recruiters have got lazy, and simply select the people with the closest match to the client’s list of requirements, almost regardless of general ability. That works, but it makes it a lottery and the seriously good people who are capable of changing work streams and who don’t want or need to work for low rates will leave the field. Ultimately the general pool is reduced both in numbers and, more importantly, quality.

So consider the potential impact of that in about five year’s time, hopefully as the business gets back to something close to normal strength.

Firstly, clients have got used to paying fairly low money for the bulk skills. Offshore suppliers easily undercut local resources for those skills and take that business. As a result the market for entry-level skills in the UK dries up. So where do people get started in IT? And if they don’t start, where do the Analysts and Managers come from…?

Secondly, recruiters have got stuck in a box-ticking selection process. They won’t understand multi-skilled senior staff CVs, nor those with highly specific skills. The high-level people will give up with agency recruitment altogether and either work through their own network of contacts or move into collaborative mini-consultancies of their own.

So we end up with a two-layer business in IT. Actually, we have that now to some extent, except right now you can move up the ladder. But if the bottom of the ladder becomes inaccessible to the UK worker,  how do you get to the top of the tree?