Employers are cutting rates for freelance IT contractors by up to
half as fears of a recession continue to grow.
Telecoms contractors and operations staff are bearing the brunt of
the slowdown, with hourly rates shrinking by up to 50%.
The latest rate cuts, which dwarf plans by London financial firms
to cut their contractor rates by 10%, are the most draconian so
far.
Although the cutbacks are patchy, they reflect a deepening slowdown
in demand for freelance IT staff.
Contractors are increasingly prepared to accept lower salaries
rather than run the risk of being turned down for work, recruitment
specialists said.
"We have heard of rates going down by 50% in the telecommunications
arena. People are just keen to be in employment," said Jon Tyler,
managing director of telecoms company Volt Europe.
Support roles are also being hit, with some overseas contractors
offering to work on support desks for £15 an hour, rather than the
usual £30, said recruitment agency RHI.
Research by the JobStats Web site suggests that hourly contractor
rates have fallen by as much as 25% since reaching a peak last
September.
Deutsche Bank, Citigroup, and JP Morgan are among the City
organisations to have cut contractor rates by 10%, according to the
Professional Contractors Group. Hewlett-Packard and Ericsson have
also made cutbacks.
Anne Swain, chief executive of the Association of Technology
Staffing Companies, said demand for contractors is unlikely to pick
up until the second or third quarter of next year at the earliest.