Businesses and government departments are planning huge cuts to
their IT recruitment budgets which could see some companies cutting
100% of their temporary staff cut and 10% of permanent workers made
redundant.
But cutting IT staff when skills are not required could leave
organisations short when they are most needed when business picks
up.
According to
research from management consultancy Deloitte job cuts form
part of the cost cutting strategies adopted by organisations during
the economic slowdown.
The report said that half of companies are planning to cut their
contract IT staff by between 50% and 100%. A total of 66% of
organisations are planning to reduce permanent staff by 10%.
But organisations that gain a reputation for recruiting when
times are good and firing when business slows will find it
difficult to recruit the necessary skills when the upturn
comes.
"IT skills are scarce and organisations that have not retained
the expertise they need may have a real challenge attracting new
staff when markets strengthen, particularly if they have a hire and
fire reputation," said Deloitte.
Matthew Smith, director of UK regions at Harvey Nash, said that
IT workers looking for permanent jobs will expect a certain level
of stability. "If they are approached by a company has a reputation
for hiring and firing they may be put off which will have an
adverse effect on the company that needs the skills."
In contrast he said that contract staff understand that they
will be the first to go when the economy slows. "They know they can
charge high rates when times are good."
Smith said in contrast to Deloitte's findings Harvey Nash's
contract recruitment business is strong. "During the current
economic climate many firms have recruitment freezes so hiring
temporary staff is a way to fill skills gaps."