Many contractors are feeling the downside of the millennium bug. For those who were earning up to £120,000 per annum on Y2K projects, the new year has hit them in the wallet, according to recruitment company Recruitment Solutions Group (RSG) Infotech.
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Jason Clark, manager of RSG Infotech, which recruits staff in Essex and London said, "The boot is on the other foot now. Whereas last year, IT contractors were in a very strong negotiating position, now only the best will be able to make a living as contractors. The remainder will have to find permanent work at realistic salaries."
Clark predicts that those contractors who are earning over £45 per hour will survive. But the mid-tier, who earn about £20 an hour, will consider going permie because they have finished Y2K projects, and may face a drop in income if they're hit by the IR35 proposals. Permanent work is more attractive to this tier now as the rate differentials have narrowed, according to Clark.
"Over the last couple of months there have been a lot of contractors who were contracting, but are now entertaining the idea of going permanent. At least 30% of our contractors are thinking abut it."