Many have been impacted as a result of COVID-19 including some IT & Digital contractors who are now finding themselves afloat between contracts. Now that we’ve moved down the alert levels, contractors and organisations alike are looking at the market to see where opportunities are, where things are changing and what the future holds.
It can be hard sometimes to see the big picture; that’s why Find Recruitment has been studying these market changes – and we’re keen to share our insights with you. Here is the most important information you need about today’s contracting market, and what you may expect as an IT & Digital contractor or as an organisation who uses contractors going forward.
Market responses and its impact on contractors
Back in 2008 during the Global Financial Crisis (GFC), New Zealand saw certain behaviours in the contracting market that are now repeating themselves in the COVID-19 world. The good news is, we can use this historical basis to help predict where the market will turn next.
Some changes we are seeing right now include:
- Some organisations have sought a reduction in contractor hourly and daily rates;
- Some organisations seeking to convert contractors into permanent or fixed term roles;
- Contracts being offered at shorter durations than pre-COVID;
- Those hiring are seeking the “100%” contractor – someone who can offer “all” the skills and experiences sought (at the right rate) with few compromises;
- Delays in recruitment processes – sometimes sign off delays/challenges, project reprioritisation, headcount changes etc.
As with other financial downturns, organisations immediately seek to reduce overheads and streamline operations. These standard responses make a lot of sense from a business perspective, but can have a wide effect on their people.
While many organisations must prioritise their permanent employees, some have also asked employees to work reduced hours as well as take a reduction in salary. In the case of some contractors, however, overall rates are being reduced while working hours remain the same (namely to avoid impacting project delivery dates).
What the future could hold
IT & Digital Contractors may be picking up the same amount of hours for less overall cost, but history tells us that the market will recover and rates will re-adjust. The only caveat is that it will take some time.
Looking at past financial crises like the GFC shows us that market recovery for contractors can take anywhere from 6 to 24 months. During this time, we often see contractors taking permanent roles to remain in work – but after a while, we typically notice contractors return to contracting when the market picks back up.
Here at Find Recruitment, we believe we will see an uptake in IT & Digital contracting roles as the myriad effects of COVID-19 settle. The Private and Public sectors will continue to generate digital & technology projects and initiatives that will demand the use of skilled contractors to deliver the required outcomes. Because organisations will need to raise operations quickly and effectively, they will rely on contracted IT experts to provide additional resources and support. Whilst this means that a number of projects will open up for contractors, the duration of each contract is likely to be shorter.
The market is currently offering fewer contracting roles and reducing rates on existing projects, but it will revitalise. Once the market does return, IT & Digital contractors will likely see an uptake in roles – although these roles may generally be shorter.
Given that New Zealand’s borders will have restrictions, the demand for experienced IT professionals will remain but the pool to select from will shrink. Partnering with a dedicated IT & Digital recruiter can help organisations reach top talent and connect contractors with the best opportunities.
Contact us any time to get started.