Recruitment Markit Marked Doon a Bit (IT markedly better)
Posted on 9th March 2020
The February RBS/Markit report shows that, overall, the Scottish recruitment scene has regressed slightly compared to its previous (admittedly pretty good) performance since 2017.
The longer-term trend, shown below, illustrates how the permanent market has changed since 2003, with February seeing the first decline in growth for four months. What matters now if whether the dip we are seeing at the start of 2020 accelerates rapidly downwards as the coronavirus (of which more later) hits the world economy.
The summary section of the RBS/Markit report suggests that the February decline in the all categories of employment perm market is due to weakening demand for staff allied to the seemingly never-ending staff shortages. In the temp world, recruitment agency billings fell “at the quickest rate since February 2009,” with candidate availability and demand for staff having declined across the market as a whole.
While the wider economy is obviously extremely important in setting the scene for recruitment industry, what matters most for Be-IT, its clients and candidates, is the state of the #ITjobs market. Here, I’m glad to (continue to) report, things are still hunky dory, as you can see below.
The table shows that IT is out on its own in the perm market, but has drifted slightly in the temp/contractor market, albeit it’s still growing nicely. To what extent the month on month decline in the temp market is due to contractors getting out before they are hit by IR35 is hard to say, but anecdotally I hear more than a few instances of this happening, while, as we all know, there are quite a few examples of big firms/organisations telling their contractors that they’ll have to either sign up for a perm job - or their contracts will be cancelled anyway.
One thing that isn’t taken into account in the February Markit report is the aforementioned coronavirus. While yielding to no-one in my contempt for some of the more lurid scaremongering that’s doing the rounds, I am not complacent about this and there is no doubt that if it spreads at even half the level the media are reporting it will have an effect on companies’ hiring intentions.
At present, my belief is that this is less likely to affect IT recruitment to the same extent as, say, High Street recruitment. If the economy deteriorates (and it looks clear it will – it just depends whether we go into a full recession), then I think that, initially at least, there will continue to be a demand for techies and the other whizz-kids who can help drive up productivity and reduce costs. In the same way that major wars lead to major technical (and health) innovation, there is nothing like declining margins in a downturn for concentrating the minds of the C-Suite on saving money via better technology.
That said, we have some way to go before we get to this stage but also some way to go before this epidemic is over. Things will surely change as the spread of the virus proceeds and we have a clearer idea of its impact. In the short term, I don’t see any major impact on IT hiring, but we’ll be monitoring the situation and will report back to you as and when necessary.
Gareth Biggerstaff, CEO, Be-IT
Posted in Opinion, Recruitment News
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