State of the Market

[dsc]

[...]they layoff permies and hire contractors to replace them? Never been much of believer in that theory myself, but some on here have said that happens..

On my current contract I was taken on as the client had a freeze on perm hires but still needed people in a niche area - this in itself actually makes sense, but laying off perms and taking on contractors seem like shooting yourself in the foot.

[Lance]

On my current contract I was taken on as the client had a freeze on perm hires but still needed people in a niche area - this in itself actually makes sense, but laying off perms and taking on contractors seem like shooting yourself in the foot.

Depends.

flexible resourcing requires a mix. Keep a baseline of low cost perms, and flex up or down with contractors. Not hiring new perms just means the baseline resource has been met.

[dsc]

Yup, flexing up / down with contractors I get, what makes little sense, to me at least, is ditching perms and hiring contractors (unless you have tulip perms, then yeah maybe).

[Fraidycat]

Yup, flexing up / down with contractors I get, what makes little sense, to me at least, is ditching perms and hiring contractors (unless you have tulip perms, then yeah maybe).

It doesn't make much sense for small clients. But if Big Corp is a doing a large layoff round and some permies are needed for just another six months or a year. Might just be easier to sweep them into the current redundancy round. And replace them with contractors for six months or a year.

[Lance]

Yup, flexing up / down with contractors I get, what makes little sense, to me at least, is ditching perms and hiring contractors (unless you have tulip perms, then yeah maybe).

reducing the baseline


and they’re tulip as well

[CoolCat]

reducing the baseline


and they’re tulip as well

can be other motivations too, simply want perm headcount to look low to convince investors (or the govt in the case of public sector) that they are being efficient. sometimes if the pension fund is problematic there can be a drive to stop new joiners for a while during attempts to fix it. etc.

[Snooky]

can be other motivations too, simply want perm headcount to look low to convince investors (or the govt in the case of public sector) that they are being efficient. sometimes if the pension fund is problematic there can be a drive to stop new joiners for a while during attempts to fix it. etc.

This is what I've seen in the past. Some research analyst says company X has staffing costs 5% higher than its main competitors, investors ask why, CEO sends the edict to ditch 5% or more of permanent staff. My client manager at the time had to find 5% of a team of 12-13 permies to get rid of. They were all really good, they were definitely missed when they went. Meanwhile we contractors who were sitting there waiting for the chop were left alone, no rate change, nothing, apparently because our cost was hidden in a different budget.

[SchumiStars]

In my experience, contractors are usually hired when there is a new or existing project that needs to be completed. The company usually has a project budget and contractors are payed from this accordingly. Hence why we are chopped when the budget has run out.

This is why there seems to be a slow down, much like when COVID19 hit, projects are on hold. However the other side will then be a shortage of skills and people. Just hoping that the valley is not too deep. That being said some companies can rarely afford to stop project work as the customer/system/regulations maybe demanding the changes.

[Fraidycat]

That being said some companies can rarely afford to stop project work as the customer/system/regulations maybe demanding the changes.

Google is saying anywhere between 1 million and 2.5 million tech workers in the UK, depending on the source. So plenty of workers to make those changes and keep things ticking along. There is no mad rush for innovation at the moment, except in AI, but not sure how much of that we are seeing here in the UK. Silicon Valley has been going mad for it the last six months. Venture Capitalists are pumping Billions into AI over there. The UK is seen as a bit of an economic basket case by Americans at the moment.

[Fraidycat]

Some good news for a change. Huge rally today in the FTSE 250 on the back of the better than expected inflation data.

Markets now expecting interest rates to peak later this year, instead of early next year.