Reply to: State of the Market

[MyUserName]

Got a contract until December, it might get renewed - who knows?!

Have been approached by 3 agents about new roles in January, two perm ones. One has not got a salary sorted yet (I would pretty much be employee 3 in a new crypo HFT start up) the other is offering £150 - £175k a year. The 3rd one is a contract and we are going in at £1k a day outside IR35.

Market does not seem to be too bad for the Blockchain/Rust market at the moment. Especially if you have architecture knowledge and a cross section of supporting technologies.

[Fraidycat]

Insane rises in interest rate is the cause. Companies often borrow to fund expansion and that cost has become untenable. Also, perm staff are having trouble with the costs of living and are asking for raises - more corporate costs.
Not seen the contract market this bad in the last 20 years; this looks like the big one. Rates are going south in real time.

And the worrying thing is the rest of economy is effected by interest rates on a lag of around 12 to 18 months. A year ago, Sept 2022, base rate was only 2%. It wont be until the middle of next year until the economy really feels the effect of 5% interest rates.

[TwoWolves]

No idea why we are having this downturn, pretty horrible for all concerned. Especially if you are halfway through a house project with absolutely no warchest or savings left and builders looking for payments

Never mind, could be worse, in that, I could also be injured and not able to run/cycle.

Insane rises in interest rate is the cause. Companies often borrow to fund expansion and that cost has become untenable. Also, perm staff are having trouble with the costs of living and are asking for raises - more corporate costs.

Not seen the contract market this bad in the last 20 years; this looks like the big one. Rates are going south in real time.

[gixxer2021]

I think this has quite a big impact on unemployed people and what leads to so many long term unemployed. Doesn't matter if it's work, dating or anything. Getting rejected dozens if not 100s of times is going to impact any sane person. Even if you rationally know that it's a numbers game, that a rejection is more often than not not a reflection on you at all.

I've had a few intentional gaps in my career. I absolutely notice some agents/managers judge me for them. Weird sense of 'He wasn't working so there must be something wrong with him that other people see but I'm missing' sort of thing. The notion that I can work a year and have enough income for 3+ years just doesn't make sense to them.

I can totally empathise with this, I’ve enjoyed a few lengthy breaks between contracts (one of the many reasons I enjoy contracting), but have found agents can be hugely judgmental about this. I’ve even been accused of lying and having been fired (I wasn’t!).

[fiisch]

Looks like I'm back, for good this time. Accepted a contract this afternoon - my preferred choice came back first, so I've immediately accepted as the terms are decent and the project excites me. The only minor downside is three days a week in London, but pre-Covid and in my previous existence as a contractor I was 5 days in London, so I can't grumble.

Feel very fortunate to have found something so quickly - now just for the unenviable task of agreeing an early exit from my current permie employer.

[JustKeepSwimming]

I must admit though that I am finding the process of getting a contract emotionally draining - I don't get nervous before interviews anymore (I've had too many over the span of my career for that) and I'm only in the early stages of looking having recently given notice, but I've really not been myself this week. I'm lucky in that I don't suffer with any mental health/anxiety issues *touches wood*, but this week is the closest I've ever come to having feelings of anxiety. Maybe it's anxiety over leaving the relative security of a perm position, but in my head I'm very comfortable with my decision (or at least I think I am!).

I think this has quite a big impact on unemployed people and what leads to so many long term unemployed. Doesn't matter if it's work, dating or anything. Getting rejected dozens if not 100s of times is going to impact any sane person. Even if you rationally know that it's a numbers game, that a rejection is more often than not not a reflection on you at all.

I've had a few intentional gaps in my career. I absolutely notice some agents/managers judge me for them. Weird sense of 'He wasn't working so there must be something wrong with him that other people see but I'm missing' sort of thing. The notion that I can work a year and have enough income for 3+ years just doesn't make sense to them.

[northernladuk]

I must admit though that I am finding the process of getting a contract emotionally draining - I don't get nervous before interviews anymore (I've had too many over the span of my career for that) and I'm only in the early stages of looking having recently given notice, but I've really not been myself this week. I'm lucky in that I don't suffer with any mental health/anxiety issues *touches wood*, but this week is the closest I've ever come to having feelings of anxiety. Maybe it's anxiety over leaving the relative security of a perm position, but in my head I'm very comfortable with my decision (or at least I think I am!).

Exactly this for me as well! Normally very confident and a bit giddy when looking for gigs but very different experience this time. The number of applicants the roles get, difficult to speak to agent and the new fire and forget way made me uncomfortable and failed a few interviews for the first time in 10 years so also started to get a bit anxious. Deep down I knew I'd get something but the whole process was so different it caught me off guard. I think I'm in for another long one but I'll not be quite so (over) confident next time and take it a bit more seriously.

[fiisch]

I'd have got a contract first then resigned - assuming you don't have a ridiculous notice period.

I am subject to a ridiculous 3 month notice period...

I suspect there will be some flexibility in that if and when I secure a contract, but I thought it'd be better to give notice and say "I am going to do X" rather than "I've got a contract and I need to be gone by XX"...

[TheDude]

Handed my notice in on Thursday (which I think wasn't wholly unexpected but not taken particularly well) and phoned a couple of agents I know to be useful. Had three interviews since Friday so fingers crossed... The market seems red hot to me - perhaps this is industry dependent going by some other recent comments on this thread, but I've managed to stir up plenty of interest without applying in anger/visiting the job forums. I'd love to say that's because of the quality of my CV and sparkling personality, but I've only been a BA for 7 years so it's more likely reflective of the market rather than my CV.... I also know that from the other side of the table, we struggled to find good quality BA's this year offering £600p/d outside IR35.

I must admit though that I am finding the process of getting a contract emotionally draining - I don't get nervous before interviews anymore (I've had too many over the span of my career for that) and I'm only in the early stages of looking having recently given notice, but I've really not been myself this week. I'm lucky in that I don't suffer with any mental health/anxiety issues *touches wood*, but this week is the closest I've ever come to having feelings of anxiety. Maybe it's anxiety over leaving the relative security of a perm position, but in my head I'm very comfortable with my decision (or at least I think I am!).

I'd have got a contract first then resigned - assuming you don't have a ridiculous notice period.

[fiisch]

Another contractor turned permie considering a return - but having contacted my network of reliable agents, there seems to be a wealth of BA contracts in the insurance world with rates of £6-700pd, mostly outside IR35. Certainly, enough to give me confidence to hand in my notice in the morning and start applying.

Rates compare favourably to my current permie salary of £98k - I know many would stay stick with the security of the perm job, but the politics is driving me bonkers and the work is truly soul-destroying and in a slightly different area to that which I enjoyed previously as a contractor... I've been agonising over this decision for much of 2023, but I think ultimately working as a contractor suits me much better.

Handed my notice in on Thursday (which I think wasn't wholly unexpected but not taken particularly well) and phoned a couple of agents I know to be useful. Had three interviews since Friday so fingers crossed... The market seems red hot to me - perhaps this is industry dependent going by some other recent comments on this thread, but I've managed to stir up plenty of interest without applying in anger/visiting the job forums. I'd love to say that's because of the quality of my CV and sparkling personality, but I've only been a BA for 7 years so it's more likely reflective of the market rather than my CV.... I also know that from the other side of the table, we struggled to find good quality BA's this year offering £600p/d outside IR35.

I must admit though that I am finding the process of getting a contract emotionally draining - I don't get nervous before interviews anymore (I've had too many over the span of my career for that) and I'm only in the early stages of looking having recently given notice, but I've really not been myself this week. I'm lucky in that I don't suffer with any mental health/anxiety issues *touches wood*, but this week is the closest I've ever come to having feelings of anxiety. Maybe it's anxiety over leaving the relative security of a perm position, but in my head I'm very comfortable with my decision (or at least I think I am!).

[Fraidycat]

What is interesting is that after I started the role, the client said to me that they had found it difficult to find anyone

£350 a day is about £85K a year and some void period at end if you don't walk into another role.

£80K (£40per hour) was the going rate in the City in the mid 90s, 30 years ago!

They are not going to get many or any good CVs for that rate. If you are any good then they got lucky.

[JustKeepSwimming]

I've recently started a new hybrid contract in the city of London for a large financial institution as a SQL developer, on a rate of £350/day. This is quite low I think. It was advertised as £400/day (which I thought was low - I was making that 12 years ago), and at the point I was offered the role the service provider intermediary (the agent) dropped it to £350. Since I had had no other interviews after several months on the bench I decided I had better accept it.
Fortunately the role is going well I think (touch wood), is interesting work, so I'm keen to hang on to it if I can.

What is interesting is that after I started the role, the client said to me that they had found it difficult to find anyone, surmising that the market for contractors was strong. I was the only person they had interviewed who they thought could do the job. I replied that I had found the market fairly quiet (an understatement).
I wonder why they dropped the rate then? (I didn't ask).

Is it possible that the intermediary is overcharging the end client such that the end client thinks they are paying a market rate, but the low rate paid to the contractor causes a lack of good contractors prepared to accept the work?

The rate I receive is not subject to IR35 because I am treated as a temp employee rather than a contractor, with the pay directly to me as an individual rather than to a Ltd company or an umbrella company. On top of the £350/day the intermediary pays the employers NI, and payrolls me as an employee (deducting tax and employee NI from the gross rate, paying me net weekly). I guess the £350 is the equivalent of £392 as a gross-fee IR35-caught contract adding on the employers NI. Payrolling me as a temp employee seems like a sensible move because it cuts out the umbrella company "middleman", saving on their fees.

I have a family member who lives in London, where I stay during the week when I'm onsite to save money. Were it not for that fact I might find myself paying £70/night for a cheap hotel in Zone 3, which I would have to fund from my after-tax pay.
I get the bus into the office rather than take the tube as it is cheaper.

So the market is quiet at the moment, very quiet, with rates down in the basement. But it is darkest the hour before the dawn, and things will get better.

Looking at the data things won't improve until 2025+.

I follow most big companies in the financial sector, all have cut their rates by about 20% from 2022. It's the nature of the beast for contractors (although its the same for permies, instead of offering top of the salary range they are now offering middle or below). Recruiters are getting absurd number of applications but vast majority are 'spray and pray'.

IME you have to take what clients say with a pinch of salt. Last week I had interview feedback from a relatively small company that I was 'More suited to a junior role', whilst granted I'm not 'old' my experience speaks for it's self, ie, reporting directly into several international bank national board level executives and budgets in the 10s of millions and many dozens of resources.

Fortunately I have stumbled upon an old client's project that is right in my wheelhouse. Significant pay cut but would solidify a new skillset (that I actually find interesting_. Considering there is a half dozen senior managers who would vouch for me at the company I probably just cry if I don't get it. FTSE 100 are ***** though.

[GJABS]

I've recently started a new hybrid contract in the city of London for a large financial institution as a SQL developer, on a rate of £350/day. This is quite low I think. It was advertised as £400/day (which I thought was low - I was making that 12 years ago), and at the point I was offered the role the service provider intermediary (the agent) dropped it to £350. Since I had had no other interviews after several months on the bench I decided I had better accept it.
Fortunately the role is going well I think (touch wood), is interesting work, so I'm keen to hang on to it if I can.

What is interesting is that after I started the role, the client said to me that they had found it difficult to find anyone, surmising that the market for contractors was strong. I was the only person they had interviewed who they thought could do the job. I replied that I had found the market fairly quiet (an understatement).
I wonder why they dropped the rate then? (I didn't ask).

Is it possible that the intermediary is overcharging the end client such that the end client thinks they are paying a market rate, but the low rate paid to the contractor causes a lack of good contractors prepared to accept the work?

The rate I receive is not subject to IR35 because I am treated as a temp employee rather than a contractor, with the pay directly to me as an individual rather than to a Ltd company or an umbrella company. On top of the £350/day the intermediary pays the employers NI, and payrolls me as an employee (deducting tax and employee NI from the gross rate, paying me net weekly). I guess the £350 is the equivalent of £392 as a gross-fee IR35-caught contract adding on the employers NI. Payrolling me as a temp employee seems like a sensible move because it cuts out the umbrella company "middleman", saving on their fees.

I have a family member who lives in London, where I stay during the week when I'm onsite to save money. Were it not for that fact I might find myself paying £70/night for a cheap hotel in Zone 3, which I would have to fund from my after-tax pay.
I get the bus into the office rather than take the tube as it is cheaper.

So the market is quiet at the moment, very quiet, with rates down in the basement. But it is darkest the hour before the dawn, and things will get better.

[fiisch]

Yes, sorry for being so vague with my previous post. It's for the public sector for a senior frontend role. I was at my previous contract at 650+ outside but it ended in June after 6 months. I think the recruiter quoted me a similar daily rate of 650 (gross rate including employer's and employee's NI, taxes and statutory costs) but it's inside. I would assume around 750 or 800 would be a good rate inside but that may be wishful thinking on my part.

I have 0 requests to do interviews even with 400 outside contracts right now so I'm thinking of expanding my options instead of burning my warchest that took a big hit during the pandemic.

An inside day rate is better than no day rate - in the BA contract world, I'm seeing outside contracts for £6-700, inside rates at £750-800. Not sure if that helps, but having experienced an inside gig through the pandemic, in my experience the inside rates offered generally are not enough to compensate the financial disincentives of working inside IR35.

One way of "improving" the appeal of inside gig is if you're intending to throw a significant chunk into a pension.

[andromedan]

Yes, sorry for being so vague with my previous post. It's for the public sector for a senior frontend role. I was at my previous contract at 650+ outside but it ended in June after 6 months. I think the recruiter quoted me a similar daily rate of 650 (gross rate including employer's and employee's NI, taxes and statutory costs) but it's inside. I would assume around 750 or 800 would be a good rate inside but that may be wishful thinking on my part.

I have 0 requests to do interviews even with 400 outside contracts right now so I'm thinking of expanding my options instead of burning my warchest that took a big hit during the pandemic.