SC
Cutting back on contractors
28 February 2008
Contractors in Scotland may be forced to bite the bullet as financial services firms look to cut back on temps.
The temp market has been booming in Scotland over the last year, as soaring headcount requirements and limited talent have forced companies to fill the gaps with contractors.
Rates have soared from £250-£300 a day to £350-£400, according to recruiters, which might be the reason the party looks set to end.
Steve Shields, manager financial services Scotland at recruiters Badenoch & Clark, says: “The general rule of thumb is that in cash terms contractors will earn at least double what a full-time employee will earn. With basic, say, of £40k, a contractor will be billing £80k-£85k. A full-time employee has all the benefits, but nonetheless contractors are seen as expensive.”
Shields reckons firms are twigging that a lot of temps are practically permanent anyway: “They get a contractor in on a six-month basis and then they realise they’ve had contractors on site for four years. Although the contract finishes, another project kicks off and they are re-employed.”
Not everyone agrees that contractors are about to die a death, however. Richard Park, country manager for Scotland at recruiters Martin Ward Anderson, says firms are still using contractors to stave off committing to new headcount in an uncertain market, and that demand remains strong
Similarly Fraser Campbell, consultant in the temporary division at recruiters Robert Half, says employers are more rather than less keen to use the ‘try before you buy’ option. “Because the market is so tight right now, a lot of companies are going down the temp to permanent route,” he says. “They’re taking people on, sussing them out and then offering a permanent job.”
But Shields says that firms want employees who have a vested interest in the company succeeding: “People assume that when the going gets tough they can lay off less committed workforces pretty quickly, but instead firms have realised they have to invest in their own staff to get through the turmoil.”
