Public sector overtakes Financial services

In 2004 the IT contractor market grew by an estimated 30%

and 2005 was predicted to follow suit with a high demand in financial

services, telecoms, and--most notably--in the public sector

(government). IT contractors used to have a reputation as loner

geeks-for-hire, whose only business value was their ability to keep the

complex systems running for the "real" business users. Today, that

perception has changed. Businesses now see IT contractors as much more

essential to the organization as a whole. They are valued as workers

with specialized skills that complement in-house resources and have a

significant impact on the organization's strategy and commercial

goals.Traditionally, the public sector has not been able to match the

private sector (particularly in financial services) in terms of salary;

recently however, this has changed. Due to increased pressure to

complete high-profile projects, such as the UK's National Programme for IT,

the public sector has upped the stakes and closely matched the

offerings of private sector employers. Combine this with the

opportunities available in the public sector: the high-profile projects

which would look good on anyone’s CV, increased flexibility, and

greater diversity, and the public sector looks more and more inviting! Giant group

has specialised in limited company development and umbrella payroll

services for the contractor market since 1992. Managing director

Matthew Brown comments: “The financial services sector has

traditionally been the principal growth driver for the industry. When

things start moving there, times are generally good but what is

particularly encouraging about the current market is that the public

sector, which tends to be more insulated from cyclical trends, is

providing additional ballast.”

Research carried out by Giant suggests that the public sector has

now overtaken even the financial services sector, retaining 23% of IT

contractors compared to 21%. This may not be a lasting trend, however,

with 28% of contractors identifying the financial services industry as

a likely mover, compared to 19% favouring the public sector. This could

be a telling sign of things to come, with Basell II

being predicted to increase demand in the financial sector for 2006. As

previously mentioned, the telecoms sector remains a key player with 15%

of contractors speculating that it will generate the biggest number of

new contracts in the coming year. Consumers' appetite for high-speed

internet and mobile services is still increasing, 3G is becoming more widely accepted with a much better range of handsets filtering into the market.

All in all things are looking interesting and the competition

between these major sectors has resulted in driving wages upwards—let's

see what surprises 2006 has in store…