What does the future hold for IT contractors?

It is safe to say that the IT sector is a pretty safe one to work in. IT is ever expanding as people come to rely on it more and more, and the sector even weathered the recession well.

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It is little surprise then, that employers are planning to expand their IT teams in 2013, which could impact on both full time IT workers and contractors. According to research from ReThink Recruitment, just under half of IT directors expected their budgets to increase this year – which is significantly up from 39 per cent in 2012.

This research indicates that confidence is increasing across the sector, and IT budgets are going up across the board, not just in areas seen as ‘hot’ such as mobile apps.

ReThink Recruitment director Michael Bennett commented: “Factors that tended to make IT directors cautious last year…have subsided. Businesses are now hoping to bring years of IT job cuts or headcount freezes to a close and are ready to invest in their IT departments again.”

It is also likely that an IT skills shortage could see contracting rates go up, and a possible surge in contractor numbers. Sixty-seven per cent of IT directors were expecting to increase pay in the year – up from 59 per cent in 2012 and just 47 per cent the year before.

Mr Bennett pointed out that IT departments may find it difficult to hold onto staff that have dealt with years of pay freezes and could be easily tempted to move onto another job with a better salary. This could open up a number of positions for IT contractors.

So what does this mean for IT workers?

Contracting is becoming an increasingly attractive proposition for many workers, with work-life balance and quality of life higher than ever on people’s agendas.

With the outlook for the IT sector being so positive, many may look to increase their income by switching to contracting. When thinking about going into self-employment in the past, some may have been put off by a potential lack of security, but with IT budgets rising, this concern can be some what alleviated.

Contractors are traditionally paid a bit more than standard nine-to-five workers, and taking the leap could see their income rocket. People thinking about becoming a contractor can work out what their earnings could be by using an umbrella company calculator before deciding whether it is worth it.

But doesn’t contracting mean more work?

Many contractors do have to put in extra hours on top of their job, working out the financial matters and expenses that traditional employees don’t have to concern themselves with. However, this does not have to be the case.

By using an umbrella company, contractors are essentially hiring an employer to look after matters. Umbrella companies provide a personal business manager to take care of admin and paper work, employee benefits and an expenses policy for travel, meals and accommodation. This alleviates a lot of the worry for contractors – especially those who are not used to dealing with business finances, and makes the proposition a lot more attractive.

It also means that contractors can stick to what they are really good at, and what they went into contracting for, instead of messing around with tax documents and stressing out about complying with complex legislation.