Tech Market Outlook
We all know and appreciate just how unprecedented this situation is, no-one KNOWS what the next few days holds, let alone the next few months and years. I’ve been at the coalface of technology recruitment for 18 years, opened a new office at the start of 2008, closed it in 2009, and lived through the financial crisis in tech recruitment. I don’t know everything but here’s my thoughts.
Short-Term
Quite rightly the immediate concerns for CIO and technology leaders is how to keep their business functioning, business continuity meetings have never been so popular. How do we get the workforce working safely and with minimal disruption. Easy for a small tech software house, difficult for a global manufacturer.
The short-term is likely to see all non-essential roles on hold. Business and tech leaders want to understand timings and impact before adding to their payroll costs. Expect things to go pretty quiet for permanent hires in the immediate. You’ll see the “we’re as busy as ever posts” for the next few days, because there are some legacy roles or essential roles coming in.
With the news on IR35 coming yesterday, once a business has implemented their continuity plans and the new way of working becomes the norm, the gaps will still exist and an interim is likely to be the solution. In a few weeks-time, I expect the contract market to get busier and quite active. This was the pattern we saw in 2008/9, I don’t see any reason why it wouldn’t be the case now.
The market is likely to be flooded with contractors, many have been looking for new contracts for some time, I expect rates to drop a little and price to become a more significant factor when hiring contractors.
Medium Term 3-12 months
The true impact of this crisis will start to become clearer over this period and we’ll know just how deep in the doo-doo we are. I don’t think there are many forecasters who say we won’t have felt an impact. LinkedIn yesterday was full of comments on redundancies and I genuinely feel for those individuals and business owners who have had to make those decisions, I can assure you they wouldn’t have been taken lightly.
Essential hires will hopefully go ahead on a permanent basis and businesses will be starting to kick off the transformation programmes that have been on ice for a few months. This is of course dependent on 3 months being a realistic time-frame for us all to get back to some kind of normality, it may take longer.
The interim market will slow towards the end of this period, based on the resurgence of IR35, remember it was a delay not a cancellation, so it’s likely the balance will start to readjust to a pretty good split of perm and contract hires.
There will of course be industries that have little impact from this pandemic and there may be some sectors which continue to carry on pretty much as normal. Not many but some.
So; in summary, perm hires will start to bounce a little and we will see a slowing of contract hires, but still above the rate of permanent hires.
Longer Term
The tech market recovers quite quickly compared to other markets, there are efficiencies and cost savings to be made with improvement in technology and business processes around technology. It’s no longer the case that the entire IT department is made redundant at the first glimpse of a downturn. Businesses look to tech to help them bounce back and there are more and more tech led companies that will lead the way as the market normalises.
I know there’s a lot of talk of positivity and keeping spirits up and I am a huge believer in this, you won’t find a more positive person going! In the grand scheme of things, if things pan out as above we’ll be ok, however I hate to say that losses from the recruitment sector and some in technology in the worst effected sectors are almost inevitable, unless some genius hits on a vaccine for this awful thing and quickly.
In the meantime, keep safe, look after your loved ones and your neighbours, help each other, stay positive and talk to people, talk to people online, talk to people over the phone or a video call but keep the communication going.