'IT contractors see pay rates cut at Barclays'

Friday 21 March 2014

IT contractors will receive a lower rate of pay at Barclays in the future, it has been revealed.

The Bank confirmed to ContractorUK that it has downgraded the pay of freelancers in both its US and UK divisions.

Rates have been slashed by ten per cent, making it the third 'take it or leave it' cut in as many years, the news provider reported.

Barclays has told contingent workers that they either need to reflect the reduction by April 7th or forfeit their contracts, blaming the need to cut costs.

A spokeswoman told ContractorUK: "While Barclays remains committed to paying competitively, we have reviewed our contractor rates as part of our ongoing cost management programme."

This comes at a time when skilled IT professionals are in high demand and pay rates are an important way for businesses to secure the talent they need.

Job creation in the tech sector is also strong, with the KPMG/Markit Tech Monitor UK report showing it maintained a solid rate through to the end of 2013.

This is the continuation of a cyclical upswing that began in spring, but sustained job creation has been noticeable since late 2009.

In the last month of the year, employment stood at 53.9 on the index - the lowest reading since August but a clear extension of the current period of job creation. Indeed, 43.9 per cent of UK tech companies will grow their IT headcount over the next year.

Investment spending is also expected to increase, with 27 per cent forecasting a rise in capex, compared to 13 per cent who expected a decline.

Tudor Aw, head of technology at KPMG, said: "These figures prove once more that the UK tech sector is going from strength to strength. The last quarter of 2013 saw the sector’s best growth performance in almost a decade, with a sharp increase in business activity, a rise in new orders and an increase in profitability despite higher costs.

"More importantly the sector showed again solid rates of job creation, well above the rates in other sectors of the economy. UK tech companies are also more confident about the business outlook than firms in other industry sectors."

Tim Moore, senior economist at Markit, is confident that the tech sector be will able to capitalise on the rise in corporate spending. Indeed, the industry has proven to be an important growth centre for the UK over the last five years.

The UK tech sector is also able to compete against the US tech industry, with British businesses closely matching performance of the Nasdaq.

With the spotlight turning on the tech sector over the coming years, companies looking to secure the talent they need to grow will need to be able to compete with other firms as employers. This goes for attracting both permanent and temporary staff.

In the current environment, businesses that are unable to offer attractive pay packages need to be able to give other non-cash incentives if they want to be able to keep their top talent.

By Victoria McDonnell

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