Contractors excluded from permanent jobs

Clients are nervous of employing contractors in permanent positions because of fears that they will return to contracting once the market picks up

Recruitment agencies are being instructed to avoid contractors looking for permanent work because of fears that they will return to contracting at the first opportunity, according to reports by, a Web site for contractors. An advertisement placed by recruitment agency Progressive on jobs board Jobserve, requested: "A well-rounded Database Administrator for a very large, multinational, SAP user." It concluded: "Please note, this client does not want to see any ex-contract persons." Progressive consultant Colin Molyneux, who wrote the advert, has seen contractors he has placed in permanent positions leave after three months, placing both his agency and contractors in general in a bad light. He says this has caused clients to avoid employing contractors. A consequence of the unease some clients have of employing contractors is the introduction of clauses in contracts that insist ex-contractors will be liable for training costs footed by the client if they decide to leave within a certain time period after they have been employed. Jonathan Long, operations regional manager for Elan Computing, says that the trend for clients to steer clear of employing contractors for permanent positions is nothing new. "In the last few months it has become much more prevalent. I've seen clients who have had difficulties with contractors, not just recently but over the years, where contractors have for whatever the reason decided to take on a permanent role." Shortly afterwards, said Long, the contractors left to go after other contracts. The permanent role was just to suit their needs on a short-term basis, he added. "I've also seen some contractors that have an excellent contract background decided that they want to go permanent. A contractor can have a breadth and range of skills that permanent staff will not have. It is coming to general awareness now because half the contract population is sat at home, not working." Long said that contractors who have been working on £40-£50 an hour are now looking for permanent positions at £25k to £30k a year because they are desperate to work. He estimates that 50 percent of contractors are currently out of work. "It is not so much the financial thing but that if they are out of the marketplace for a period of time, their skills become less effective." The number of contractors who have left self-employment to become permanent employees has doubled since June 2000, and the number out of work has more than tripled. Those IT contractors still working as contractors continue to be squeezed by employers as their rates are cut.

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