An Assessment of UK IT Recruitment Market

An Assessment of UK IT Recruitment Market

This Key Market Assessment examines the UK IT recruitment market. The market has experienced both peaks and troughs during the 2000s between 2001 and 2003 it went through a period of turbulence; in 2004 it recovered; and between 2005 and 2007 steady ongoing growth was recorded. The recession then took its toll on the IT industry and, in 2008 and 2009, it was subjected to extremely difficult trading conditions. The IT recruitment market had a value of 4.07 billion in 2009 a 14.1% decline compared with 2008.

The extent of the recession's impact on demand for IT workers is evident in the declining number of job advertisements for the industry. Between 2007 and 2009, job advertisements for permanent and contract IT workers, including those required by the financial sector the largest market for IT staff fell sharply, and advertisements for software developers and analysts two of the main skill areas for IT recruitment were also significantly lower.

To reduce costs, many companies have become engaged in offshoring a process that involves the relocation by a company of a business process from one country to another. The UK IT sector is concerned that, should this trend become even more widespread, it could lead to the UK no longer having the skills or the infrastructure in place to support technology businesses or large-scale technology departments.

IT recruitment companies continue to be affected by a wide array of legislation. Current legislative concerns include the Agency Workers Directive (AWD), which is due to be introduced into the UK by December 2011, and Intra-Company Transfers (ICTs) which allow companies to transfer non-EU workers to fill jobs in the UK without having to recruit from the UK labour market first.

Historically, the correlation between UK economic growth and recruitment industry turnover is strong, with rising gross domestic product (GDP) being followed (with a lag of around one quarter) by substantial gains in recruitment. Our forecasts show that, in line with the expected improvement in the UK economy, the IT market will return to growth in 2010. Thereafter, higher levels of annual growth are currently anticipated, although much will depend on the economic climate and the extent to which this stimulates demand for IT recruitment. Key Note forecasts that the market will grow by 5% to 4.27 billion in 2010, and will increase by an overall 43.7% between 2010 and 2014 to reach a value of 6.14bn by the end of the forecast period.

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