Jury's out on GST's impact on contract rates, demand

IT recruiters voiced mixed opinions last week on the GST's likely impact on demand for contractors and contracting rates Perry Siacris, IT consultant for Drake, speculates contractor rates will drop between $5 to $10 post-GST, as supply will outweigh demand.

Siacris said that in recent months the agency had been dealing with fewer contract positions and more permanent placements. Permanent placements are up 30 per cent on this time last year and the amount of IT related contracts available in general had fallen. Average contractor rates for network and infrastructure work were about $45, and around $40 to $60 in the development and e-commerce areas. Rates would fall for this sector except in the e-commerce area where rates might increase, he said.

"Customer relationship management is also growing, but that is still in its infancy. The area for sure to go into is Internet development. This is definitely the sector to work in if you want to get ahead."

Dominique Anguame from the Association of Professional Engineers, Scientists and Managers (APESMA) disagrees. He said he would be "surprised if rates fell" and that demand for contractors is steady.

"Demand is quite buoyant; recently we have had Y2K and GST, but there are still new trends and e-commerce coming in. Businesses are tackling one thing at a time," Anguame said.

Richard Talbot, IT account manager for Candle IT&T Recruitment, agrees that the contracting marketplace is quite stable at the moment. However, he believes the implementation of the GST should have no effect on contractor rates and the general demand for contractors.

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