At this moment in time the UK IT Industry is facing difficult times due to a combination of events that have not yet unfolded and made their conseguences clear.
I am talking about Brexit and IR35 Applied to Private Sector.
As we are heading into new year, organisations need to prepare and plan ahead. This means securing resources for their projects and allocate the right budget.
IR35
To do that effectively they need to be able to combine their permanent staff with their freelancers. But how are they going to do it if they still do not know whether they will be able to hire and keep the best talent due to the big uncertainty caused by the IR35 reform looming ahead?
A few banks and other large financial instituions already took a stance and said they will apply a blanket approach to all their flexible workforce, forcing them to be inside IR35, meaning they will be taxed as permanent staff without benefitting from the perks of being a permanent member of staff (pension, sick leave, holidays, insurances, bonuses etc).
What do you think will happen? will the best talent and most experienced professionals stay or will they look for another contract deemed outside IR35 elsewhere, even outside the UK?
That’s a huge risk for hiring managers: for the reference just 2 years ago over 80% of public sector projects were halted or delayed due to a shortage of IT contractors.
Brexit
On top of that we have the monster known as Brexit which will disrupt the UK economy and introduce a huge degree of change in the way businesses are run, their processes, regulations and compliancy… which are all run by IT systems.
That will mean a massive amount of work and an increased demand of IT and Digital skills to deliver such projects and keep the country moving -> high demand of flexible workforce!
But where are they going to find such resources after they will have implemented a tax reform that killed the freelancer market?
Are private and public organisations ready to hire hundreds of thousands of permanent employees? or they prefer pay premium rates to IT service providing or consulting firms?
I have a feeling this is not going to look good and many projects and companies are going to be affected by a huge lack of skills and compentences required to move forward.
“The future is uncertain but the end is always near.”― Jim Morrison.