Skilled contractors in Ireland's Information Technology industry are, for the first time, being offered rates similar to those in mainland Europe. The contract market has grown as IT companies have found it progressively more difficult to recruit experienced staff over the last few years.
This coupled with the nature of project work which sees peaks and troughs of business, makes it attractive for businesses to offer high hourly or daily rates to experienced contractors, who are expected to need minimal training and who can be let go when the project finishes.
Several weeks ago, British-based agencies started offering rates of £45 to £50 sterling per hour for software engineers to work 12month contracts for a company in Shannon. Such rates have been common for certain skills in northern European countries, such as Belgium and the Netherlands, and are evidence that the demand for skilled contractors in Ireland is now rising.
Another advantage to hiring contractors is that there are several agencies to provide a pool of qualified, vetted staff, easing the recruitment work of personnel or human resources departments. Such agencies typically charge the company a percentage of a contractor's pay, or viewed another way, are paid a set rate by the company and pass on a proportion of this to the contractor.
Agencies are paid anything from 15 per cent to 30 per cent commissions on the contractors' rates.
One UK-based Internet Web site, called Jobserve (http://www.jobserve.co.uk/), acts as a central point of access to more than 1,000 agencies. When checked last week it contained more than 14,000 jobs, with new ones arriving at a rate of nearly 3,000 per day.
The site claims to contain more than 50,000 contract and permanent jobs a month. Of the 124 Irish posts Jobserve listed in that spot check, daily contract rates varied from £220 sterling for programmers, to £750 sterling for a project manager. Most positions, however, did not quote rates.
Windsor-based EPL specialises in contract recruitment for the communications and networking industries in Europe and Australasia. Ms Lynn Douet, resourcing manager, cites the following average hourly contractors' rates around Europe: Germany 95130 deutschmarks (£39£54); Belgium, 2,300-2,700 francs (£44£52); Spain, 9,000-10,000 pesetas (£42£47); and Norway, 550-650 kroner (£53£62). She says the rates reflect the cost of living in a country, hence the high Norwegian rate, adding: "UK rates are increasing . . . £40 sterling per hour is now available."
Ms Douet says the exact rate depends on experience, and that test and integration, commissioning, software engineering and systems engineering are the skills most in demand.
Mr Dave Nelson, of BK Technical Recruitment, quotes rates of £45 to £50 sterling for C++ programmers in Belgium, the Netherlands, France and Germany, while in London similar rates are paid for Visual Basic programmers. Confirming that these rates are now offered in Ireland, he says this is designed to woo C++ contractors back from similarly paid jobs in Europe.
He says he has had contractors currently employed in Dublin inquiring about such positions and turning them down, leading him to guess they are being paid around £40 per hour already.
Ms Chris Daly, of Irish agency IRC, says £40 per hour is the "high end" of what is available in Ireland. She says there are many earning £1,200 per week, or even £1,500 per week with C++ experience. Ms Daly says multinationals are the most common contract employers in the State. There are "three to four big contract users in Galway" she said and the semistate companies and banks in Dublin also take on contractors. When asked if the high rates paid to contractors were squeezing smaller, indigenous companies out of the recruitment market, she says the Irish software companies are "getting a slice of the action" by subcontracting people out.
Contractors are not paid for holidays or sick days, and although some agencies do provide health insurance, the contractors usually sort out their own tax, social security and pensions.
Contractors traditionally registered their own companies through which they were paid and taxed, but some EU countries have tightened tax laws in recent years, making this less attractive. Contractors now increasingly turn to so-called management companies, who take care of their finances. Mr Clements says these companies are usually "based in Switzerland or other tax havens", and typically charge a 7 per cent to 10 per cent fee.
However, he says, most Britishbased contractors still register their own limited companies, and Ms Daly says most contractors in Ireland are self-employed, trading as sole traders or companies, and thus responsible for sorting out their own VAT and income tax.
Eoin Licken is at eoinl@iol.ie
