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Why does there appear to be so few direct contracts?

The general consensus among contractors is that Direct Contract opportunities are few and far between, but with Contract Spy recently announcing that it had found and distributed details of its 10,000th direct IT Contract via its portal, perhaps the time is right to question the perceived wisdom. So let’s take a brief look at the factors in play, that may make it appear that there are only limited direct contracts available in the market.

First we need to consider the differences between how a client and how an agency might work to fill a contract role. An agency that is rewarded with a blue-chip contract role will probably find itself in competition with 4 or 5 other agencies, who are also on the client’s Preferred Supplier List. Contract opportunities are lucrative for agencies, and the cost of advertising them is relatively cheap, especially for the larger agencies with massive job board buying power. Competition to fill the role, plus the supply of cheap advertising will mean that multiple adverts will appear, often creating the general impression that there are many more opportunities available than there actually are. Its not unusual to see the same role being advertised by multiple agencies across multiple job boards and social media streams. Contract Spy has recorded an example where the same agency job was being advertised across 5 different job boards with 6 different agencies and a total of 14 ads live for the same role. Contrast this to the situation with a company recruiting directly in the market, adverts are relatively expensive for them, particularly if they are an SME with relatively few job openings. They are much more likely to publish the role on their own website, tweet it to their company followers, and advertise the role for a quite limited duration on their one job board of choice. Even when combined, these activities only give the direct role very limited exposure to the whole contractor market-place.

We also have to remember that recruitment agencies work pro-actively with their contractors, and when they are notified of a contract opportunity by their clients, they will search their networks and their databases for anyone with the correct skillset, and get in touch with them for a status and availability update. As a contractor, you will doubtless receive many phone calls, texts and emails alerting you to (hopefully appropriate!) contract opportunities with agency clients. At this stage of the game, there is no suggestion that the agency is “head-hunting” you for a particular client, even if you are well known to the agency, there are simply offering to talk about a role that is a possible fit for you. Contrast this with the position that a company recruiter would be in. Companies have to be much more circumspect in contacting potential contractors direct, and there are many reasons for this. First, it is simply a poor investment of a recruiter’s time to form relationships with say, DevOps contractors, if this is their first (and possibly only) DevOps contract opportunity they are likely to have. Secondly, they have to avoid the contractor forming the impression that they have somehow been “head-hunted” for the role. It might be quite difficult for a client to turn down a contractor as unsuitable, if they have approached them directly in the first place, without them losing face and possibly also their reputation. Approaching someone direct for a role can also appear to hand them the initiative in rate negotiations. All things considered, It is much easier for an agency to “spread the word” about a contract opening (how many times have you been asked if you know of a colleague who may be suitable for a role?), than it is for a direct client to make the contracting world aware of their opportunity.

So, these are two main reasons why it might appear that there are fewer direct contract opportunities “out there” than is actually the case.  The problem for contractors has always been finding these lucrative direct contract opportunities in an efficient manner….the problem Contract Spy was designed to overcome. Now that we are moving into our third year of operation, we hope that Contract Spy is helping those companies that recruit contractors directly to re-address the balance, and to popularise direct contracting among IT professionals by finding, identifying and distributing direct IT Contract opportunities.

Follow us on twitter @ContractSpy and subscribe for access to recent and future opportunities at www.contractspy.co.uk

By Contract Spy

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