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How is Brexit affecting the IT sector two months on?

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How is Brexit affecting the IT sector two months on?

Brexit: Is the tech sector melting down or knuckling down?

In the run-up to the referendum on whether to stay – or leave – the European Union, the consensus was that the UK would comfortably vote to stay in. Or, at least, comfortably enough.

So when the UK voted out in the referendum vote on 23 June, it came as something of a surprise – especially for the tech sector. Before the vote, it is fair to say that the UK IT industry as a whole were generally in favour of staying.

So, two months on, what impact has the vote for Brexit had on the IT sector? Has an economic wobble and the prospect of restricted freedom of movement begun changing budgets and personnel strategy already?

Bouncing back

James Poyser, founder of accounting software firm inniAccounts, said prospects for his business and the wider IT sector did not look encouraging directly after the vote but that since then the outlook has got brighter.

“As our business provides services to contractors we monitor things very closely. Contractors are a very big barometer for impending recession,” he said.

“Within a week [of the vote], we had seen an 11 per cent drop in the number of people becoming self-employed contractors, which indicated people were sticking with the job they had rather than taking advantage of the lifestyle perks contracting affords them. The trajectory didn’t relent and was still moving downwards in mid July.”

It was a decline the like of which inniAccounts hadn’t seen since 2008 when the financial crisis hit.

“However, this month we saw it bounce right back to pre-2008 levels,” Poyser said.

“This means that the fear that big business would stop or put on hold IT projects isn’t coming to fruition and contractors are providing a flexible way to complete strategic change, and also use their expertise to start to plan for the likely outcomes of the [Brexit] negotiations.”

Poyser said he’s now “feeling positive” about his own business. While senior hiring has been put on hold for now, he said the firm is continuing to hire ‘front-line staff’.

James Smith, managing director at Networkers Technology Recruitment, had a similar story to tell, saying his firm saw a “momentary pause in recruitment” among some of its clients, but a fast return to business as usual for “the niche IT skills they require”.

“Companies that were quiet before Brexit are still quiet now, and those that were on a recruitment drive pre-Brexit are continuing to expand their workforce. What remains to be seen is whether those IT projects in the pipeline will go ahead,” he said.

“From a candidate point of view, there has been no change in the amount of work available but there have been a minority of permanent candidates who have been hesitant to leave their current posts while they wait to see the impact of Brexit on jobs at the end of the year.”

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