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In or Out? How Would the Brexit Affect IT Contractors in the UK?

The upcoming EU referendum has many far-reaching implications for IT Contractors working in the UK and Europe. Some questions are fundamentally about how we see our roles in society in the age of communication, others are simply about how much money we will have in our pocket.

The implications of a Brexit are increasingly difficult to understand, particularly because it seems that both camps’ rhetoric seems to offer the opposite interpretation to the other based on exactly the same evidence. For example:

“It was asserted that ‘leaving the EU would mean deep funding cuts for the NHS.’ Not long after, another group argued that leaving could free up funds that could be injected into the health service.” – BBC News

A recent YouGov poll of over 1,000s SMEs revealed that:

  • Only 14% believe that the EU makes it easier for their business to employ people while 31% believe the EU makes it harder for them to employ people.
  • More businesses (32%) believe that the EU hinders businesses like theirs than helps businesses like theirs (25%).

Alternatively, businesses, such as BT, O2, Vodafone, BAE Systems, Shell and HSBC have publicly announced their support to stay in the EU.

Other sources have claimed a Brexit would be a short term boost for Technology companies but hinder their long term expansion.

A forewarning – I’m offering no answers here, only more questions.

Is the Build-Up Alone Affecting Contract Jobs?

So let’s narrow the focus in the hope that specificity leads to clarity. What are the pros and cons of leaving the EU for IT Contractors?

Contractors are always more exposed to market forces than their permanent counterparts. A contractor can be hired and fired often with little more than a week’s notice based on the whim of their employer. The uncertainty over the impact of the Brexit may have delayed or changed the course of major IT projects that may have been in the pipeline.

There may have already been projects delayed which could have provided dozens of contract jobs. If we do leave, what decisions will be made differently by businesses? Will they be beneficial or detrimental to IT Contractors?

More Freedom to Choose Trade Markets?

We need to decide whether we feel our changing relationship with Europe would make the UK a more or less attractive option for multinational business.

By leaving the EU we will potentially open ourselves up to trade with other markets such as the US and India. In terms of IT these are two of the biggest markets in the world.

Would being less Euro-focussed help us to develop better trade deals with these markets?

Pricing Ourselves Out of the Market?

Another point would be that if we make it harder for workers from outside the UK to work here then there will be less competition for contract work, forcing up day rates for IT Contractors (great, right?).

But could it then mean that the UK will become less attractive to outside investments from multinationals, who know they will have to pay a premium for experienced IT Contractors? Perhaps it would make more financial sense to run their projects from Ireland, or France, or Spain?

HSBC has already claimed that they will move around 1,000 jobs from London to Paris if Britain leaves the EU, and you only have to look at the current steel industry crisis in the UK to see the devastating effect that a considerably cheaper overseas competitor can have on our economy.

There are compelling arguments for and against the proposition to leave the EU but one thing is certain - voting to leave a politico-economic union we have been a part of since 1973 will have a huge impact on our society and economy.

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