‘Flat’ IT contractor demand in March linked to chancellor Hunt hardly helping UK hiring

A lax response by chancellor Jeremy Hunt to issues affecting the UK’s labour and contractor job markets came home to roost in March.

Reflecting on opportunities for IT contractors last month turning “flat”, KMPG said it confirmed Spring Budget 2023 to be a “missed opportunity”.

Yesterday publishing a report with the professional services firm, in which IT contractor demand is scored much as it was in February, the REC said Mr Hunt’s measures “fell short.”

'Cost-cutting'

The Recruitment & Employment Confederation’s Report on Jobs says some engagers tried “cost-cutting” in March, with “redundancies” for staff and “projects ending” for contractors.

Demand for IT contractors is specified in the report at 50.7, compared to 50.6 in February, where any score over 50.0 indicates monthly growth.

Another agency staffing body, APSCo, is, yet to publish its members’ data for March, but it has already come to the same conclusion about the government’s helpfulness.

“The chancellor’s Budget…demonstrated a clear focus on boosting the country’s access to skills…[but] significant elements were missing”, regrets APSCo’s CEO Ann Swain.

'Inactivity gap'

Indeed.com, which does have figures for March, says that while some of the chancellor’s budgetary measures were relevant to staffing, they will “take time to have effect.”

And even when they do apply, Mr Hunt’s measures are “projected to only close part of the… inactivity gap,” observes Indeed economist Jack Kennedy.

More positively for IT contractors, Kennedy said the categories of work to have experienced the biggest increase in “relative interest” include software development.

'Sharp slowdown in tech hiring'

But the website’s March update puts that interest down to the “remote-friendly nature” of software development.

In fact, searches for remote roles across Indeed are up tenfold and that follows a “sharp slowdown in tech hiring during recent months,” Kennedy wrote.

Mirroring the smaller appetite for IT expertise, a list of “skills in short supply” in Report on Jobs shows only six technology skills were sought-after in March on a contract basis.

Only two -- Data and Python – were unique to IT contractors, as the four others (Development, Software, Technology and IT) were scarce in the permanent market too.

The full-time tech market was also short of Cyber Security, Data Engineering, Data Science, Digital and Software Engineering.

'Shortages'

“The scale of the challenge we face in tackling shortages and addressing economic inactivity [is significant],” says the REC’s Mr Carberry.

As to where candidates stand, he offered: “After six months of slowing activity from last summer’s peak, the market is now better described as flat than declining. This is the mark of an economy performing better than was expected at the end of last year, and means it is still a good time to be looking for work”.

For organisations, Mr Carberry said the “big news” in March was candidate availability increasing for the first time in more than two years, indicating that, “while the market is still tight, it should be getting gradually easier for firms to hire over the next few months.”

Nonetheless, insistent the chancellor could have spared engagers from having to wait, the confederation’s boss posted to LinkedIn: “The government needs to go further on a workforce strategy…addressing skills properly, not skipping it as they did at the Budget.”